SUPPLY CHAIN MANAGEMENTOF

HONDA MOTORS

SUBMITTED BY: PIYUSH SAXENA

ABHISHEK PRATAP GAGAN SINGH

PRATEEK THAKUR ROHAN

SHRIVASTAVA

HONDA MOTORS

FOUNDER Soichiro Honda with a view personal mobility for every one!!

FOUNDED HONDA MOTORS IN 1948

Company Description

Automotive Manufacturers – Major

1. Automobiles

2. Motorcycles

3. Power Products

4. Financial Services

HMC Sales Allocation Over the Past 9 Months

12%

81%

3% 4%

Motorcycles

Automobiles

Financial Services

Power Products

Honda is the World’s Largest motorcycle manufacturer but is most known for its automotive industry

HONDA IN INDIA

Incorporated in dec,1995 Joint venture : Honda motor co. Ltd.

&

Japan and Siel ltd. Honda city introduced in 1997 Sales & distn. – 105 facilities , 62 cities

Honda Honda’s Operational practices show a

great example of the innovations the Japanese automobile manufacturers perform.

Operational Strategies Careful site selection of their manufacturing plants

Greenfield Manufacturing Plants In- depth supplier relationship

Close and interactive, similar to a partnership Autonomic organizational structure- ultimate aim is

to create self-managing networks Japanese/North American manager mix

Honda Purchasing

Suppliers are involved with development and design of new products

Relationship is much like a partnership

Honda Supply Chain

Honda uses their economies of scale by working with their parts suppliers to order raw materials in large quantities.

Supply Chain Characteristics The key element for Honda is the flow of

information with their suppliers12 steps:

○ Initial contact, preparation/investigation of Honda parts, quotations, initial plant visit, prototype development, testing and evaluation, mass production quotation, preparation for mass production, trial run, Quality Assurance Visit, agreement, purchase order

In-house engineers

Suppliers

Boto tech Hongkong- piston & accessories

B-spex trading Japan- auto parts Ningleo bouldlean- steering Shangai viciklong- fuel pumps Bridgestone Michelin

Honda Supply Chain

Honda Purchasing

Honda Purchasing

Parts Supplier

Parts Supplier

Parts Supplier

Honda Trading

Raw MaterialsMill

Parts Supplier

Parts Supplier

Parts Supplier

Honda Assembly

Plant

Honda Assembly

Plant

Structural Characteristics Also known as executional drivers that

reduce operating costs and increase productivityEconomy of Scale – All purchasing done by

Honda Trading Corp.Technology – Multipurpose machineryCapacity Utilization – Honda operates

facilities in every major market they enter

Q.C.D.D.M

Customer Satisfaction is top priorityAccomplished through suppliers

competitiveness in quality, cost, delivery, development, and management (Q.C.D.D.M.)

QualityMost important factorMust be built into production process

Q.C.D.D.M cont’d

CostSuppliers are given target costsCost reductions through own ideas,

technology, improved productivity, along with joint efforts with Honda in value engineering, and value analysis

DeliverySuppliers must use just-in-time production

system

Q.C.D.D.M cont’d

DevelopmentUniqueness in design and specificationsHelps create identity for Honda

ManagementPositive attitudeMeasured by Q.C.D.D

FeedbackGrade cards for suppliers

Sales and Distribution Network

Honda Siel Cars India has a strong sales and distribution network spread across the country. The network includes 80 facilities in 51 cities. HSCI dealerships are based on the “3S Facility” (Sales, Service, Spares) format, offering complete range of services to its customers.

Competitive Characteristics Strategic and operational variables that

must be factored into the design of a company’s global value chainGlobal value chain

○ Demand chain (marketing, sales, service)○ Supply chain (sourcing, manufacturing,

logistics)○ Product development (R&D, design,

engineering, development, and launch)

Honda Quality and Efficiency

Quality and Continuous Improvement Employee Driven “Kaizen”“Quality Circles”“Domestic Trouble Reports” (DTRs)MRP II and Web-based Ordering for

Supplier Base as a whole Extent of Efficiency in Supply Chain

Honda Trading “Soybean Example”New Honda Ridgeline Composite

Bed/Box

Foreign Automakers Share A Similar Philosophy

Customer Service is keyProvides more predictable demand

scheduleAllows for a stronger relationship with

Suppliers

Comparison With Domestic Automakers More of a collaborative relationship High levels of information sharing

Better information Lower inventory levels The financial health of Suppliers is

extremely importantSharing of Financial prosperity & follies

Questions

?

Thank you