Post on 21-Nov-2014
transcript
Prathibha.SPrerna RaginiPrayag
HRM BatchSpring Summer 09-11IIPM, Bangalore30th August 2010
The Automotive industry is one of the largest industries in the United States
New and used automotive sales and repairs generates over $200 billion dollars of the GDP each year.
New car and light weight truck sales generated $699 billion dollars in revenue in 2003.
Traditionally, domestic manufacturers have dominated the market in the United States.
The top three domestic manufacturers include: General Motors Ford DaimlerChrysler
In recent years, these top domestic manufacturers have concentrated on the market for sport utility vehicles and light trucks.
This narrow concentration has allowed foreign manufacturers, primarily Japanese manufacturers, to steal some of the market share for cars.
In the past few years, General Motors, Ford, and DaimlerChrysler’s market share for cars has been cut in half.
While domestic manufacturers still dominate their foreign competitors, the Japanese market share of cars is growing.
Consumers are choosing Japanese cars over domestic because of their competitive price, and high quality reputations.
These advantages are results of a very organized and innovative way of doing business.
Honda’s Operational practices show a great example of the innovations the Japanese automobile manufacturers perform.
Careful site selection of their US manufacturing plants
Greenfield Manufacturing Plants In- depth supplier relationship
Close and interactive, similar to a partnership Uses the concept keiretsu
Autonomic organizational structure Japanese/North American manager mix New entrants focus on more established
products and processes
Suppliers are involved with development and design of new products
Eg. - Accord Relationship is much like a partnership Requires an in-depth supplier selection
process
Conduct joint improvement activities Share information intensively, but
selectively Develop suppliers' technical capabilities Supervise suppliers Turn supplier rivalry into opportunity Understand how suppliers work
Honda uses their economies of scale by working with their parts suppliers to order raw materials in large quantities.
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
Also known as executional drivers that reduce operating costs and increase productivity Economy of Scale – All purchasing done by
Honda Trading America Corp. Technology – Multipurpose machinery Capacity Utilization – Honda operates facilities
in every major market they enter
IT advancements 3rdwave distribution software by Blinco
Systems Assures parts quality, controls availability,
guarantees delivery, provides consistent materials pricing
External factors Increasing oil prices effect transportation
costs for all markets
Strategic and operational variables that must be factored into the design of a company’s global value chain Global value chain
Demand chain (marketing, sales, service) Supply chain (sourcing, manufacturing, logistics) Product development (R&D, design, engineering,
development, and launch)
The key element for Honda is the flow of information with their suppliers 12 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 guest engineers
Strategic sourcing – “maximizing the value added through your external suppliers” Will chose highest supplier in overall service
(not just lowest price) “Target pricing”
Price table for parts If price cannot be met, Honda will work with
supplier to get costs down
Customer Satisfaction is top priority Accomplished through suppliers
competitiveness in quality, cost, delivery, development, and management (Q.C.D.D.M.)
Quality Most important factor Must be built into production process
Cost Suppliers are given target costs Cost reductions through own ideas,
technology, improved productivity, along with joint efforts with Honda in value engineering, and value analysis
Delivery Suppliers must use just-in-time production
system
Development Uniqueness in design and specifications Helps create identity for Honda
Management Positive attitude Measured by Q.C.D.D
Established in 1985, started its operation in 1986 along with pre delivery inspection facility.
4000 employees, engineers, manufactures.
1.3 billion pounds – for 270 acres site. 1 car in 80 seconds 250,000 cars per year – CRV, Civic
Engine plant. - Every hour 1600 kilos of aluminum used to produce 60 engine blocks
Casting Machining
- engine unique number Engine assembly area Transferred to car plant
Car body- Flat sheets
Welding department Pre treatment process Paint Bumpers are produced Assembly frame department Material logistics
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Thank You……. !