Honda Overview Purchasing in NA Supplier Developmentto support all of Honda’s North American...

Honda North America PurchasingHonda North America Purchasing

Honda Overview

Purchasing in NA

Stability Improvements

Supplier Development

Production Characteristics

Lean Partnership

Working together to achieve Global Competitiveness, Locally


Honda Overview

Purchasing in NA




Lean Partnership


LEGEND

Production (parts included)Research and DevelopmentSalesRegional Headquarters

Global OperationsGlobal Operations

Over 150 Facilities Worldwide

North AmericaRegional Operations

Asia/OceaniaOperations

Japan RegionalSales OperationsEurope/

Middle East/Africa Operations

South AmericaRegional Operations

Six Operating Regions

Global OperationsGlobal Operations

China RegionalOperations

North American Production North American Production


Honda Overview

Purchasing in NA




Lean Partnership


Develop supplier capabilities to meet QCDD (Quality, Cost, Delivery & Development) requirements


Understand future direction of the industry and develop strategies and systems to enable Honda Motors and our suppliers to adapt to

changes and gain competitive advantage.

Develop and manage material flow to meet plant requirements with optimum inventory levels at competitive logistics cost.

Manage purchased parts cost to achieve globally competitive costs and support Honda Motors’ competitiveness.

Build a world class purchasing organization through development of associates and business practices

We will develop and manage a competitive and stable supply base to support all of Honda’s North American Manufacturing facilities

with world class Quality, Cost, Delivery, and Development.

North America Purchasing VisionNorth America Purchasing Vision

• 600+ OEM Suppliers supplying our N.A. Mfg facilities ($16 Bil)

• 5,000 MRO Suppliers for N.A. OEM

• 600+ OEM Suppliers supplying our N.A. Mfg facilities ($16 Bil)

• 5,000 MRO Suppliers for N.A. OEM

•United States: Suppliers located in 34 States

•Canada: Suppliers located in 2 Provinces

•United States: Suppliers located in 34 States

•Canada: Suppliers located in 2 Provinces

Number of SuppliersNumber of Suppliers

Locations of SuppliersLocations of Suppliers

Honda Suppliers in North AmericaHonda Suppliers in North America

Honda OEM Suppliers


Honda Overview

Purchasing in NA




Lean Partnership


Supplier Support Model Supplier Support Model -- StabilityStability

Best Suppliers Self Motivated

Stable SuppliersStable Suppliers

Lean Network

Stability Concerns

ProductionCharacteristics

Activity

StabilityProjects

Benchmark Suppliers

Training

Teaching

Problem Solving

Hands On Doing

Training

Teaching

Facilitating

Strategic Partnering

Training

Teaching

Networking/Showcase

Benchmarking

Honda InvolvementSelf-Directing‘Hands-on’ Assistance Facilitation

Stability Stability ProjectsProjects

Production Production CharacteristicsCharacteristics

Lean Lean NetworkNetwork

REACTIVE

PROACTIVE

NEXTLEVEL

High Level Purpose:

Move entire supply base toward self-directed improvement capability.

Methodology:

Level and type of support varies according to supplier capability. Not a one size fits all approach.

OE Survey

1. Systems2. Process

Assessment

Stability

Suppliers

Identify the gaps, set baseline &

targets

Analysis

Situation Analysis (SA)

Specified Action PlanSystem

Process

Mgmt

OEE

Scrap

Plan (P)

Monthly Progress

Identify supplier with Q&D concerns

Supplier Selection

Problem Solving Strategy Training Plan

Implementation Plan

Do (D)

Mid Project Check

Final Report

Check (C) Act (A)

Implement Plan Management Check Adjust plan if necessary Standardize improvements

Implement on 2nd line

Stability Improvement ProcessStability Improvement Process

Stability Improvement ExampleStability Improvement ExampleOEE Trend

0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

44%

59%62%

48% 48%

72%

0%

32%

57%

40%44%

49%

55%

0%

31%

59%55% 55%

35%

0% 0%

66%

20%

69%

43%

55%

20%

56%52%

70%

0%

63%

54%

50%47%

57%

38%

0%

62%63%

59%

32%33%

65%

45%

67%

73%

47%

55%

61%

0% 0%

63%

25%

54%

45%

35%

52%

41%

37%

64%

0%

70%

0%

10%

20%

30%

40%

50%

60%

70%

80%

8/1,M

on8/2

,Tue

8/3,W

ed8/4

,Thu

8/5,F

ri8/6

,Sat

8/7,S

un8/8

,Mon

8/9,T

ue8/1

0,W

ed8/1

1,Th

u8/1

2,Fr

i8/1

3,Sa

t8/1

4,Su

n8/1

5,Mon

8/16,

Tue

8/17,

Wed

8/18,

Thu

8/19,

Fri

8/20,

Sat8/2

1,Sun

8/22,

Mon8/2

3,Tu

e8/2

4,W

ed8/2

5,Th

u8/2

6,Fr

i8/2

7,Sa

t8/2

8,Su

n8/2

9,Mon

8/30,

Tue

8/31,

Wed

3rd 1st 2nd Target

SATSAT SATSATSAT/SUNSAT/SUN SAT/SUNSAT/SUN

Supplier was working working most weekends to meet Customer Demandwhich negatively impacted workforce stability and the QCD performance

of the Supplier, Honda and most importantly the final Customer

PQI

QI

2'x2'

PQI

QI

2'x2'

Odyssey HU Main Line 2-Shifts

IPKUnit Unit

IPK IPKUnit

IPKUnit

IPKUnit

IPKUnit

IPKUnit

PQI

QI

2'x2'

IPKHub

IPKFCB

IPKFCA

IPKUnit

PQI

QI

2'x2'

PQI

QI

2'x2'

PQI

QI

2'x2'

PQI

QI

2'x2'

PQI

QI

2'x2'

PQI

QI

2'x2'

PQI

QI

2'x2'

Scanner

CQG

CQG

17PQI

QI

2'x2'

3'

3'

CQG

CQG

HRoom

HRoom

PQI

QI

2'x2'

CQGPT

18 Belt Conv

Bar CodePrinter

IPKUnit

Scanner

IPKUnit

Scanner

IPKUnit

Scanner

IPKUnit

Scanner

Bar CodePrinter

Com

puter

ComputerComputer Bar

Code Printer

Bar Code

Printer

Bar

Code

Printer

1-251-24

IPKHub

IPKUnit

PQI

QI

2'x2'CS24x16

2'4"x1'6"

ComputerStand

IPKUnit

Scanner

IPKUnit

Scanner

IPKUnit

Scanner

IPKUnit

Scanner

IPKUnit

Scanner Scanner

JIG

Scanner

JIG

Scanner

JIG

Scanner

JIG

Scanner

JIG

Scanner

JIG

Knob11.5x17x4.5

Knob

wb67x2116'7"x2'11"Work Bench wb67x2116'7"x2'11"Work Bench wb67x2116'7"x2'11"Work Benchwb67x2116'7"x2'11"Work Bench wb67x2116'7"x2'11"Work Benchwb67x2116'7"x2'11"Work Benchwb67x2116'7"x2'11"Work Bench wb67x2116'7"x2'11"Work Bench

3'4.

5"x5

'4"

HR3

45x5

4

Roo

mH

earin

g

Computer

JIG

Scan

ner

Scan

ner

JIG

Computer 3'4.

5"x5

'4"

HR3

45x5

4

Roo

mH

earin

g

3'4.

5"x5

'4"

HR3

45x5

4

Roo

mH

earin

g

Computer

JIG

Scan

ner

Sca

nner

JIG

Computer

PT

3'4.

5"x5

'4"

HR3

45x5

4

Roo

mH

earin

g

Computer

JIG

Sca

nner

CQG

3'4.

5"x5

'4"

HR3

45x5

4

Roo

mH

earin

g

Sca

nner

JIG

Computer

CQG

3'4.

5"x5

'4"

HR3

45x5

4

Roo

mH

earin

g

C63x12

6'3"x1'2"Creform

C63x12

6'3"x1'2"Creform

C63x12

6'3"x1'2"Creform

C63x12

6'3"x1'2"Creform

C63x12

6'3"x1'2"Creform

C63x12

6'3"x1'2"Creform

wb67x211 6'7"x2'11" Work Bench

C63x12

6'3"x1'2"Creform

Creform

C63x32

6'3x3'2"

Creform

C63x32

6'3x3'2"

DTC Creform

C63x32

6'3x3'2"

Creform

C63x32

6'3x3'2"

DTC

BTC

BTC

BTCDTC

BTC

BTC DTC

DTC

C63x12

6'3"x1'2"Creform


HubIPK

UnitIPK

Creform

C63x32

6'3x3'2"

Creform

C63x32

6'3x3'2"

Creform

C63x32

6'3x3'2"

IPKUnit

IPKHub


C63x12

6'3"x1'2"Creform

C63x12

6'3"x1'2"Creform


HubIPK

UnitIPK

LINE 21

C101x3910'1"x3'9"Creform

CCS51x195'1"x1'9"Stand

Creform Computer

Creform

0 .0%10 .0%20 .0%30 .0%40 .0%50 .0%60 .0%70 .0%80 .0%

Jun- Jul- Aug-Se p-Oct- Nov-D ec-Jan- Feb-M ar-Ap r-May- Q1Q 2MY Q3 Q4YTD0.0%5.0%10.0%15.0%

20.0%25.0%30.0%35.0%

40.0%45.0%50.0%

Jun-Jul- Aug-Sep- Oct-Nov-D ec-Jan-Fe b-Mar-Apr -May-Q1 Q2MY Q3Q4Y

0.0%1.0%2.0%3.0%

4.0%5.0%6.0%

7.0%

OEE Trend

55.3% 53.5% 52.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar-

MY Line #21

1

Detailed line performance analysis showed poor process balance& poor OEE (high downtime, lost time and scrap)

OEE

Downtime Trend

9.0%

32.8%

26.4%

14.3%

18.2%

32.7%

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%

RecordedDT Trend UnrecordedDT

MY Line #21

1

Downtime / Lost Time

Scrap Trend (Pcs in %)

6.2%

3.9%3.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr-

MY Line #21

1

Scrap

Target

Target

Target

Advanced Planning tools allow various Scenarios to

be tested to establish detailed performance

targets

Advanced Planning tools allow various Scenarios to

be tested to establish detailed performance

targets

Goals and ObjectivesGoals and ObjectivesMeasurables Baseline Data Target

• Daily Production 463 daily average 670 daily• Overtime Hours 54.8 monthly 0 (zero)• Process Utilization 128% 93%• OEE 50.8% 70.3%

– Operating Rate 72.7% 84.8%– Performance Rate 73.2% 84.2%– Quality Rate 95.5% 98.5%

• Line Balance 66% 82%

Baseline Targets Actual Gap Closure Who 1 8 15 22 29 5 12 19 26 3 10 17 24 31 7 14 21 28 5 12 19 26 2 9 16 23 30

3 3.1

Improved awareness of

expectations, using Lean Manufacturing

tools to support project.

PPLH 10.6 PPLH 15.9Improve PPLH by 16.6%

2

Improve line 21 OEE from 50.8% to 70.3%.

Eliminating 100% of overtime.

2.3

Improve Quality Rate by better

capture of repair units being

removed and introduced to

production line.

100.0%* Base line data did not

capture product that was removed

from line for repairs. Loss was

captured in Performance

measurements.

95.50%

2.3.1

2.3.3 Modify system to contain failures in L8 and SMT from being sent to final assembly

2.3.5

2.3.6

2.3.4 Develop daily process for formal review of concerns

Coordinate and guide on parallel line activity L8

2.3.2 Modify system to identify location, time and type of failures in final assembly

Enhance current rework tracking to better capture specifics on all concerns

1.1.4

Increase average daily production from 560 daily to 670 daily or 16.4%

1.1.5

Improve Operating Rate through the

elimination of largest recorded downtime issues.

84.80%72.70%

2.2

Improve Performance Rate

through better documentation and

improved awareness of

production targets.

69.90% 86.80%

Establish model line activity on two lines utilizing lean

and BP techniques. ( line 21 Odyssey / line L8)

1.1

1.2

1.1.6

1.2.2

1.2.4

1.2.6

Enhance visual management to provide better

communication, training, and

management of performance.

Posted information

includes basic performance measurables. Data not lend

itself for effective problem solving.

Add OEE graphs and Idea Tracking Charts to

current displays.

1.2.1 Instruct in the utilization of OEE charts and graphs

#REF!

#VALUE!

#VALUE!

1

2.1

Action ItemsObjectivesGoal

Conduct parallel projects using BP outline for activity. Instruct and guide team members to achieve success

No standard process for continuous

improvement.

Develop standard process for activities.

1.1.3

100% elimination of all overtime (daily and weekend) avg. for June/July 54.8hrs

1.1.2 Provide necessary training for team members.

December

1.1.1 Outline process to be followed for improvement projects.

NovemberOctoberSeptember

1.2.5

Develop idea tracking charts for production and project use.

1.2.3 Display of visual management line side.

Enhance current downtime tracking to better capture specifics on all concerns

2.1.1

2.1.2

2.1.3

2.2.1

2.1.4

2.1.6

2.1.5

2.2.4

2.2.5

Improve PPLH by 16.6%2.2.2

2.2.3

20062005January

Improve line balance by 16% (66% to 82%) Reduce work stations from 26 to 21

Decrease process utilization from 128% to 93% or 27.3%

August

3.1.2 Use Decision Analysis process to determine best scenario

3.1.1 Review of Situation Analysis (SA) summary items

3.1.4

3.1.3 Determine action plan and schedule to implement improvements

3.1.6

3.1.5

Brown

Specified Action Plans (SAP) Specified Action Plans (SAP)

Implementation of detailed data collection and analysis systems and input from the associates on the production floor yielded excellent results

OEE Trend

55.3%67.8%

76.9% 77.0% 75.0%

53.5% 52.4%64.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- A

MY Line #21

1

OEE Downtime Trend

9.0%

24.1%15.7% 14.2% 16.7%

32.8%

26.4%

14.3%

12.9%7.8%

6.9% 8.5% 7.2%

25.0%32.7%

18.2%

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%

Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar-

RecordedDT Trend Unrecorde

MY Line #21

1

Downtime Scrap

6.2%

1.1% 1.0% 0.7% 1.1%1.9%

3.3%3.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan

MY Line #21Scrap

Target

TargetTarget

Results, with Associate InputResults, with Associate Input

Final ResultsFinal Results

Input:Honda Labor $68KHonda Travel $75KSupplier Labor $18K

$161K

Output:

Direct O/T -$2,365KIndirect O/T -$592K

-$2,957K

18:1Out/In

Measurables Baseline Goals Final• Daily Production 463 daily avg 670 daily 730• Overtime Hours 54.8 monthly 0 (zero) 0• Process Utilization 128% 93% 84%• OEE 50.8% 70.3% 76.4%

– Operating Rate 72.7% 84.8% 83.3%– Performance Rate 73.2% 84.2% 92.8%– Quality Rate 95.5% 98.5% 98.9%

• Line Balance 66% 82% 84%*.

Supplier Support Model Supplier Support Model –– Production CharacteristicsProduction Characteristics



Lean Network

Stability Concerns

StabilityProjects

Benchmark Suppliers

Training

Teaching

Problem Solving

Hands On Doing

Training

Teaching

Facilitating


Training

Teaching

Networking/Showcase

Benchmarking


REACTIVE

PROACTIVE

NEXTLEVEL


Activity




High Level Purpose:


Methodology:


Production Characteristic ExampleProduction Characteristic Example

• Value Stream Mapping

• 3P: Production Preparation Process

• Summary of Results

Improving Production Characteristics…….

in Mass Production & New Model

•VSM: Shows Production & Information flow from Customer Raw Materials

C/T N/AC/O N/A

2500 sets 2500 sets Assoc. N/AOEE N/A

C/T 2.3 C/T 32C/O 5 min C/O 60 min

1 day Assoc. 1 2500 sets Assoc. 4 1540 setsOEE 85% OEE 88%

C/T 32C/O 0 min

1500 sets Assoc. 3 1800 setsOEE 87%

C/T 1.5 C/T 13.8 C/T 5 C/T 32 C/T 33C/O 30 min C/O 50 min C/O 45 min C/O 0 min C/O 0 min

5 days Assoc. 2 13000 sets Assoc. 2 5000 sets Assoc. 6 6000 sets Assoc. 1 240 sets Assoc. 5OEE 61% OEE 83% OEE 61% OEE 91% OEE 91% 1200

sets

8.9 Days 12.5 Days 6.6 Days 4.3 Days 0.2 Days 0.9 Days

35.8 sec 45.8 sec 5 sec 32 sec 33 sec

33.4 Days151.6 Seconds

Rollform

Pillar Cover Repack

Center Hemming

Twin PressLaser Weld400 Ton Blanking

Bending

Lead TimeProcess Time

Comp LineInner Pierce

CustomerDemand ~ 1380Takt ~ 60 sec

SuppliersProduction

Control

MilarkHonda Trading Penntecq

Berwick

DailyOrder

7-14-26 Wk Forecast 7-14-26 Wk

Forecast

Daily Order

1 / Day HDM

7 / Day MAP

Shipping

Warehouse

1 / Day W/H

Van Sheet

1 / Wk

Honda Trading

Berwick

1 / Day

Penntecq

1 / Day

Berwick

3 / Wk

Milark

Warehouse 3 / Wk

Increase delivery frequency to

1/Day. Setup kanban.

Eliminate deliveries to Warehouse. Milark deliver to Cairns plant.

Milark reduce batch sizes. Pack in smaller

containers.

Setup kanban to supplier. Setup

kanban.

Setup kanban.

Setup kanban.

Setup kanban.

Setup kanban.

Improve Twin Press quality.

Setup kanban to supplier.

Setup kanban.

Setup kanban.

HDM deliveries direct from Cairns

plant.

Value Stream MappingValue Stream Mapping

VSM: Shows Production & Information flow from the Customer to Raw Material- Identifies sources of waste and provides a common language

3P 3P –– Production Preparation ProcessProduction Preparation Process

Applications: Objectives:

The purpose of 3P is to design out waste and simulate the process with a cross functional team to achieve a higher level of safety, quality, productivity and delivery at start-up.

3P Method:Cross-functional InvolvementLower Capital InvestmentProcess InnovationCycle Time SimulationPlanned Parts Presentation

Traditional Method:Low Associate InvolvementExcessive Capital InvestmentCopy of Existing ProcessNo SimulationParts Presentation Afterthought

- New Products- Design Changes- Changes In Demand- Relocation Of Process- Mass Production Improvements

- Use Minimal Resources to Meet Customer Takt Time- Eliminate Waste Prior to Production Start

3P Methodology:- Clear Objectives (MP Eff. WIP, Flr Space)- Cross-functional Team (prod, quality, ms, maint,)- Creativity Before Capital- Quick and Crude vs. Slow and Elegant- Tight Focus On Time (1 week)

Create 7 AlternativesSituation AppraisalTuesday

Full Scale Mock-upEvaluate AlternativesWednesday

DocumentationSimulate / KaizenThursday

3P / Lean Training

PM

Results PresentationFriday

Monday

AM1 Week Schedule:

AFT

ER

3P

3P Proposal

PPLH WIP FL/SP

BE

FOR

EA

FTE

R%

IMP

$AV

ING

S

$300KN/A$450K

47%N/A37.6%

4820N/A45

9100N/A32.7• VA time = 50.9• Total M/P = 22 for two shifts all 4 parts.

• VA time = 66.9.• Total M/P = 16 for two shifts all 4 parts.

0

10

20

30

40

50

60

70

80

Pier

ceC

onve

yor

T/T

Con

veyo

rSe

aler

Con

veyo

r

F/I

Load

0

5

10

15

20

25

30

35

Load

MIG

1

MIG

2U

nloa

d T/

T

Spot

Hem F/

I

s u p p ly

s u p p ly

supp

lysu

pply

INV.

INV. supp

ly

L/R Front Sash Final Weld Cell

s u p p ly

s u p p ly

supp

lysu

pply

INV.

INV.

supp

ly

L/R Rear Sash Final Weld Cell

3P 3P –– Eliminating waste prior to New ModelEliminating waste prior to New ModelNVAVA

NVAVA

One Time Savings = $300KAnnual Savings = $450K1st Yr Savings = $750K

Production Characteristics ResultsProduction Characteristics Results

Baseline 3P Result % Improve Baseline 3P Result % Improve Baseline 3P Result % Improve1 A ATV Frame Weld 24.0 33.7 40.4% 1.6 days 1.6 days 0.0% 4463 3802 14.8%2 B Door Mirror Assembly 5.9 8.2 39.9% 3245 parts 110 parts 97.0% 2191 1080 50.7%3 C Cat Con Weld 6.3 7.9 25.4% 1600 parts 870 parts 45.6% 3500 3370 3.7%4 D Rail Assembly 9.1 13.7 49.9% No Change 609 187 69.0%5 E Door Mirror Assembly 14.4 20.8 44.0% 2228 1568 30.0%6 F Seat Sub-Assembly No Change 240 parts 72 parts 70.0% 605 328 46.0%7 G Radio Assembly 5.7 6.9 21.1% 169 101 40.2%8 H Cable Assembly 8.6 9.4 9.3% 35 parts 12 parts 66.0% 1116 1116 0.0%9 I Differential Case Assembly 3.5 7.3 108.3% No Change 1409 1057 25.0%10 J Door Liner Assembly 8.9 10.7 20.2% No Change 1833 1718 6.3%11 K Door Liner Assembly 5.5 9.0 63.6% No Change 2574 2310 10.3%12 L Module Assembly 5.3 6.6 24.5% 874 820 6.0% 50 5 90.0%13 M Pillar Garnish Assembly 11.8 18.4 55.9% 744 866 -16.4%14 N RES Assembly 1.7 2.1 23.5% 56 pcs 18 pcs 68.0% 1160 638 45.0%15 O Blower Assembly 17.7 22.4 26.6% 1800 pcs 1800 pcs 0.0% 656 399 39.2%16 P Brake Pedal Weld 39.9 52.7 32.1% 56 parts 6 parts 91.0% 2343 1053 62.0%17 Q Blower Assembly 14.8 18.1 22.0% 18.0 1.0 94.4% 543 216 60.2%18 R Exhaust Pipe Weld 20.0 46.0 130.0% 38 pcs 1 pc 97.0% 431 310 28.0%19 S ELD Assembly 100.9 134.6 33.4% 1339 pcs 259 pcs 80.6% 1207 978 19.0%20 T Cable Assembly 31.0 47.0 51.6% No Change 848 324 61.8%21 U Rear Tray Injection Molding 13.1 19.6 49.6% 2 pcs 0 pcs 100.0% 1140 396 65.3%22 V Blower Assembly 10.3 14.0 35.9% 23.0 10.0 56.5% 3444 492 85.7%

43.2% 62.3% 38.0%

Supplier Mass Production 3P Results

Supplier#

Floorspace:

Floorspace

Average % Improvement

TitlePPLH WIP

PPLH: WIP:

Baseline 3P Result % Improve Baseline 3P Result % Improve Baseline 3P Result % Improve1 MMP Final Repair Area 96820 62298 35.7% No Change 8626 6122 29.0%2 MMP AF Sub-Assy Area Layout 32306 10442 67.7% No Change 5032 4381 12.9%3 MMP Tank & Rear Fender Assembly 747 585 21.6% 38 20 47.4% 508 371 27.0%4 MMP Engine Assy 46.3 22.3 51.9% 94 55 41.5% 2934 2416 17.7%5 MMP Paint - PWC Move (L1 to L3) 2037 1158 43.2% 884 402 54.5% 3976 1557 60.8%

44.0% 47.8% 29.5%Floorspace:

Floorspace


TitleAssociate Walking Distance WIP

Assoc Walking: WIP:

In-house (MMP) 3P Results

Plant#

Baseline 3P Result % Improve Baseline 3P Result % Improve Baseline 3P Result % Improve1 A Rail Sub-Assy 11.3 18.8 66.7% 50 parts 5 parts 90.0% 740 396 46.0%2 B Door Liner Assembly 2.4 3.2 33.3% 36 parts 16 parts 57.0% 4990 2040 59.0%3 C Tire Cover Assembly 19.1 31.9 67.0% 3.8 days 0.8 days 79.0% 4800 620 87.1%4 D Visor Assembly 19.0 31.0 63.2% 3.8 days 3.2 days 16.0% 1672 379 77.0%5 E Tire Mount & Rear Fork Assy No Change 1.75 days 1.01 days 42.3% No Change6 F Under Cover Injection Molding 28.0 55.0 96.4% No Change 512 360 29.7%7 G Rear Knuckle Casting 25.7 34.3 33.5% 560 parts 180 parts 68.0% 2434 1767 27.0%8 H Throttle Body Assy 19.4 20.8 7.2% No Change 855 714 17.0%9 I Brake Hose Bracket Weld 146.0 211.0 44.5% No Change No Change

10 J Sash Weld 32.7 45.0 37.6% No Change 2275 1138 47.0%11 K Rear Tray Injection Molding 15.5 26.3 69.7% 5 parts 3 parts 40.0% 242 196 19.0%12 L Rear Knuckle Machining 49.8 53.8 8.0% No change 2112 1848 12.5%13 M Trailing Arm Assembly 14.5 14.5 0.0% 1.7 days 1.0 days 41.0% 1029 1029 0.0%14 N Front Knuckle Sub-Assembly 51.3 102.5 99.8% 3.0 days 1.2 days 60.0% 1240 1204 3.0%

48.2% 54.8% 35.4%Floorspace:

Floorspace


TitlePPLH WIP

PPLH: WIP:

Supplier New Model 3P Results

Supplier#

Average 3P Improvement: PPLH: 45.1%, WIP: 58.9%, Floor Space: 36.6%

Supplier Support Model Supplier Support Model –– Lean NetworkLean Network



Stability Concerns

StabilityProjects

Benchmark Suppliers

Training

Teaching

Problem Solving

Hands On Doing

Training

Teaching

Facilitating


Training

Teaching

Networking/Showcase

Benchmarking


REACTIVE

PROACTIVE

NEXTLEVEL


Activity

Lean Network




High Level Purpose:


Methodology:


Supplier Lean NetworkSupplier Lean NetworkSupplier Challenges:

1. Overproduction2. Excess inventory3. Defects 4. Non-value added

processing5. Waiting6. Excess motion7. Transportation8. Underutilized people

Typically 95% of Total Lead Timeis Non-Value Added!!!

5%

Non-value added

Value added

Lean Manufacturing Methods are the keys to meeting these challenges

• Outstanding Quality• Global Competition• Flexibility• Global Sourcing

Establish a Lean NetworkEstablish a Lean Network

• Comprised of 40+ Supplier Partners• Lead by Steering Committee

• 9 Supplier & 2 Honda members• Facilitated by Honda

• Coordinate meetings & communicate to members

• Arrange Benchmarking visits

• Share Best Practices

• Coordinate Lean Workshops & Lean Training

• Stabilize Network & position for growth

• Showcase Lean Implementations at annual Lean Network Conference

Stable Suppliers

Initial FocusBenchmark

Non-stable Suppliers

Selection of Suppliers

Team atmosphere for mutual learning, assistance & improvement within the Supplier base (networking)

Team atmosphere for mutual learning, assistance & improvement within the Supplier base (networking)

Lean Supplier Network Mission StatementThrough a diversified network of suppliers, guide the development,

implementation, and measurement of Lean manufacturing practices by information sharing, best practices, and active participation

Lean Supplier Network Mission StatementThrough a diversified network of suppliers, guide the development,

implementation, and measurement of Lean manufacturing practices by information sharing, best practices, and active participation

•Benchmarking•Benchmarking

•Project Support•Project Support

•Workshops (VSM, Kanban, 5S)•Workshops (VSM, Kanban, 5S)

•Training (Mat’l Flow, TPM, Ergo)•Training (Mat’l Flow, TPM, Ergo)

•Quarterly meetings•Quarterly meetings

•Monthly Steering Cmte Meetings•Monthly Steering Cmte Meetings

NetworkProvidesNetworkProvides

Lean Principles & Best Practices To Improve QCD

Supplier Lean NetworkSupplier Lean Network

Lean Network Workshop HistoryLean Network Workshop History

1,828108Totals

68342FY 0699738FY 0544828FY 04

AttendeesClassesKi

• VSM (Value Stream Mapping• Set Up Reduction• Pull / Kanban Systems• Cellular Mfg• Yokoten – Maintenance• TPM• Quick Changeover• Material Flow• Ergonomics & Safety• MOST & Standardized Work• OEE• Labeling & Traceability• 5S• Energy Cost Reduction• Safety• Suggestion SystemsAttendance since 80Ki = 719 Supp Assoc

• VSM (Value Stream Mapping• Set Up Reduction• Pull / Kanban Systems• Cellular Mfg• Yokoten – Maintenance• TPM• Quick Changeover• Material Flow• Ergonomics & Safety• MOST & Standardized Work• OEE• Labeling & Traceability• 5S• Energy Cost Reduction• Safety• Suggestion SystemsAttendance since 80Ki = 719 Supp Assoc

Workshops provided by Network membersWorkshops provided by Network members

Over 2,500 Supplier Associates trained byHonda and Network Members since FY 04Over 2,500 Supplier Associates trained byHonda and Network Members since FY 04

• Lean Overview• VSM (Value Stream Mapping)• Lean Simulation• Pull / Kanban Systems• 5S• Visual Workplace Mgmt• OEE• 3P (Prod. Prep. Process

• Lean Overview• VSM (Value Stream Mapping)• Lean Simulation• Pull / Kanban Systems• 5S• Visual Workplace Mgmt• OEE• 3P (Prod. Prep. Process

Training provided by HondaTraining provided by Honda

Expectations & ResultsExpectations & Results• Must have top management support.• No layoffs as a result of improvement activity.• Methods learned are applied at your facility.• Results of Projects are showcased for the benefit of the

network.– At Quarterly Meetings– At Fall Lean Network Conference

Lean Network ResultsLean Network ResultsManpower Efficiency

Manpower Efficiency - Sq. Feet- Sq. Feet Inventory

ReductionInventory Reduction Total SavingsTotal Savings

+8.1%+8.1% -447,000-447,000 -$30.7M-$30.7M -$97.1M-$97.1M


Understand future direction of the industry and develop strategies and systems to enable Honda Motors and our suppliers to adapt to

changes and gain competitive advantage.

Develop and manage material flow to meet plant requirements with optimum inventory levels at competitive logistics cost.

Manage purchased parts cost to achieve globally competitive costs and support Honda Motors’ competitiveness.

Build a world class purchasing organization through development of associates and business practices

We will develop and manage a competitive and stable supply base to support all of Honda’s North American Manufacturing facilities

with world class Quality, Cost, Delivery, and Development.

North America Purchasing VisionNorth America Purchasing Vision

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Honda Overview Purchasing in NA Supplier Developmentto support all of Honda’s North American...

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