HRM Batch m



Spring Summer 09-11 m 

IIPM, Bangalore 
 
30th August 2010 m


Ê áhe Automotive industry is one of the largest
industries in the United States
Ê New and used automotive sales and repairs generates
over $200 billion dollars of the GDP each year.
Ê New car and light weight truck sales generated $699
billion dollars in revenue in 2003.
Ê áraditionally, domestic manufacturers have
dominated the market in the United States.
Ê áhe top three domestic manufacturers include:
J ˜ 

 
J  
J 
  
Ê In recent years, these top domestic manufacturers have
concentrated on the market for sport utility vehicles
and light trucks.
Ê áhis narrow concentration has allowed foreign
manufacturers, primarily Japanese manufacturers, to
steal some of the market share for cars.
Ê In the past few years, General Motors, Ford, and
DaimlerChrysler·s market share for cars has been cut in
half.
Ê While domestic manufacturers still dominate their
foreign competitors, the Japanese market share of cars
is growing.
Ê Consumers are choosing Japanese cars over domestic
because of their competitive price, and high quality
reputations.
Ê áhese 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.
Ê Careful site selection of their US manufacturing plants
Greenfield Manufacturing Plants
Ê In- depth supplier relationship
Close and interactive, similar to a partnership
Uses the concept keiretsu
Ê Autonomic organizational structure
Ê Japanese/North American manager mix
Ê New entrants focus on more established products and
processes
Ê Suppliers are involved with development and
design of new products
Ê Eg. - Accord
Ê Relationship is much like a partnership
Ê Requires an in-depth supplier selection process
 Conduct joint improvement activities
 Share information intensively, but selectively
 Develop suppliers' technical capabilities
 Supervise suppliers
 áurn supplier rivalry into opportunity
 Understand how suppliers work
Ê Honda uses their economies of scale by
working with their parts suppliers to order raw
materials in large quantities.
 Honda
Honda Parts Supplier
Purchasing
Purchasing Honda Trading
Parts Supplier

Parts Supplier

Raw Materials Parts Supplier Honda

Mill Assembly
Plant
Parts Supplier
Honda
Parts Supplier Assembly
Plant
Ê Also known as executional drivers that reduce
operating costs and increase productivity
J Economy of Scale ² All purchasing done by Honda
árading America Corp.
J áechnology ² Multipurpose machinery
J Capacity Utilization ² Honda operates facilities in
every major market they enter
Ê Iá advancements
J 3rdwave distribution software by Blinco Systems
Assures parts quality, controls availability, guarantees
delivery, provides consistent materials pricing
Ê External factors
J Increasing oil prices effect transportation costs for all
markets
Ê Strategic and operational variables that must be
factored into the design of a company·s global
value chain
J Global value chain
Demand chain (marketing, sales, service)
Supply chain (sourcing, manufacturing, logistics)
Product development (R&D, design, engineering,
development, and launch)
Ê áhe key element for Honda is the flow of
information with their suppliers
J 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
J In-house guest engineers
Ê Strategic sourcing ² ´maximizing the value
added through your external suppliersµ
J Will chose highest supplier in overall service (not
just lowest price)
Ê ´áarget pricingµ
J Price table for parts
J If price cannot be met, Honda will work with
supplier to get costs down
Ê Customer Satisfaction is top priority
J Accomplished through suppliers competitiveness in
quality, cost, delivery, development, and
management (Q.C.D.D.M.)
Ê Quality
J Most important factor
J Must be built into production process
Ê Cost
J Suppliers are given target costs
J Cost reductions through own ideas, technology,
improved productivity, along with joint efforts with
Honda in value engineering, and value analysis
Ê Delivery
J Suppliers must use just-in-time production system
Ê Development
J Uniqueness in design and specifications
J Helps create identity for Honda

Ê Management
J Positive attitude
J Measured by Q.C.D.D
Ê Established in 1985, started its operation in
1986 along with pre delivery inspection facility.
Ê 4000 employees, engineers, manufactures.
Ê 1.3 billion pounds ² for 270 acres site.
Ê 1 car in 80 seconds
Ê 250,000 cars per year ² CRV, Civic
Ê Engine plant.
- Every hour 1600 kilos of aluminum used to
produce 60 engine blocks
Ê Casting
Ê Machining
- engine unique number
Ê Engine assembly area
Ê áransferred to car plant
Ê Car body
- Flat sheets
Ê Welding department
Ê Pre treatment process
Ê Paint
Ê Bumpers are produced
Ê Assembly frame department
Ê Material logistics
 video 1
 video 2