Strategic Supply Chain Management in Honda: Analytical Essay

Honda Company

Introduction and Products Manufactured:

Honda company produces products of high quality, at reasonable cost worldwide for the satisfaction of the customers. It is the third largest automobile company in the world. Now it has also introduced products for agricultural, industrial and domestic purpose. Soichiro Honda and his partner Takeo Fujisawa are the founders of this company. Both of them formed the company in 1948 with combined efforts, Fujisawa provided financial, marketing strategies, assets and capital for the establishment of the company. Honda has spread from Japan to various parts of the world, in USA it was established in 1959. ((N.A.), (N.D.), Honda Motor Company Ltd, Paras. 1,2)1. In 1969, it was founded in Canada. Then in 1986 Alliston plant was established in Ontario. In 1994, Canada exported products to north America, Brazil, in 1997 to China and 1999 to Japan. Then in 2010, its new head office was established in Markham, Ontario. (William, E., 2016, November 3, Paras. 2-5)2.

Products Manufactured

Honda company is a manufacturer and supplier of various products like automobiles, diesel engines, battery-operated vehicles, robotics to make work of people easier. It also produces machines for disabled to move from one place to another, generators, snowblowers, lawn movers. Power products like water pumps, grass cutters sprayers, pressure washers. ((N.A.), (N.D.), Honda Motors Co Ltd., Para. 5)3.

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Sourcing, Manufacturing facilities and Distribution:

Honda company presently is sourcing from many suppliers for raw material which are located in Canada, USA, Japan. These suppliers provide raw materials to manufacturing plants located in Ontario, Canada. Second is in Greensburg, USA. The third plant is in Marryville, Ohio and east Liberty, USA. These manufacturing plants are sourcing from different suppliers of different countries. Manufacturing facilities provided to employees are flexible and focus on the future. Honda company manufactures products based on concept of green factory. With the establishment of manufacturing plants, this company has introduced innovations with more efficiency, less time consumption and less cost effectiveness. Recycling of material to obtain aluminium for the production of a 4-cylinder engine in 2008 made manufacturing easy. (Essays UK, 2015, June 22, Para. 4)4.

The manufacturing process includes various steps to produce final finished products for sale. Then vehicle quality shipped to dealer. Distribution of manufactured product means how it is introduced for sale in the market. Automobiles are distributed from wholesalers and then to retail distributors which are finally supplied to customers.

Flowchart:

Operation Strategy:

Honda’s operation strategy is related to corporate and business strategy. The main mission is to produce good quality products at a reasonable price. Its strategy includes goals, objectives, vision, mission of the company. It has helped this company to spread globally with the establishment of manufacturing plants. The main aim of Honda relates to creation of new ideas, and innovations with hardwork and determination. For operational success focus is made on the cost, quality, speed. For example, Research and development department ensures good quality by testing, analysis, evaluation of equipment and machinery. All practices are ensured that they are performed efficiently. Raw materials are evaluated, to be available as per requirement in abundance. Use of raw material is analysed, for efficient production. Collaborative teamwork is examined to be effective, to attain success at the international level. Honda is one company that focuses on environment. For example, it is the first company to produce fuel less cars to prevent air pollution, thereby increasing the efficiency of fuel, the performance of car. Innovations like robots, machined for disabled, have helped people to move form one place to another by making their work easier. (Essays UK, 2015, June 22, Paras. 8,10,11)5.

Supply Chain Strategic design:

Supply chain strategy means making plans with objectives for designing, management processes, so as to reach business goals. These strategies are followed with accuracy like operational strategy which includes design, quality distribution and transportation of manufactured products to warehouse. Honda company is following supply chain strategy for distribution, sourcing. All work is divided among different departments and supervised for productivity. Better communication among workforce, and departments provide competitive place in marketplace. Its process includes Plan- plans are made to manufacture products according to demands in society, to accomplish requirements of customers. Suppliers- suppliers are contacted, selected to obtain raw material in bulk, with low cost expenditures. Manufacturer- products are manufactured in factories according to designs proposed in plans. Modifications, additions are brought about as per demands. Warehousing- manufactured products are stored in huge quantity in Toronto. These products are preserved and kept secure for delivery. Distribution- dealers/wholesalers obtain manufactured products from factories by road, rail or air transportation to sell to customers. Just in time delivery assures confidence, trust of customers, increasing efficiency of company. Buying policy- for example, Honda company introduced pre-owned program for products that considers only those products which pass through 182-point inspection. Warranty is offered for every product depending on its function. Customer satisfaction- Honda dealers are concerned not only with distribution, but also satisfy customers with long term relationships, so as to develop marked position in marketplace. (Alnasser, A.M., 2013, December, Paras. 9-14)6.

Product design:

Product- One of the most used product manufactured by Honda is snow blowers. First it was introduced in 1981 to make life of the people easy. It was of three types which were single stage, dual stage and the hybrid stage snow blowers. Single stage snowblower is compact, easy to operate and lightweight. It is basically used for the homes purpose. Dual stage snowblower is preferred for large areas with heavy snow. Hybrid snowblowers have better snow cleaning capacity. Design- It is easy to use. The controls are accessible with ease have 4 stroke engine which makes process quick and easy. Dual snowblowers has low temperature rubber tracks and gripping cleats, it can clear snow in steps, sidewalk, steep inclines. Single lever is used for ground speed without affecting rotation speed. Height and direction of snowblower discharge is with joystick control. It has electric starter of 120-volt ac. Some models have 12-volt dc electric starter. It has long lasting durable design to tackle cold and has 36 months warranty. ((N.A.), (N.D.), Honda Snowblowers, Para. 1-5)7.

Honda Civic sedan is famous most commonly used automobile having following features, Exterior- it has standard led daytime lights and led headlights. There are 17 inches aluminium alloy wheels. Fog lights to have visibility in fog are present. One touch power moon roof with tilting feature is present. Interior- heated front and back seats are available for winters. Leather covered steering with audio, cruise controls is present. 8-way power drivers seat and four-way power passenger seat is available. And for automatic control of climate dual zone is present. Technology- forward collision warning system, helps to detect vehicles in front by audible, visual alerts. Lane departure warning system, monitors lane position by visual alerts. Adaptive cruise control system and low speed follow, is designed to keep speed constant. Honda satellite linked navigation system, gives direction and detect speed limit. Rear view camera helps to look back while reversing. It has two earth dream 4-cylinder engines. ((N.A.), (N.D.), 2018, Honda Civic Sedan, Features)8.

Sourcing strategy:

Raw Material Sourcing- Raw material required by company is iron for steel to make body, roof, panel of various manufactured products, aluminium is used for light weight wheels. The glass, rubber for the tires, belts, plastic (obtained from petroleum products) for door handles, dashboards which are highly durable. These are supplied by suppliers to manufacturing Honda company for production of various appliances, products. (Maverick, B.J., 2017, December 11, Paras1-7)9.

Supplier, Customer Strategy- Honda has followed philosophy to be frank, have open communication and collaborative work with cooperation for suppliers. All these approaches have ensured their targets to be achievable. Negotiations have done many contributions, as said by Rick Mayo, purchasing manager at Marysville Honda plant. Cost modelling process constitutes determination of cost of various components by integrated process. They overcome problems, issues faced by suppliers by providing better resolution. Manufacturing plants are located close to suppliers for convenience. Strategy followed by Honda company organises various programs, activities related to development of suppliers and awards for them. To develop good supplier relationship, company devotes most of its time, money, investments for construction work of suppliers. For example, Honda applied BP process for Tower automotive, which is supplier of welded assembled parts, stamped parts. It helped this supplier for renovation, redesigning of its working cell for making assembled parts for automotive. Redesigning included all like front and back door, roof connecting to floor. This doubled production of about 63 to 125 parts per hour. As a result of establishment of fixed position, the wear and tear of welding gun from welding tips reduced and increased welds from 50,000 to 250,000. Communication with suppliers for productivity, quality of products and its delivery to customers, is made by open discussions. Expectations of suppliers have listened patiently and honestly. Company tries to sort out problems faced by suppliers related to quality, delivery, by organising timely meetings to give suggestions. This leads to less time and cost consumption. Long term commitments motivate suppliers to do work willingly, and appraisals from manufacturing companies encourages them and build strong relationships. ((N.A.), 1998, November 9, Automotive News, Paras. 4-23)10.

Logistic Functions:

From manufacturing plant products are produced with the help of raw material taken from the suppliers. Then these products with final finishing, are delivered to warehousing areas, by road transportation where these are stored, the packaging is done to deliver them to dealers or distributers by road or by air.

Midwest Express Inc is strong globally spread consolidation centre. It includes warehousing, consolidation/deconsolidation, export packaging and vendor services. Located in east liberty, Ohio it provides transportation facilities to Honda company in Indiana, Greensburg, Alabama. It supports 13 Honda products to assemble at a time covering 2,833,902 sq. feet area for warehousing. ((N.A.), (N.D.), Midwest Express, Inc., Paras. 2,3,8)11. Komyo logistics in America provides warehousing, distribution facilities, and consolidation packaging to Honda company. Transportation is done by road by fleet of trucks. ((N.A.), (N.D.), Warehousing Distribution, Paras. 1,2)12.

One more, Simcoe parts service Inc. is located in north of Toronto area, Alliston. It is member of group of Honda logistics. Transportation is done by road. They ensure accurate delivery of automotive parts at right time. ((N.A.), (N.D.), Simcoe Parts Service Inc., 2018, Paras. 1-5)13. Classic Honda in Canada is famous dealer for distribution of Honda products. ((N.A.), (N.D.), Classic Honda)14. Norm reeves Honda superstore in California is distributer of Honda products in USA. ((N.A.), (N.D.), Norm Reeves Honda)15. Carson Honda in Los Angeles is another Honda distributer in USA. ((N.A.), (N.D.), Carson Honda)16. Lindsay Honda is distributor of products in Midwest, Ohio in USA. ((N.A.), (N.D.), Lindsay Honda)17. From all these dealers customers easily purchase products manufactured by Honda company.

References

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2. (William, E., 2016, November 3, Paras. 2-5)2. Honda Celebrates 30 years of Canadian production. Retrieved on December 28, 2018 From https://www.autotrader.ca/newsfeatures/20161103/honda-celebrates-30-years-of-canadian-production/
3. ((N.A.), (N.D.), Honda Motors Co Ltd., Para. 5)3. Reuters. Retrieved on December 28, 2018 From https://www.reuters.com/finance/stocks/company-profile/HMC
4. (Essays UK, 2015, June 22, Para. 4)4. Operational Strategy of Honda Company. Retrieved on December 28, 2018 From https://www.ukessays.com/essays/management/operational-strategy-of-honda-company.php
5. (Essays UK, 2015, June 22, Paras. 8,10,11)5. Retrieved on December 28, 2018 From https://www.ukessays.com/essays/management/operational-strategy-of-honda-company.php
6. (Alnasser, A.M., 2013, December, Paras. 9-14)6. Honda Supply Chain, International Journal of Scientific and Engineering Research, Volume 4, Issue 12. Retrieved on December 28, 2018 From https://www.ijser.org/paper/Honda-Supply-Chain.html
7. ((N.A.), (N.D.), Honda Snowblowers, Para. 1-5)7. Honda Snowblowers. Retrieved on December 28, 2018 From https://powerequipment.honda.ca/snowblowers
8. ((N.A.), (N.D.), 2018, Honda Civic Sedan, Features)8. Honda Canada | Official Automotive Website. Retrieved on December 28, 2018 From https://www.honda.ca/
9. (Maverick, B.J., 2017, December 11, Paras1-7)9. What raw materials do Auto manufacturers Use?. Retrieved on December 28, 2018 From https://www.investopedia.com/ask/answers/062315/what-types-raw-materials-would-be-used-auto-manufacturer.asp
10. ((N.A.), 1998, November 9, Automotive News, Paras. 4-23)10. How Honda Cuts costs, satisfies suppliers. Retrieved on December 28, 2018 From https://www.autonews.com/article/19981109/ANA/811090765/how-honda-cuts-costs-satisfies-suppliers
11. ((N.A.), (N.D.), Midwest Express, Inc., Paras. 2,3,8)11. Midwest Express Inc. Retrieved on December 28, 2018 From https://midwestexpinc.com/
12. ((N.A.), (N.D.), Warehousing Distribution, Paras. 1,2)12. Warehousing and Distribution. Retrieved on December 28, 2018 From http://komyoamerica.com/logistics/warehousing/
13. ((N.A.), (N.D.), Simcoe Parts Service Inc., 2018, Paras. 1-5)13. Simcoe Parts Service. Retrieved on December 28, 2018 From http://www.simcoeparts.com/
14. ((N.A.), (N.D.), Classic Honda)14. Classic Honda. Retrieved on December 28, 2018 From https://www.classichonda.ca/
15. ((N.A.), (N.D.), Norm Reeves Honda)15. Norm Reeves Honda Superstore. Retrieved on December 28, 2018 From https://www.normreeveshondacerritos.com/worlds-largest-honda-dealer/
16. ((N.A.), (N.D.), Carson Honda)16. Carson Honda. Retrieved on December 28, 2018 From https://www.carsonhonda.net/
17. (N.A.), (N.D.), Lindsay Honda)17. Lindsay Honda- Serving Colombus. Retrieved on December 28, 2018 From http://mobile.lindsayhonda.com/