Operations Management

Honda:

Honda Motor Company, Ltd is a Japanese multinational corporation primarily known as a

manufacturer of automobiles and motorcycles.

Honda is the world's largest manufacturer of motorcycles as well as the world's largest
manufacturer of internal combustion engines measured by volume, producing more than 14
million internal combustion engines each year. Honda surpassed Nissan in 2001 to become the
second-largest Japanese automobile manufacturer. As of August 2008, Honda surpassed Chrysler
as the fourth largest automobile manufacturer in the United States. Honda is the sixth largest
automobile manufacturer in the world.

Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand,
Acura in 1986. Aside from their core automobile and motorcycle businesses, Honda also
manufactures garden equipment, marine engines, personal watercraft and power generators,
amongst others. Since 1986, Honda has been involved with artificial intelligence/robotics
research and released their ASIMO robot in 2000. They have also ventured into aerospace with
the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 HondaJet,
scheduled to be released in 2011. Honda spends about 5% of its revenues into R&D

From a young age, Honda's founder, Soichiro Honda had a great interest in automobiles. The
first drafts of his design were rejected, and Soichiro worked painstakingly to perfect the design,
even going back to school and pawning his wife's jewelry for collateral. Eventually, he won a
contract with Toyota and built a factory to construct pistons for them, which was destroyed in an
earthquake. Due to a gas shortage during World War II, Honda was unable to use his car, and his
novel idea of attaching a small engine to his bicycle attracted much curiosity. He then established
the Honda Technical Research Institute in Hamamatsu, Japan, to develop and produce small 2-
cycle motorbike engines. Calling upon 18,000 bicycle shop owners across Japan to take part in
revitalizing a nation torn apart by war, Soichiro received enough capital to engineer his first
motorcycle, the Honda Cub. This marked the beginning of Honda Motor Company, who would
grow a short time later to be the world's largest manufacturer of motorcycles by 1964.

Honda in U.A.E:

Established in 1971, Trading Enterprises owns the sole distribution rights for Honda vehicles,
motorcycles, marine engines, power products and parts as well as Volvo, Chrysler, Jeep and
Dodge vehicles.

Competing in the UAE's Japanese, American and European automotive marketplace, the
company is supported by a network of modern showrooms, workshops and parts outlets across
the UAE, with sales and after-sales operations existing in all seven emirates.

In 1977, Trading Enterprises was awarded the official distributorship rights for Honda in the
UAE. Since those early days, sales of the Honda premium range of technically advanced cars
have grown steadily and Trading Enterprises is now recognized as one of the largest independent
Honda distribution companies in the world.

Honda has been a strong and popular brand in the United Arab Emirates since it was first
introduced here in the 1970's by the Al Futtaim family.

Under the control of the Al Futtaim Group Honda's presence in the market has grown
considerably aided of course by excellent products - cars, motorcycles and power equipment.

Trading Enterprises is the sole distributor for all Honda products in the UAE and has a
nationwide network of showrooms and workshops right across the UAE. This enables all people
of the UAE to experience and enjoy the Honda range of products easily and conveniently.

Honda Deals in Cars, SUV’s and Motorcycles. Following is some detail about its products

Cars:

Accord:

Performance Data

• Engine: 2.4L DOHC i-VTEC

• Power: 178hp @ 6500rpm (Net)
• Torque: 22.6 kg-m @ 4300rpm (Net)
• Transmission: 5 Speed Automatic

Safety Features

• Airbags - Driver & Passenger Front Active Headrest

• Anti-lock Braking System (ABS) + EBD
• VSA (Vehicle Stability Assist)
• Keyless Entry - 2 Transmitters

Civic:

Performance Data

• Engine: 1.8L, i-VTEC In-line 4Cyl, 16V, PGM-FI

• Maximum Power: 138hp @ 6,300rpm (Net)
• Maximum Torque: 17.7kgm @ 4,200rpm (Net)
• Transmission: 5 Speed Auto
Safety Features

• Dual Airbags - Driver & Passenger with Intelligent Sensor Control

• Anti-Lock Braking System (ABS) + EBD
• Front Active Headrest
• Keyless Entry System
• Immobilizer

City:

Performance Data

• Engine: 1.5L, i-VTEC, 4 Cyl

• Power: 118 hp @ 6600 rpm (NET)
• Torque: 14.8 kgm @ 4800 rpm (NET)
• Transmission: Direct 5 Speed Automatic

Safety Features

• Dual Airbags (Driver & Passenger)

• Anti Lock braking System (ABS+EBD)
• Brake Assist (BA)
• Immobiliser System

Jazz:

Performance Data

• Engine: 1.5L, i-VTEC, 4 Cylinders

• Power: 118hp @ 6600rpm (Net)
• Torque: 14.8Kgm @ 4800rpm (Net)
• Transmission: 5 Speed Automatic

Safety Features

• Dual Airbags - Driver and Passenger

• Side Airbags
• Anti Lock Braking System (ABS)
• Immobiliser with Security Alarm System
• High-Mount Braking Light (BULB)
Odyssey:

Performance Data:

• Engine: 3.5L, V6, VTEC

• Power: 252hp @ 5750rpm: NET
• Torque: 34.5Kgm @ 5000rpm: NET
• Transmission: 5 Speed Automatic

Safety Features:

• Driver & Passenger Airbags

• Side Curtain Airbags
• Anti Lock Braking System (ABS) With (EBD)
• Vehicle Stability Assist (VSA) & Traction Control
• Immobiliser with Security Alarm System
• Keyless Entry System

4WD:

CRV:

Performance Data

• Engine: 2.4L, 4 Cyl, DOHC I-VTEC Unleaded

• Maximum Power: 168hp @ 5,800rpm (Net)
• Maximum Torque: 22.4kgm @ 4,200rpm (Net)
• Transmission: 5 Speed Automatic
• Realtime Dual Pump
• 4 Wheel Drive (4WD)

Safety Features

• Dual Airbags with Active Headrest

• Side & Side Curtain Airbags
• Anti - Lock Braking System with ABS + EBD
• Vehicle Stability Assist (VSA)
• ACE Body Structure
• Immobiliser with Security Alarm System
• Keyless Entry - 2 Transmitters
Pilot:

Performance Data

• Engine: 3.5L, V6, SOHC VCM-2

• Power: 253hp @ 5700rpm (NET)
• Torque: 35.4Kgm @ 4800rpm
• Transmission: 5 Speed Automatic
• 4WD System - VTM-4 with Lock Function
• Smallest Turning Radius (5.6m)

Safety Features

• Driver and Passenger Airbags with Active Headrest

• Side & Side Curtain Airbags (OPDS)
• Anti Locking Brakes (ABS+EBD) with Brake Assist
• VSA (Vehicle Stability Assist) with Traction Control
• FR & RR Parking Sensors
• Hill Start Assist System (HSA)
• FR Active Headrest
• Keyless Entry System
• Child Seat Options-4

Motorcycles:

• Courier
• Super sport
• Cruiser
• Off road
• Sport ATV

Five performance factors:

Quality:

The business meanings of quality have developed over time. Various interpretations are given
below:

1. ISO 9000: "Degree to which a set of inherent characteristics fulfills requirements”. The
standard defines requirement as need or expectation.
2. Six Sigma: "Number of defects per million opportunities."

Improved productivity is a source of greater revenues, employment opportunities and

technological advances. However, this has not been the case historically, and in the early 19th
century it was recognized that some markets, such as those in Asia, preferred cheaper products to
those of quality. Most discussions of quality refer to a finished part, wherever it is in the process.
Inspection, which is what, quality insurance usually means, is historical, since the work is done.
The best way to think about quality is in process control. If the process is under control,
inspection is not necessary.

Many different techniques and concepts have evolved to improve product or service quality:
• Quality assurance: Prevention of defects, such as by the deployment of a quality
management system and preventative activities like FMEA.
• Quality control: Detection of defects, most commonly associated with testing which takes
place within a quality management system typically referred to as verification and
validation.
• Quality management is focused not only on product quality, but also the means to
achieve it. Quality management therefore uses quality assurance and control of processes
as well as products to achieve more consistent quality..
• Just in time (JIT): Just-in-time (JIT) is an inventory strategy that strives to improve a
business's return on investment by reducing in-process inventory and associated carrying
costs.
• Total Quality Management: Also referred to as TQM. It is a philosophy that embraces all
activities through which the needs and expectations of the customer (both internal and
external) and the community, and the objectives of the organization, are satisfied in the
most efficient and cost-effective way possible by maximizing the potential of all
employees in a continuous drive for improvement.
• Quality Circles: Teams that follow a standard process of problem identification, root
cause analysis, problem solving and implementation. In Japanese firms there is a greater
focus on statistical quality control, employees meet

Quality techniques in Honda:

• Quality enhancement: Honda considers the ongoing challenge of quality enhancement to

be of the highest priority. We’re working on it on a daily basis, seeking to enhance
customer satisfaction with respect to all of our products and services.
• Quality assurance: Honda has established Quality Innovation Centers worldwide to
prevent avoidable product quality issues from arising and to enhance our capacity to
swiftly resolve difficulties whenever they arise. Specialized service departments at these
centers are equipped to handle cases referred to them by local dealerships. They provide
timely diagnosis and resolution of any quality issues, and keep customers and technicians
fully up to speed by disseminating the latest updates on recommended maintenance
procedures. By carefully documenting issues and solutions, then sharing them with the
rest of the organization, our dedicated associates are working both to resolve issues and
prevent them from recurring.
• Promoting quality worldwide: Honda facilities around the world are certified under ISO
quality assurance and environmental management systems standards, and special product
quality assurance systems have been developed and implemented in many local markets.
Since Honda manufactures products and procures both parts and materials in many
different countries, however, a global quality assurance system is required. To that end,
we are currently implementing the Global Honda Quality Standard, or G-HQS, with a
view to simultaneously ensuring the quality of every single Honda product, regardless of
 where it is purchased. Under the direction of top management, our facilities around the
world are working constantly to harmonize both their products and their services to this
global standard, taking care to prevent any recurrence of known issues and to deliver to
the customer products of the highest possible quality

Systematic response to customer issues

Protecting personal information: Honda has always regarded customers’ personal information as important and
private, and has taken appropriate measures to protect that privacy. In view of the new Personal Information
Protection Act enacted in Japan on April 1, 2005, Honda has instituted new measures that are even more
comprehensive and rigorous. We have organized training seminars and distributed communications aids to
dealerships to ensure that every member of the Honda team in Japan handles this important issue with due
diligence and care.
Quality Control: In Japan, Honda offers three different quality control courses, each focusing on a specific skill set.
Since 1971, Honda Basic Courses (HBC) have provided quality education not only to Honda associates, but also to
trainees sent to us by suppliers, thereby helping cultivate new leaders in quality manufacturing.
Honda, as the other Japanese automotive companies, do not use the same methods as used by the US firms (i.e.:
ISO/TS 16949:2002, PPAP, APQP, FMEA, SPC and MSA). The do however spend a lot of up front planning time
and involve their suppliers to try to ensure that things are designed well and to the customer wants and needs long
before a vehicle is ever produced.
So, they are much more into quality assurance versus tradition quality control which involves more inspections of
products. Honda still does a fair amount of inspection and testing, however, it is done by the people actually doing
the work (workers check their own work) and thing like process behavior studies are done to ensure that
manufacturing processes are stable.

Flexibility

A clear result of responding to a dynamic environment is that organization change their products and services and
changes the way they do business. This performance objective is known as ‘flexibility’.

Improving manufacturing operations is not an option for companies that want to respond better to their customers,
that must take costs out of their systems and processes, and that hope to grow and improve their bottom lines. As I
saw during my visit to East Liberty Honda's new manufacturing system seems to be the industry leader in these
areas at the moment. But it's critical for every automaker to work hard and try to move the benchmark Honda has
set.

Ultimately, taking cost out and improving quality in manufacturing operations will help companies build better
vehicles at lower costs, and thus provide a better return for customers and shareholders.

There's also the issue of flexibility. Honda, with its new manufacturing system, will be able to build just about any
Honda vehicle at any of its plants -- a huge advantage for a company that wants to provide customers with the
hottest selling vehicles.

Flexibility has the advantages of:

 Shorter call times with higher customer satisfaction

 Reduced outsourcer costs
 No system maintenance and support burdens

Dependability

Another performance objective is dependability that means doing things in time for customers to receive their
goods or services when they are promised.
The general performance objective of dependability is divided into two specific measurements, namely (a)
delivering on time and (b) keeping the customer updated.

• Externally (no matter how it is defined) dependability is generally regarded by customers as a good thing.
Certainly being late with delivery of goods and services can be a considerable irritation to customers.
Especially with business customers, dependability is a particularly important criterion used to determine
whether suppliers have their contracts renewed. So, again, the external affects of this performance objective
are to increase the chances of customers returning with more business.
• Internally dependability has an affect on cost. The chapter identifies three ways in which costs are affected
– by saving time (and therefore money), by saving money directly, and by giving an organisation the
stability which allows it to improve its efficiencies. What the chapter does not stress is that highly
dependable systems can help increase speed performance.

Honda is always in command of serving their customers the best, the delivery times given to customers depednign
upon the car option and models is thus verified and Honda tries its best to never to delay any customer’s order.

Speed

Speed is a shorthand way of saying ‘Speed of response’. It means the time between an external or internal
customer requesting a product or service, and them getting it. Again, there are internal and external affects.

• Externally speed is important because it helps to respond quickly to customers. Again, this is usually
viewed positively by customers who will be more likely to return with more business. Sometimes also it is
possible to charge higher prices when service is fast. The postal service in most countries and most
transportation and delivery services charge more for faster delivery, for example. For Honda the external
speed describes how much faster an order can be processed in contrast with its competitors.

• The internal affects of speed have much to do with cost reduction. The chapter identifies two areas where
speed reduces cost (reducing inventories and reducing risks). The examples used are from manufacturing
but the same thing applies to service operations. Usually, faster throughput of information (or customers)
 will mean reduced costs. So, for example, processing passengers quickly through the terminal gate at an
airport can reduce the turn round time of the aircraft, thereby increasing its utilisation. What is not stressed
in the chapter is the affect the fast throughput can have on dependability. This is best thought of the other
way round, ‘how is it possible to be on time when the speed of internal throughput within an operation is
slow?’ When materials, or information, or customers ‘hangs around’ in a system for long periods (slow
throughput speed) there is more chance of them getting lost or damaged with a knock-on effect on
dependability. Honda works its ways through suppliers in providing the spare parts on time and
maintaining an internal customer design.

Cost

One major operations objective, especially where companies compete with prices is ‘cost’. Low price is a
universal attractive objective to customers, which can be achieved by producing goods at lower costs.

Honda, for example, reportedly has reduced the cost of exclusive body shop tooling for new vehicles by some 50
percent. That's a significant amount Honda can put some of that savings into the price it will charge customers, as
well as invest in upgraded materials or added features that will set its vehicles apart from the competition.
Investing in improved systems and processes -- everything from product and process engineering to changes on the
plant floor -- also will help improve the quality of an operation and the vehicles it produces.

The formula of having less costs and better revenue leads to having a greater net worth profit. Honda being a
global enterprise with different regions and different flexible designs for different regions is a costly business , but
dealing in a good way by employing the professional work force and standardizing the operation tools can lead to a
better revenue. Following is the 2009’s review of Honda’s financial report and costs.

Consolidated operating income amounted to JPY 176.9 billion, an increase of 72.7% from the same period last
year, due to decreased selling, general and administrative (SG&A) expenses and R&D expenses and continuing
cost reduction efforts, which more than offset decreased profit from lower revenue and the unfavorable currency
effects by the appreciation of the Japaneseyen.
Consolidated income before income taxes amounted to JPY 171.0 billion, an increase of 97.1% from the same
period last year, and net income attributable to Honda Motor Co., Ltd. amounted to JPY 134.6 billion, an increase
of 565.1% compared to the same period last year.
 3rd 3rd Differenc (%
quarter quarter e change)
ended ended
Yen Dec 31, Dec 31,
(billions) 2008 2009
Net sales and 2,533.2 2,240.7 -292.5 (-11.5)
other
operating
revenue
Operating 102.4 176.9 +74.5 (+72.7)
Income
Income 86.7 171.0 +84.2 (+97.1)
before
income taxes
Equity in 30.7 32.8 +2.0 (+6.5)
income of
affiliates
Net Income 20.2 134.6 +114.3 (+565.1)
attributable
to Honda
Motor Co.,
Ltd.

Conclusion:

In conclusion, Honda tries to achieve unprecedented levels of quality in the products that they deliver to their
customers. They aim for 120% instead of 100% as they don’t want even one customer to receive a defected piece.
Determined to meet or exceed the expectations of customers, Honda is taking new initiatives to reach ever-higher
product quality standards. Honda management has identifi ed the pursuit of ever-higher quality as a top priority for
the entire organization

Resources:

• http://answers.yahoo.com/question/index?qid=20090307190532AAVOoWx
• http://world.honda.com/CSR/html/citizenship/quality/index.html
• http://world.honda.com/CSR/html/2007/quality-safety/quality02/index.html
• http://www.isixsigma.com/forum/showmessage.asp?messageID=110252
• http://www.reliableplant.com/Glossary#T
• www.wikipedia.org/