Honda Operational Managment

8/6/2019 Honda Operational Managment

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Presented to

Sir Sajjad Muhcin



Presented by

Yasir Sultan M09MBA032

Faiq Naeem M09MBA063

Muhammad Fareed Azher M09MBA070

Anas Abdullah Sajid BIN Basheer M09MBA075





� Japanese Multinational Corporation.

� Primarily Known as a manufacturer of Automobilesand Motorcycles.

� The world largest Motorcycle manufacturer.

� The 4th largest Automobile manufacturer in USA

and 6th largest Manufacturer in the WORLD.

� Spend 5% of its Revenue on R&D� Headquarter is situated in Minato, Tokyo

� Listed in Tokyo Stock Exchange & New york stock

Exchange.

Introduction



History

� Founded BY Mr.Soichiro Honda on24,September 1948 in Japan

� Due to a gasoline shortage, to develop and produce small 2-cycle

motorbike engines in 1957.

� First car(S500)was Build in October 1963



Products





��Joint venture between Honda Motor Company Limited

Japan, and the Atlas Group of Companies, Pakistan.

� The company was incorporated on November , 1992.

� Listed on Karachi, Lahore and Islamabad Stock Exchanges.� First car rolled off the assembly line on May 26, 1994.

�.July 14, 1994, car bookings started at six dealerships in

Karachi, Lahore, and Islamabad.



Products

Civic

City



OPERATIONS STRATEGY

Product Plans

� Assemble to order strategy

Competitive Priorities� Low cost

� Consistent quality

� On time delivery

Process Design

� Labour + Moderate technological intensive.



Material Management� Formal Supplier Relations.

Production Plans� For 1 month.

Scheduling

� Planned for ahead.

Capacity� Lower utilization.

OPERATIONS STRATEGY



�The factory is situated near MangaMandi at a distance of

43 km from Lahore.

� A network of 20 dealers. Out of these,14 dealers are located

within a radius of 400 km from the factory.

� Highly skilled labour is available, large number of industrial

units are operating here.

Location



�Infrastructure is available, Is rapidly becoming an industrial

zone.

� Transpotation cost is High, 62% of the parts used in Honda

Cars are imported.

Location



Plant capacity

� Currently plant capacity is 83 car per day and yearly

Production is 30000� In 2010, only 11890 cars are produced . In 2007 32000

cars are produced.

Reasons

1. Economic instability

2. Decrease in the purchasing power of customers



Currently plant capacity is 83 car per day and yearly Production is 30000

In 2010, only 11890 cars are produced . In 2007 32000 cars are produced.Reasons

1. Economic instability

2. Decrease in the purchasing power of customers



Faiq Naeem

M09MBA063



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Forecasting Techniques

� Sales Force Estimate

� Executive opinion

� Naive Method



Product demand on the basis of

several f actors

� The trend in the economy

� Annual budget of the country

� The policies of government

� The inflation rate

� The policies of large companies regarding the

provision of transport facility to their executives.

� The cotton crop ( to some extent )

� The past sales data



Process Design

1. Vendor Section

2. Engine Section

3. Welding Section

4. Maintenance Section

5. Paint

6. Vehicle Quality Control



Machinery

� Boilers

� Compressors

� Water treatment plant� Ovens (for backing the body of cars)

� Spot welding guns.

� Two-post lifts� G-SWAT/ B-S / S Side

� Slip / Shower testers



Quality Control

� When purchase material arrives, thorough checking of that materialis made. If any deficiency is found then it is reported.

� Similarly, the finished product is tested before delivering it to thecustomers in order to assure the quality standards.

� HACPL is successfully using "Kaizen" system for quality control.Employees are encouraged to improve quality and reduce cost. Every

month, about 20-25 prizes are given on showing good performance.

� HACPL is ISO 9002 certified. It was the winner of "Best QualityAward for Asia" in 1996,1997 & 1998.

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R&D Department

� Unfortunately, there is no research and developmentdepartment in HACPL.

� This function is performed by Honda Motor Company, Japan.All major changes in models of Honda cars are introducedthere.

� Employees of HACPL are sent to Japan, where they are trainedaccording to new conditions. Later on, these changes areintroduced in the models offered in Pakistan.

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Yasir Sultan

M09MBA032





Achievement of Objectives Through

OperationsThe production department of HACPL is playing a vital role in achieving the

overall objectives of the company through efficient utilization of resources.

HACPL is achieving production efficiency through:

� Evaluation & improvement of quality control.� Training of production employees.

� Modernization of plant and machinery

Similarly cost minimization objective is being achieved through:

� Deletion programe

� Avoiding poor quality products, which are a loss for the company. Asmentioned earlier, HACPL is achieving excellent quality levels throughgiving training to personal plus proper use of technology.

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Inventory

There are three types of inventory:� Raw material inventory�W.I.P. inventory� Finished goods inventory.

The basic objective of any firm is to minimize total inventory cost(ordering & carrying). The same is the case in Honda AtlasCars (Pakistan) Limited. In HACPL, the whole inventory systemis computerized. Following are the advantages of thiscomputerized system.

� Updating records.� Providing management reports.� Automating the recording process.� Re-computing decision parameters.

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Safety Stock

HACPL maintains a safety stock of 2 to 3 months. The reason for

maintaining a safety stock is as follow:

� To protect against shortage that occur due to suppliers.

� To protect smooth and continuous operations.

In HACPL, the inventory is held in the following forms:-

� Inventory of imported parts.

� Inventory of local parts.

In order to avoid stock out, they have more safety stock of

imported parts as compared to that of local parts.

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Fareed Azhar

M09MBA070



AGGREGATE PLANNING

Aggregate planning is a statement of production rates,

work force level and inventory holding based on estimates

of customer requirements and capacity limitation.

Production Plans

� The production plans are prepared for three

months based on the customers orders and

uncertainty in demand,

� Work F orce Level



A AGGREGATE PLANNING (CONT)

� In HACPL, work force schedules are arranged on the basis

of production plan. If demand is high, then extra workers

can be hired on contract basis or the existing permanent

employees can be employed in extra work to meet the

targets.

�When I visited the factory of HACPL, the daily production

was 15 cars. For this reason, there was a single shift except

for maintenance department



Purchasing

� Purchasing in the management of the acquisition process

includes deciding which supplies to use, negotiating

contract and deciding whether to buy locally or centrally.

� Purchasing must satisfy the firms supply needs and

support the firms production capabilities.

� HACPL imports materials from the parent Honda Motor

Co, Japan in the CKD (complete Knocked down)) form

and also from the Local Vendors.

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Distributors

� To store the finished products, (Honda Civic & Honda City),

HACPL uses both FORWARD BACKWARD PLACEMENT.

� HACPL has a country-wise network of Sales Dealers who are

actively engaged in promoting the image of HACPL and its cars.

� 30 2S Dealers

� 20 3S Dealers

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TOTAL Q UALITYMANAGEMENT

T.Q.M. stresses three principles:

� Customer Satisfaction

� Employee Involvement

� Continuous Improvement



SUGGESTION

� Efforts should be made to reduce the cost of Honda cars.

� There should be more coordination between HACPL and its

suppliers.

� A low-priced model should be introduced to capture the marketshare of SUZUKI.

� Deletion program should be implemented rapidly.



�Although HACPL has taken some steps for environmental protection,

more efforts should be made in this regard.

�The dealership network should be widened.

�Employees should be encouraged to give suggestions.

�Some sort of research should be done at HACPL.

�Efforts should be made for better utilization of capacity.

SUGGESTIONS





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Honda Operational Managment