Honda Motor Company

Honda Motor Company - Honda Motor Company Ltd....

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Honda Motor Company Ltd. International Purchasing Division Questions for Discussion: 1. How does Mr. Honda’s history with suppliers relate to Honda’s current supply management strategy? 2. Why is purchasing so important at Honda? 3. How does purchasing rank in the corporate structure at Honda? 4. How is Honda organized globally? How does this help/hinder the purchasing function at Honda? 5. What are the key elements of Honda’s supplier evaluation policy? How does it differ from others (e.g. the Big Three)? 6. What is Honda’s policy on new product development and supplier involvement? How does it differ from other automotive companies? 7. Does Honda support local sourcing from domestic suppliers? What are the advantages / disadvantages of this approach? 8. Honda’s policy and commit to long-term relationships has been criticized as being “too loyal”, and Honda will go to “ridiculous lengths” to maintain a supplier relationship before severing ties. What do you think about these criticisms? 9. The “keiretsu” system in Japan has been described as having advantages and disadvantages. Does Honda have a keiretsu (answer: no, not really)? What are advantages of a keiretsu? Discuss the case of Nissan: their keiretsu is breaking up under ownership by France’s Renault. What do you think this means for Japanese buyer-supplier relationships in the automotive industry? History of Japanese Exports – Automotive Mr. Obi provided the interviewers with a book that was recently published by the Japanese Automobile Manufacturers Association (JAMA) called “Two Decades. . . “, (attached) which was for publicity purposes. This book was largely published to divert trade issue complaints, but really only states the facts on Japan’s investments in the United States in the automobile industry. The book notes that the commitment to localize production is not limited to assembly factories, but that Japanese auto companies have moved R&D and design facilities to the U.S., and also purchase a significant amount ($22 B ) worth of auto parts from U.S. suppliers. Over the last twenty years, Japanese companies have invested $14 B, and now employ 43,000 US workers directly, plus 300,000 in the dealer networks. Of all the companies, Honda has one of the largest investments ($3B), surpassed only by Toyota’s facility in Kentucky ($3.9 B). However, Toyota has produced the most vehicles (634,374) than any other Japanese manufacturer. Honda’s Export Strategy The fact that Honda is leading the Japanese effort in the U.S. is not surprising. Honda is today the most globalized automobile manufacturer, (although still not the highest sales). In November 1997, the Honda Washington D.C. office released the report “Honda and U.S. – Japan Automotive Trade” (attached), which
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This note was uploaded on 04/21/2011 for the course MGT 01 taught by Professor Gad during the Spring '11 term at Tanta University.

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Honda Motor Company - Honda Motor Company Ltd....

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