Research Paper On Honda Motor Company And Its Supply Chain Management Activities
Introduction
The organization began in 1948, Soichiro Honda the originator of the organization exploited the way that there was an extremely huge hole in the Japanese market particularly delayed consequences of World War II, it was very costly and difficult for Japanese residents to buy fuel and consequently Honda, used his assembling offices and innovation to append a motor to a bike making transportation and development of individuals very simple in Japan. The organization by the 1960's turned into a mammoth in cruiser showcase; as of now the organization has more than 180,000 workers all inclusive. The Honda Motor Company is currently the second largest automobile manufacturer in Japan after overtaking Nissan back in early 2000 and later overtaking Chrysler to become the world’s 6th largest Automobile manufacturer. The company is renowned to be an excellent manufacturer of automobiles, trucks and motorcycles and its headquarters is situated in Tokyo. Additionally, the company also manufactures a lot of equipment including water craft generators, boat and ship engines and garden equipment. Honda has a wide variety of cars under its wing with the most prestigious/luxurious automobile brand being Acura which is very famous in North America. Honda's top administration arrangement is to work with a short inventory network structure, this current Honda's items can move quicker, effectively and at low expenses over the store network what's more, the organization can likewise make an incentive for its clients. It is this methodology and Supply Chain Management direction that has empowered the organization which has its essence in pretty much every nation, to be among the main 6 biggest vehicle makers with incomes of over $ 100 billion in the last budgetary year. Since its commencement, thinking back to the 1940's; Honda has built up a solid corporate and business structure culture. It is this solid culture, that has likewise supported the organization's inventory network the executives system by empowering the organization connect with the best production network accomplices who have empowered the organization accomplish its development aspirations. The solid monetary position Honda as an association is a key quality that has helped the organization to encourage its situation in the business; the organization has put supports accessible to it in innovative work and utilized the assets to grow low fuel expending motors which have gotten famous with buyers on the planet.
Organization Structure
The Honda Co. Ltd. ’s. corporate central station are situated in Tokyo Japan the base camp fills in as the vital and managerial leader of the organization. It is consequently their obligation to arrange all exercises of the organization and plan basic business structures, for example, Supply Chain Management Activities. The whole SCM exercises starting from assembling to the possible deals is the obligation of uniquely relegated senior supervisors who are arranged in the corporate home office. The top administration and the board puts forth the organization's arrangements and impart these messages to bring down degrees of the executives, for example, Honda's territorial workplaces in different practical zones. With the top generally level of chiefs situated in Tokyo Japan, they are given the duty to ensure that lower levels of troughs that are situated in territorial focuses in North America, India, China, Canada and United Kingdom work inside the set approaches of the association. This type of organizational structure where communication and procedures emanate from the top has enabled Honda as an organization move in the same direction by improving coordination because lower levels of management are only expected to act by the book and this fact reduces levels of confusion within the organization. With the organizational structure being streamlined with clear levels of authority Honda Company has been able to improve its way of doing business due to the fact that the entire organization is moving in the same direction harmoniously.
Strategic Orientation of Honda
Mission: Honda was established on a strategic giving moderate and eco-friendly transport. The organization has now ventured up its business activities and intends to give the best high caliber and most moderate vehicle frameworks and motors. Vision: Honda's vision is to develop and turn into the most dependable and the best vehicle fabricating mammoth all inclusive.
Strategic Objectives
Honda began from a modest start back in Japan, their assembling system prompted Honda acknowledging economies of scale in this manner receiving a minimal effort estimating model regardless of the way that the organization created top notch items. This methodology has empowered the organization understand a profoundly aggressive cost which is liable for bringing the organization into the worldwide market particularly the U. S. A. Honda henceforth means to use all roads particularly SCM to guarantee that the organization can save money on costs without bargaining nature of their item that way the organization will have the option to continue a minimal effort valuing model.
Supply chain Management Strategies (SCM) in Honda
Honda's Supply Chain Management procedure has constrained the organization to move its Asian manufacturing plants to American production lines and this has empowered the organization abbreviate its inventory network to build productivity. Honda as an association emphatically advocates for restriction, this empowers the association fabricate autos and different items in the area where they sell and moreover source items from similar areas by framing associations with nearby providers. Moreover, it has gotten simpler for the organization to execute Just in Time (JIT) stock frameworks, thusly the organization orders crude materials suitably and keeps away from wastage that comes to fruition because of holding a great deal of stock. So as to oversee and connect the stockpile of crude materials together with request of completed products, the organization has set up Electronic Data Interchange (EDI) along these lines the association has had the option to adequately oversee assets of the association all the more successfully. The presentation of EDI has empowered the association enhance correspondence and constructed a production network coordination framework. 'Honda surpassed Chrysler because of the way that Honda framed associations with providers who had a background marked by great relations with the organization and the capacity to convey top notch items while simultaneously meeting cost targets'.
Successes of Honda
Honda is consistently getting one of the most regarded car organizations and the current worldwide achievement of the organization has pushed top administration and the whole association to take care of in more exertion to guarantee that the association turns into a top car organization later on by making progressively upper hand inside the business. The organization is at present the sixth biggest car maker having overwhelmed Nissan and Chrysler. It is streamlining all activities particularly by further shortening its inventory network so an incentive through saving money on costs and conveying greater quality to purchasers can be figured it out. Also the top administration utilized a cautious methodology that has enabled the organization to gain from botches through perception thus the association has become a cautious organizer and executer of inventory network exercises. Honda has had the option to deliberately design its activities and advance itself as a decent organization. Besides, Honda is one of the most dependable organizations having applied green standards in their store network so as to lessen significant levels of contamination and ecological devastation that has been a principle normal for the vehicle business. The organization SCM system is one of the best components of the association that has empowered the organization rise up out of being a nearby Japanese organization to a global goliath. Asian nations particularly Japan is outstanding for the elevated level of innovation.
Threat of new entrants
Capital and technology is a Barrier that blocks new entrants from entering the automobile industry making the business more suitable for companies like Honda. The amount of capital and technology that Honda has gained over the years is not easy to come by and this fact means that Honda faces little threats from new entrants. Honda’s low fuel consumption technology and ecofriendly business structure including supply chain management properties make it easy for the company to succeed in the industry. Regulatory authorities in this age prevent new entrants from entering into their markets especially if the companies does not produce ecofriendly automobiles and engines but Honda is one of the leading companies when it comes to making high performance but low fuel consumption vehicle models. This fact means that threat from entrants facing Honda is moderately low.
The bargaining power of suppliers
Suppliers supplying production inputs including raw material can limit the profitability and feasibility of an industry, the level of profits that automobile manufacturers enjoy often depend on how they source production inputs from suppliers. The Automobile industry is an industry that is flooded by many vendors hence increasing the bargaining power of automobile manufacturers forcing suppliers to sell inputs at lower prices. The concentration and number of suppliers in this industry is high and the fact that the Honda can integrate backward and manufacture some of their raw materials lowers the bargaining power of suppliers. This fact hence enables companies like Honda to operate at a low cost model and sells automobiles to the market at low prices.
Conclusion
Honda has gotten one of the world's biggest vehicle makes in light of the fact that the whole association has committed its endeavors and assets so as to guarantee that inventory network exercises of the association are streamlined with the general procedures of the association. The organizations unrivaled inventory the board channels and clear correspondence framework has cultivated great connection among Honda and its production network accomplices empowering the organization become increasingly fruitful. The presentation of electronic record keeping and requesting innovations, for example, Electronic Data Interchange (EDI) is so urgent in overseeing inventory network connections and will thus push associations to ceaselessly assess the whole production network and dispose of wasteful aspects inside the store network.
