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Angeerjeet Goswami - 09
Ankit Maheshwari - 10
Rajat Anand - 52
Raveesh Verma - 54
Richa Bidasaria - 56
Rishi Rathi - 57
The Automotive Industry
The Automotive industry is
one of the largest industries
in the United States
New and used automotive
sales and repairs generates
over $200 billion dollars of the GDP each year.
New car and light weight truck sales generated
$699 billion dollars in revenue in 2003.
Trends in the Industry
Parts Supplier
IT advancements
3rdwave distribution software by Blinco
Systems
Assures parts quality, controls availability,
guarantees delivery, provides consistent
materials pricing
External factors
Increasing oil prices effect transportation
costs for all markets
Competitive Characteristics
Cost
Suppliers are given target costs
Cost reductions through own ideas,
technology, improved productivity, along
with joint efforts with Honda in value
engineering, and value analysis
Delivery
Suppliers must use just-in-time production
system
Q.C.D.D.M cont’d
Development
Uniqueness in design and specifications
Helps create identity for Honda
Management
Positive attitude
Measured by Q.C.D.D
Feedback
Grade cards for suppliers
Honda Quality and Efficiency
Quality and Continuous Improvement
Employee Driven “Kaizen”
“Quality Circles”
“Domestic Trouble Reports” (DTRs)
MRP II and Web-based Ordering for
Supplier Base as a whole
Extent of Efficiency in Supply Chain
Honda Trading “Soybean Example”
New Honda Ridgeline Composite Bed/Box
Foreign Automakers Share A
Similar Philosophy
Customer Service is key
Provides more predictable demand
schedule
Allows for a stronger relationship with
Suppliers
Keys to achieving Cost
Effective Customer Service
Monopsonistic Purchasing Power
Strong Financial Health
Able to ask more from Suppliers
Understanding of global Economic
environment
Able To Get More Out of
Suppliers
Toyota- Dedicated Manufacturing
Facilities
Nissan- Supplier Parks
Suppliers willing to do so because of
Foreign Automakers’ Financial Health.
Postponement
Assembly
Main Plant Local Plant
facility
Mexican Suppliers
Forecasting Is Key
The term Toyota uses for their system is “heijunka”. Translated from
Japanese, it means “make flat and level.” In particular, it refers to
eliminating spikes in demand, but also creating operational efficiency
and reducing overall supply chain costs.
Toyota’s lean operation focuses on the idea of buy one, sell one.
Toyota is able to manufacture vehicles in about the same order
customers buy them . This adaptability to demand has given Toyota
the advantage of carrying the least inventory in the field of Japanese
auto manufacturers .
Working with suppliers
This concept is one that Toyota uses internally and it also requires of
its suppliers to improve the overall C2C cycle.