Honda Case Study

Honda case study

Honda is one of the world's biggest manufacturers of motor vehicles. It has a world wide market spreading from Asia to North America, Europe and other parts of the world. One of the reasons for Honda current success is that it used Japanese methods to build a proper production system in the UK. Producing a car from thousands of parts is a complex and difficult task. One small change in the production schedule will lead to a disastrous effect on the whole system. Traditionally, the final build at the assembly plant is controlled by what parts are available than what are planned. In Honda case, it organizes a production mechanism based on two philosophies: just in time and lean thinking. The purpose of just in time is to make sure that every part will arrive as scheduled for the assembler in UK. The application of lean thinking is to eliminate unnecessary waste between each step of the production flows. So non value added activities can be pulled out of the production system.

In order to make these two methods work effectively, Honda uses several principles. The first principle is five months notice in advance to the suppliers about the kind of material and exact time of delivery. There is one condition that you cannot change your intention under any circumstances. Five months 'notice is long enough for any supplier to plan the production schedule and to deliver parts just in time when the build day comes. One example is the arrival of the engines and some other parts from the parent factory in Japan. Although it takes several weeks to ship these parts from Japan to UK, the five month lead time gives a plenty of notice for them to arrive just in time at the assembler in Swindon.

The second principle is to build a car in batches of 30 at a time. To implement this principle, Honda uses a special technique: standard pallets. Parts are delivered to the production lines in the quantity of 30 at a time. This creates a rhythm production flow as empty pallets are replaced by fresh pallets which are exactly the needed ones for the next batch. However, there is a problem with this rule due to paint defect because paint