Implementing International Supply Chain Management at Honda

Running head: SUPPLY CHAIN
Supply Chain
Name of the student
Name of the university
Author Note:

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Table of Contents
Introduction......................................................................................................................................4
Global Procurement Change............................................................................................................4
Figure No 1: Supply Chain of Honda..........................................................................................5
Selection of International Suppliers.................................................................................................5
Figure No 2: Supplier Selection Process of Honda.....................................................................7
Supplier Management and Development.........................................................................................7
Figure No 3: Purchasing Code of Conduct of Honda..................................................................8
Tools for International Sourcing......................................................................................................9
Buying from Global Suppliers.......................................................................................................13
Management of Global Networking..............................................................................................13
Technology and Knowledge Transfer...........................................................................................14
Absorptive Capacity of Honda......................................................................................................15
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
Appendices....................................................................................................................................20
Appendix 1.................................................................................................................................20
Figure No 4: Purchasing System of Honda...............................................................................20
Appendix 2.....................................................................................................................................21

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Figure No 5: Shared Responsibility and Complex Challenge...................................................21
Appendix 3.....................................................................................................................................22
Figure No 6: History of Honda Global Operation.....................................................................22

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Introduction
The following report is based on Honda Motor Corporations which is a Japanese public
multinational organization. The organization is mainly known for the manufacture of
automobiles, motorcycles as well as heavy range power equipment. The report is based on a
logical understanding on the ways to implement the recommendations regarding International
Supply Chain Management of the organization. It has also been suggested to search for opening
up new facilities in Europe and launch new models in India and some other developing
economies that has been slowly becoming one of the largest hubs of automobile sales for the
company.
Global Procurement Change
The following part of the report will address the different kinds of the recommendations
made in the analysis of the supply chain of Honda. The way by which the raw materials are
acquired and the products and the services are procured by executing the operations of an
organization can be done either in-house or be outsourced. The changes can be addressed in a
proper manner. The change will be brought in to expand and internationalize the company. The
following part details out all the important changes that the management of the company needs
to undergo in order to ensure that they achieve the recommendations as made in the analysis of
the supply chain management. The process by which the management of Honda procures the
different kinds of the raw materials and other items from the suppliers can be termed as
procurement (global.honda 2019). The management of the Japanese company can easily be
outsourced or completed within the production unit. Such a function helps in the growth and
expansion of the business organization.

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Figure No 1: Supply Chain of Honda
Source: (global.honda 2019)
Selection of International Suppliers
The identification and selection of the right suppliers in the automobile industry is
extremely important for the choice of the right suppliers. The absence of a proper supplier can
lead to the decline of the quality and revenue of the organization. The rising adoption rate of car
amongst the individuals has forced Honda to raise its production capacity to meet the demand of
the car makers of its different plants across the globe (global.honda 2019). In this particular
scenario supplier selection becomes one of the main criterions for most of the stakeholders of
Honda Automobiles. The management of Honda Automobiles is renowned for its supplier
selection process as it engages the renowned solution providers that help to choose the best
suppliers for the business (global.honda 2019). This process chosen by the management of the
business thus significantly reduces the production costs and improves the production capacity of
Honda Automobiles. The management of the company always wants to identify new suppliers in

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order to gain a cost advantage over other suppliers in the market. Honda rewards the deal to that
particular supplier who offers a standard price and offers top notch quality products for the
production process. Apart from this the most important transformation of the Honda company is
the change in its marketing strategy. The shift of the management of the company from the
traditional advertisement perspective and the use of the most modern forms of advertisement
campaigns is really one of the most important for the business organization (global.honda 2019).
The present criterion for the selection of the suppliers is mostly oriented by the capacity of the
suppliers. The selection process of the suppliers for Honda is so effective and tough in nature
that it brings out the best in improving the supply chain of the business organization. The
suppliers are generally expected to develop a proper strategic pool amongst the existing set of
supply pool of the organization.
Figure No 2: Supplier Selection Process of Honda
Source: (Govindan Soleimani and Kannan 2015)