Understanding Operation, Logistics and Supply Chain Management [Honda UK Manufacturing]

This article discusses the operation and supply chain management of Honda UK Manufacturing in respect to two chosen topics - Managing Quality and Managing People in Operation and Supply Chains. It also includes potential areas of improvement and theories and techniques that can be applied to these topics.

Running head: OPERATION AND SUPPLY CHAIN MANAGEMENT
Understanding Operation, Logistics and Supply Chain Management
[Honda UK Manufacturing]
Name of the student:
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1OPERATION AND SUPPLY CHAIN MANAGEMENT
Formative Assessment
The selected business for this assessment is “Honda UK Manufacturing”. It is a
subsidiary business of Honda Motor Co. Ltd. The company has its existence in the United
Kingdom since 1960s (Hondamanufacturing.co.uk 2019). However, it actually began
manufacturing the cars in 1989 at its Swindon plant (Hondamanufacturing.co.uk 2019). Honda
acquired this plant in 1985 (Hondamanufacturing.co.uk 2019). The total number of employees at
the Swindon plant is 3,400 approximately (Hondamanufacturing.co.uk 2019). The annual unit
production of cars at the Swindon plant stood at 230, 423 cars in 2008, which dropped to 134,
146 units in 2016 (Hondamanufacturing.co.uk 2019). In February 2019 Honda announced the
closure of its Swindon plant in 2021 (Hondamanufacturing.co.uk 2019). This will result in a loss
of about 3,500 jobs (Hondamanufacturing.co.uk 2019).
The two selected areas of Operation and Supply Chain Management are “Managing
Quality” and “Managing People in Operation and Supply Chains”. Managing quality is essential
to remain competitive in an ever-increasing market competition in the automotive industry. This
is evidenced in a fact that UK-based car manufacturers are no longer competitive and just
playing a catch-up with the European brands. Before 1978, the UK-based car manufacturers had
the tax benefits with them (Ifs.org.uk 2019). It helped them perform better than the European
brands. However, after Margaret Thatcher abolished tax concession in 1978, the entire picture
got changed (Ifs.org.uk 2019).
Managing people in operation and supply chains is very challenging. Employee
retention is a growing issue (Jefri and Daud 2016). The consequence of incrementing employee

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turnover is even severe and appears largely irreversible. On the other hand, fresh recruitment of
employees faces two challenges. A weak education system is one of those. The other being the
cost of replacing an existing employee. According to Auto Dealer Monthly, the total cost of
replacing a cashier, which is a lower-level employee can be from tens of thousands of dollars to
2.0x the annual employee salary (HuffPost 2019). Definitely, the cost of replacing employees at
higher positions such as skilled employees, mechanics and managers etc. will be even bigger
than this. The Auto Dealer Monthly provides a strategy to overcome this challenge. It urges
businesses to closely review turnover metrics. This will help to identify patterns and turnover
causes. Once identified these can be strategically reversed.
Different theories and techniques will be applied to two different topics. Quality can be
managed by applying the Total Quality Management (TQM) principle to the Operation and
Supply Chain Management. TQM encourages all from management to workers and even
customers to contribute in managing the quality issues (Bolatan et al. 2016). Maslow’s
Hierarchy of Needs will be applied to the organisations’ operations to manage the people. The
theory has five different levels, which once satisfied by the management will supposedly yield
the expected outcomes of managing the people. These levels are Physiological Needs, Safety
Needs, Social Needs, Esteem Needs and Self-actualisation (Lee and Hanna 2015). Work related
injuries is one of the critical metrics for the automotive industry (López-Arquillos and Rubio-
Romero 2016). Providing safety to employees is essentially a part of Maslow’s Hierarchy of
Needs.
Potential areas of improvement in respect to managing quality would be Customer
Satisfaction. In regards to managing the people the areas of improvement will include employee
satisfaction.

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References
Bolatan, G.I.S., Gozlu, S., Alpkan, L. and Zaim, S., 2016. The impact of technology transfer
performance on total quality management and quality performance. Procedia-Social and
Behavioral Sciences, 235, pp.746-755.
Hondamanufacturing.co.uk 2019. [online] Hondamanufacturing.co.uk. Available at:
https://www.hondamanufacturing.co.uk/ [Accessed 11 Mar. 2019].
HuffPost 2019. How Much Does Employee Turnover Really Cost?. [online] HuffPost. Available
at: https://www.huffingtonpost.com/entry/how-much-does-employee-turnover-really-
cost_us_587fbaf9e4b0474ad4874fb7 [Accessed 12 Mar. 2019].
Ifs.org.uk 2019. Redistribution, work incentives and thirty years of UK tax and benefit reform.
[online] Ifs.org.uk. Available at: https://www.ifs.org.uk/publications/5367# [Accessed 12 Mar.
2019].
Jefri, N.A.M. and Daud, N., 2016. Exploring employee retention among Gen Y in oil and gas
industry in Malaysia. International Academic Research Journal of Business and Technology 2
(2), pp.152-156.
Lee, J.M. and Hanna, S.D., 2015. Savings goals and saving behavior from a perspective of
Maslow's hierarchy of needs. Journal of Financial Counseling and Planning, 26(2), pp.129-147.
López-Arquillos, A. and Rubio-Romero, J.C., 2016. Analysis of workplace accidents in
automotive repair workshops in Spain. Safety and health at work, 7(3), pp.231-236.

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Summative Assessment
Operations management is an administration of business practices to attain the highest
possible level of efficiency for an organisation. Operations management helps convert materials
and labours into goods and services. It also ensure that these conversions are done as efficiently
as possible to boost organisational profitability. Operations management also provides an
understanding of the practices and principles of operations management. Operations
management is also about understanding a range of problems and challenges being faced by the
business. Operations management encourages to identify and utilise range of tools and
techniques to deal with business issues and challenges (Slack and Brandon-Jones 2018). Supply
chain management is about managing the supply chain activities to maximise customer value
and attain competitive advantage. Moreover, it guides theoretically how a sustainable
competitive advantage can be attained. It provides a collection of the principles and practices,
which could be applied to its associated operations like sourcing, product development,
production and logistics. The supply chain is broadly based on two core ideas. Every product that
reaches to customers is a sign of collective efforts of different businesses who were engaged with
different purposes in the making of this product. While supply chains have existed for a long
time, many companies have not paid attention to it. Very few businesses have understood it. Out
of those very few businesses only few have managed it efficiently (Fredendall and Hill 2016).
The main purpose of this essay it to understand the operation and supply chain management of
Honda UK in respect to two chosen topics.
The chosen business for this essay is Honda UK Manufacturing. The Company
established its UK Manufacturing in 1985. In 1986, they began their operations in the UK. At

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this point in time, the company was only centered to pre-delivery inspection of Honda models,
which were imported into the United Kingdom. In 1989, Honda opened its first engine plant in
the UK. It was the time they began producing the cars. The construction of Car Plant 1 begins in
1992. They began producing the Honda Accord cars since then. The year 2001 witnessed the
opening of Car Plant 2. It helped the production capacity to increase to 250,000 cars per year.
2002 was a historical year for Honda UK as cars were exported to North America for the very
first time (Hondamanufacturing.co.uk 2019). The first topic is ‘Managing Quality’. The topic
addresses the importance of managing quality in operation and supply chain management. Both
operation and supply chain management are homes to range of different activities. When all
these activities are managed appropriately these ultimately impact upon the efficiency of
operations and supply chain. Quality can be measured by using range of metrics. In this essay,
the management of quality will be analysed in context to the Honda UK Company. The chosen
metric is Customer Satisfaction. The second topic is ‘Managing people in operation and supply
chains ’. Employee management is a growing issue at the global level. This is troubled from a
range of organisational factors like incrementing employee turnover and low employee retention
rate. In this essay, Honda UK will be judged for its employee satisfaction level.
‘Managing Quality’ is the first topic. The competition between businesses was there in
past, it has now increased to a much higher level. The fact is evidenced in annual reports, which
keep changing for the organisations every single quarter. Very few companies have been able to
maintain more or less the similar performance over number of quarters of a fiscal year or two.
Even those few companies are in regular process to attain business sustainability. They can never
sit idle and let the things go as it is at the current. Indeed, they fear of losing their market values,
market shares and competency to their competitors (Lukichev and Romanovich 2016). These are

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some of the reasons why quality management in respect to the products and services have drawn
an increased attention of the world businesses. Total Quality Management (TQM) addresses the
very similar concern as stated above. TQM can be defined as a philosophy, management tool and
set of principles that involve each stakeholder to the quality improvement process and provide
solution to every business problem. TQM believed to have so many key aspects that make it very
important for the organisations. These are continuous improvement, reduce waste, take
quantitative measures to analyse and identify deviations from quality, and doing it in the very
first attempt (Chen 2016). As observed by Pannirselvam (2018), companies who adopt TQM do
not just make quality products but are also able to make it as their lasting reputation. Ajayi and
Osunsanmi (2018) argues that firms adopting the TQM can also fail in delivering quality
products and services. Alshatnawi and Ghani (2018) support the fact stated by Ajayi and
Osunsanmi (2018) by stating that many companies struggle to implement TQM appropriately.
They either do not have a clear vision or they lack skills to apply this to practice. It also gets
hampered from lack of resources and difficulties of deploying each one of stakeholders to the
implementation process. According to Sohel-Uz-Zaman and Anjalin (2016), change in leadership
which is integral to contemporary organisations does also affect the TQM programmes
implementation.
Honda’s TQM hurdles is a good point to discuss about. Whenever an issue is suspected
with a product and requires market action, Honda reports it to government authorities following
the country’s regulations. Dealers report it to the government by telephone and direct mail.
Associated information is also provided on the official website of Honda. The chairperson of the
Company in association with the Company’s overseas members including experts from
department dealing with quality issues make objective decisions. Moreover, Honda improves its

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products and service quality by working on customers’ feedbacks. The Company listen to the
complaints of each one of its customers (Macsphere.mcmaster.ca 2019). By reporting an issue to
the government Honda maintains its business ethics. By listening to customers’ complaints
Honda shows and proves its responsibility towards customers. However, listening to complaints
does not mean that Honda maintains a high standard customer service. This would lot depend on
repeated calls for similar complaints or the Honda cars voted as most reliable of all. Notably,
only two of the Honda brands could make it to the most reliable cars’ list. These are Honda Civic
and Honda Accord (Consumer Reports 2019). It shows that though Honda was more than
responsible while taking the customers’ complaints, many of these problems appears to have
remained unaddressed. Instead, Honda is losing its reliability with time as evidenced in
Consumer Reports. The report suggests Honda Odyssey while being praised for its fuel economy
and refinement sits at the bottom in terms of reliability (Automotive News 2019).
The second topic is ‘Managing people in operation and supply chains’. As the name of
the topic suggests it is related with managing the people, which are the employees who work
under operation and supply chains. Managing people has become challenging in the era of
globalisation. There are many reasons for it. Firstly, people are not just limited to one company.
Rather, they have multiple number of companies working on similar products and services.
Secondly, there are online learning resources in the form of educative and interactive videos, and
mobile-based apps that can be used for personal skills development. These findings conclude that
employee retention is more challenging now.
On looking it from theoretical perspective such as under the Maslow’s Hierarchy of
Needs, employee retention still appears to be a challenge to global companies. The theory
describes five different types of needs that employees expect from their employers (Lee and

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Hanna 2015). Physiological needs represent the lower most level of the theory. This is related
with basic needs such as foods, water and other things. To survive on this level employers need
to offer salary, which is up to the industry standard and provides stable employment. In context
to Security Needs, employers will need to ensure that they provide pension, benefits, fair work
practices and safe work environment. Belongingness says that social acceptance issues like
cooperation on the job or friendship should be addressed. Esteem needs is related with respect
and recognition, and positive self-image such as job titles, prestigious job assignments and nice
work spaces. Self-Actualisation Needs is to find relieve from issues like challenging work,
workplace autonomy and the subject matter expert status on the specific job. The Maslow’s
Hierarchy of Needs as described above suggests when these findings are satisfied employee
satisfaction level will improve and so employee retention. However, the theory has faced
criticisms. As observed by Shih et al. (2019), Maslow’s Hierarchy of Needs was helpful to an
extent in showing that traditional management, the hierarchical bureaucracy was unlikely to meet
the various needs such as psychological needs of employees. However, it offered a not so
feasible and an unrealistic route to fulfill those needs. The bottom line is not all employees quit
their jobs just because they have not got their needs like these fulfilled. Not all employees have
the capability or want to become the leader.
According to Maslow’s theory, Honda should provide good working condition to its
employees. Honda has been able to provide a satisfactory working condition to its employees.
Maslow’s theory is believed to be good in improving managers’ understanding of employees and
their inter work-relationships. Honda enjoys good working relationship between its managers
and workers; however, at times it becomes difficult for workers to understand a few of the
management’s decisions. Maslow’s says that if all its different levels are met in an organisation,

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employee satisfaction level will be high. Honda has many employees not satisfied with their
jobs. This is evidenced in a fact that the turnover rate for motor trade staffs is double that of
many industries in the United Kingdom (ChoiceQuote 2019). Turnover rate in ‘Automotive
manufacturing’ is up by 5.3% (Smmt.co.uk 2019). These stats conclude that employee
satisfaction level in automotive industry is decreasing and so in Honda UK Manufacturing.
‘Triple Bottom Line (TBL)’ is about meeting the social and financial needs and
expectations of stakeholders. It is also about being responsible towards the community and
environment where the businesses operate. It is also about earning financial benefits constantly.
On the contrary, Britain’s automotive industry is constantly failing to meet the EU air pollution
standards. The industry that contributed over £20.2 billion in added value in the year 2017 looks
to be in big trouble (www.statista.com 2019). The industry also employs over 800,000 people
(www.statista.com 2019). The policy makers, therefore, want the UK car industry to be a part of
its clean growth future (Open Access Government 2019).
Honda being a globally known name has bigger responsibility in this regard. The
Company’s “2030 Vision” looks good as it is dedicated to enable people everywhere in the
world to be able to improve their living standard (Global.honda 2019). Honda is facing various
social issues such as human rights issues, refugee and poverty problems, climate change,
occupational health and safety, energy problems, and the ageing society (Global.honda 2019). To
address all these issues and overcome these as well Honda has planned a roadmap for 2030.
Honda has now geared to add new values to the business. The strategy is divided into three
distinct forms such as Current, Transformation and New (Global.honda 2019). In the
sustainability management structure, there is on top, the Board of Directors. They are followed
by Executive Council. It is followed by ‘Sustainability Strategy Committee’ especially being

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designed and formed to address and design sustainability strategies. ‘Business and Functional
Operations’ at all the subsidiaries then follows it (Global.honda 2019). It looks like a good
structure provided that communication between each of the levels is faster and that adequate
resources are available to address the diverse sustainability issues. Indeed, Honda has understood
the urgency of an effective communication with all its stakeholders. Hence, Honda is in
continuous dialogue with all its global stakeholders. Additionally, Honda considers the opinions
from NGOs and leading ESG rating agencies in making modification to its ‘Materiality Matrix’.
‘Materiality Matrix’ is used to identify the sustainability issues to be addressed (Global.honda
2019).
On a recommending note, Honda can be suggested to produce more number of electric
cars. EVs, PHEVs and HEVs are the three options in electric cars. Unlike EVs and PHEVs,
HEVs can run both on petroleum and electricity. Additionally, HEVs can be run both on
Petroleum and Electricity. This means these cars can be used for longer travel distance. In a
scenario when the United Kingdom will have the diesel dead and so the trades in trouble, the
automotive industry will have no more option than to switch to electric cars. A new analysis
from the FIA foundation has revealed that nearly every diesel car on the EU roads is breaching
the legal and allowed air pollution limits (Ft.com 2019). This also includes the new models of
cars released in the year 2017. These cars were also being found to have emitted four times more
than the EU standard for nitrogen oxides (NOx), which is 0.08 mg (Ft.com 2019). It shows that
the legal actions are becoming stricter on air pollution by cars. Hence, it is better to switch to
Electric Cars than to wait and get the business hampered from hard legal actions.
On a concluding note, this can be said that Honda has plans to address to sustainability
challenges by 2030. However, there is a need to make quick decisions on part of switching to

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Electric Cars as advised in the recommendation section. In regards to Electric Cars, Honda has
three options in form of HEVs, PHEVs and EVs. HEVs is compatible both with petroleum and
electric. This is more suitable for longer distance. The ‘Sustainability Strategy Committee’ of
Honda needs to make quick decisions in the mentioned regard and start deploying technologies
to be able to produce electric cars.

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References
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quality management (TQM) in contracting organisations. Journal of Construction Project
Management and Innovation, 8(1), pp.1753-1766.
Alshatnawi, H.A.M. and Ghani, M.B.A., 2018. The effect and the Challenges of Implementing
Total Quality Management on Performance of Higher Education Institutions. International
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Automotive News 2019. Honda appears to weather quality issues. [online] Automotive News.
Available at: https://www.autonews.com/regulation-safety/honda-appears-weather-quality-issues
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Chen, Y.T., 2016. Lean TQM—innovating TQM to TVM (Total Value Management). Journal
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13OPERATION AND SUPPLY CHAIN MANAGEMENT
Ft.com 2019. All new diesel cars fail EU emissions standards, says study | Financial Times.
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4acfcfb08c11 [Accessed 13 Mar. 2019].
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