Analyzing Honda Motor's Operational Efficiency: A Case Study Report

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1OPERATIONS OF HONDA MOTORS
Business Understanding Operations of Honda Motors
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2OPERATIONS OF HONDA MOTORS
Table of Contents
Introduction to operation management and logistics.................................................................3
Introduction to the company and the selected topics.................................................................3
Management of quality at Honda and relevant theories and concepts.......................................4
Location and layout and corresponding theories and concepts..................................................5
Triple bottom line.......................................................................................................................6
Recommendation........................................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................7

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Introduction to operation management and logistics
Operation management has been one of the key measures adopted by the organisations for
fostering the growth and success of their business on global level. There are various measures
taken along with operation management process. These measures are management of
logistics and supply chain of the organisation. Managing logistics helps the organisation in
serving their customers on time and with proper cost cutting for lowering the cost of
production. Supply chain management is also used for cutting down the cost of production,
but it is used for gaining better quality of supplies and raw material at lower prices,
facilitating better acquisition of supplies at lower rates (Rezaei et al. 2011). These factors aids
to the process of effective management of the operations, going on in the organisation.
Through effective management of operations, supply chain and logistics of the organisation,
an organisation can bring rise into its turnover and profit rates. This will in turn be a
competitive advantage for the organisation and will help the organisation in performing well
in the national as well as in the international market. In the following description, all the
relative and significant aspects of logistics, operations management and supply chain
management will be discussed in brief, to provide better understanding of these factors.
Introduction to the company and the selected topics
In the following report, the concept of operations management, supply chain management
and logistics have been explained by exemplification of the world’s most popular
manufacturer of Automobiles- The Honda Company. Honda has been one of the top-most
automobile manufacturers of the world and it has been classified under the top eight
automobile manufacturers in the global market (World.honda.com, 2019). The automotive
company is Japan based manufacturer of automobiles and is known as Honda motors
company private limited. The Japanese motor company was found by Soichiro Honda and
Takeo Fujisawa in the year 1946 at Hamamatsu region of Japan.
In the following report, the concepts of supply chain management, operations management
and logistics will be studied and analysed by taking an overview of these processes and
measures in the business organisation of Honda Company. However, explaining all the
relevant concepts and ideas will take more than enough space and time, therefore, only
limited topics will be highlighted in the following report. The first topic selected is the quality

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management in Honda Company of automobile manufactures. The ways in which, quality is
managed or quality management is incorporated in the operations and supply chain
management will be analysed in the following description (Carter and Liane Easton, 2011).
Besides, theories like Total Quality Management will also be used in the succeeding report.
Another topic selected is location and layout. Here, the significance and impact of location
and layout in these above-mentioned factors will also be assessed in the report. Along with
these factors, relative theories and concepts will also be used for getting proper idea and
understanding of these concepts.
Management of quality at Honda and relevant theories and concepts
The first topic that has been selected for this report is the process of quality management in
the company of Honda motors. Honda is a multinational brand and its products and services
are distributed almost in every corners of the world. Therefore, it becomes very crucial for
Honda motors to pay major attention towards the management of the quality of their products
as well as to the quality of procedures involved with the production and distribution of the
products and services. As mentioned by Christopher (2016), offering better quality of
products and better quality in service provision has a great influence over the customers.
These factors regarding quality ensure the loyalty of the customer base of Honda motor
industry and help the company in sustaining its business for future days also.
Figure.1- Total Quality Management
(Source: Thumbs.dreamstime.com, 2019)

5OPERATIONS OF HONDA MOTORS
Honda applies the theory of total quality management for ensuring best possible quality of its
products and services. In the opinion of Rezaei et al. (2011), through this method of quality
management in its products and processes, Honda emphasise on strengthening its global
expansion and presence, as compared to any other automotive company. This objective or
aim of the company is focused and operations are carried out by considering this aim of the
company. As opined by Gimenez et al. (2012), Honda produces efficient automobiles at best
possible and reasonable prices, which help the company in proving their customers, the best
product and services according to their fixed budget. Through Total Quality management or
TQM, the products and process at Honda are improvised continuously. It has been stated by
Elkington, (2013), the application of TQM in Honda is carried out through effective and
active participations of the management, employees, distributors and even the opinions of
customers are undertaken. This helps the company providing the quality in their products and
service, as per the expectations and demands of the customers.
As mentioned by Yang and Deuse (2012), the process of quality management in Honda
occurs in several stages. First, an initial plan for application of TQM is formed by the head
authority of the management, which in Honda is the Chief Executive Officer of the company.
This plan is made by keeping in mind several factors like the perception and expectations of
the customers regarding quality, then the concept of cost cutting, development of existing as
well as new products and the aim of managing quality in the products and operations. As
opined by Aiello et al. (2012), all these factors are undertaken while formulating the plan,
with the help of employees and management in Honda motors. Then, this plan is
communicated and tasks are delegated to different employees. After the implementation of
the plan, the outcomes are observed and analysed and all the issues related to the plan or its
application are observed and assessed properly. Then, Altuntas and Selim (2012) have
mentioned that these issues are then eliminated or lowered and the improvised plan is
implemented. In this manner, plans are developed and applied until the expected results are
achieved in Honda.
According to Goldstein et al. (2012), for better quality management in the organisation, it is
crucial to have a better understanding and skills regarding quality management. Due to this
purposes, all the employees and personnel of Honda need to be well educated and informed
about various aspects of quality management. For this purposes, Honda provides training to
its employees, which is called as HBC that actually stands for Honda Quality Control Basic
course. As stated by Andayesh and Sadeghpour (2013), through this training approach, the

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employees engaged in quality control departments are trained to gain expertise in enhancing
quality and resolving all the quality related problems in the organisation. The main focused
area of Total Quality Management system in Honda is to eliminate any kind of defects in the
quality of raw material and supplies, acquired from the suppliers. This eliminates the chances
of quality defects and helps in provision of better quality to the customers. As mentioned by
Talib et al. (2011), in TQM system of Honda, quality inspection is carried out at every step of
the production process, which aids to the elimination of any quality related defects from the
processes and operations in Honda motors. In this way, the strategy and theory of Total
quality management is applied in Honda for better provision of quality to the customer. The
tool and techniques encompassed by TQM are also helpful in eliminating any kind of waste
from the products and processes like logistics and supply chain in Honda motors
organisation. In this way, best quality is assured at Honda automotive company.
Location and layout and corresponding theories and concepts
Wang et al. (2012) has stated that logistic and supply chain management has been one of the
crucial factors for better management of the organisational processes through proper
management of logistics and supply chain. The organisation can facilitate better flow of good
and can cut down the excess wastage of raw material or final products. As opined by
Wiengarten and Pagell (2012), in Honda, logistic and supply chain is managed through
proper selection of location and facility layout. As opined by Kim et al. (2012), the logistics
managers in Honda have a very huge responsibility to manage the logistics sector of the
company, according to the changes occurring in the business and market environment of
Honda Company. They focus and give importance to the facility location due to its huge
number of advantages for the business.
As mentioned by Goetsch and Davis (2014), through proper and appropriate selection of
successful facility location, managers in Honda will be able to reduce its logistics cost and
cost of transportation of goods and materials. The location of the company should be selected
in such a manner that the market as well as the suppliers is easily available in a fixed
minimum range of the organisation. Other factors like competitors’ location and layout
should also be considered while planning the facility layout and location of Honda.
According to Carter and Liane Easton (2011), location is very crucial factor for Honda as it
affects the financial budget of the company. Along with location, layout is also a great
influencing factor in management of the Honda organisation and its operations. It is an

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arrangement of all the essential resources in an organisation, which occupies space in the
facility. The layout planning in Honda motors should be done properly and in such a manner
that there is proper interaction and face-to-face communication among the workers and in
different levels of management and other departments. This will help in creating proper
working environment in the organisation. Therefore, as mentioned by Gimenez et al. (2012),
the location and layout of the organisation should be selected in order to ensure proximity
with the supply channels, lower cost of manufacturing and labour, and availability of
opportunities. This will help in reduction of cost of production and will help in increasing the
sales rate in the company. In this way, Location and layout has a significant role in logistics
and supply chain management of Honda motors.
Triple bottom line
This theory states that the business should be done by considering people, planet and profit.
As mentioned by Slaper and Hall (2011), through application of this theory, Honda can bring
sustainability in its operation management as well in its logistics and supply chain
management.
Figure.2- Triple bottom line
(Source: Anon, 2019)
Honda should be regularly contributing in the welfare of the human society and should
provide possible support to the communities, present in its business surrounding. In this way,
Honda will be able to contribute towards society and people. Secondly, as Honda is an
automotive company, it will definitely have a major impact on planet i.e. environment.
Therefore, Honda should manufacture more eco-friendly vehicles, which are also fuel-

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efficient. This will be a great contribution towards the environment or planet (Gimenez et al.
2012). Then the company should focus on earning profit and making growth in its economic
condition, which will also contribute towards national economy. In this way, Honda can
sustain its business operations and will be able to work in broader areas and spectrum.
Recommendation
It is recommended to Honda motors to focus on its quality of service and products and
enhance the quality through innovative and creative ideas. The company should keep on
bringing development in its TQM system as per the changing business environment and
demands of the customers. This will help the company in maintaining as well as in increasing
its customer’s base. The company should also plan its layout and location by considering the
all relevant factors discussed in the sections above. The company should also maintain
suitability in its operation, logistics and supply chain management for expanding its grip in
wider frames and spectrums (Goetsch and Davis, 2014). In this way, Honda will be able to
run its business in an effective and prosperous manner.
Conclusion
Operation management has a very crucial role in the success of business and organisation.
The report has covered all the relevant aspects and significances of operation management,
logistics and supply chain management in the business context of Honda Company. All the
relevant theories have also been used for providing better understanding of the discussed
concepts. The concept of triple bottom line has also been highlighted in the report. Overall,
all the relevant aspects of logistics, operation management and supply chain management
have been covered prosperously.

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References
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facility layout problem based upon slicing structure encoding. Expert Systems with
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Altuntas, S. and Selim, H., 2012. Facility layout using weighted association rule-based data
mining algorithms: Evaluation with simulation. Expert Systems with Applications, 39(1),
pp.3-13.
Andayesh, M. and Sadeghpour, F., 2013. Dynamic site layout planning through minimization
of total potential energy. Automation in Construction, 31, pp.92-102.
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management system. Scientia Iranica, 18(3), pp.742-752.

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