Hidenobu Iwata, president and CEO of Honda North America Services, LLC, and leader of North American automobile manufacturing challenges suppliers to grow capabilities and assume a larger role within global Honda
Honda today honored 53 suppliers in North America for excellence in key performance categories including quality, value and on-time delivery for their efforts during the company’s record production year in 2012. The annual conference includes a network of 632 Original Equipment Manufacturer (OEM) suppliers. Honda also met separately with service parts suppliers that provide parts for in-market Honda and Acura vehicles, honoring an additional 50 suppliers for outstanding performance.
After a very challenging 2011, with two epic natural disasters in Japan and Thailand disrupting Honda’s global parts procurement and production, Honda’s North American operations manufactured a record 1.7 million automobiles1 in 2012, as the company worked to replenish its product pipeline and rebuild dealer inventories. This included 1.2 million passenger cars and light trucks in the United States. As a result, Honda set a record by purchasing $24.2 billion in parts and materials from OEM suppliers in the region, including $21.9 billion from parts suppliers in the U.S.
In addition to supporting its ongoing expansion in North America, Honda’s 632 suppliers in the region will take on additional responsibilities to lead the launch of global products, such as the Civic, that Honda manufactures in markets around the world. This means the North American region will lead the engineering and manufacturing launches of these new models, and then share production knowledge and processes with Honda plants around the world.
Further, in 2014, Honda will open a new auto plant in Celaya, Mexico, to build the next generation of the Honda Fit and other vehicles for the subcompact segment. This will expand Honda’s North American production capacity to nearly two million (1.92 million) passenger cars and light trucks. “As a result, 95 percent of the vehicles we sell in North America will be made here as well,” Iwata said to the more than 600 suppliers attending the event. “In addition, within the next two years, Honda will become a net exporter from North America.”
After more than 30 years of expansion, Honda and its large supplier network have established a strong foundation in North America, and this is a starting point to take on new global responsibilities, said Jim Wehrman, senior vice president at Honda of America Mfg.
“I guess you could say ‘no good deed goes unpunished,’ because our success together has earned us increased responsibility to make North America Honda’s leading and most competitive region in the world,” Wehrman said. “Now we must have a global focus. This is a giant leap for Honda in North America.”
Suppliers will also support a substantial increase in the export of Honda and Acura automobiles from North America in the next few years, to a level doubling last year’s export total of nearly 100,000 units. This means that for the first time in its history, Honda will export more vehicles from North American that it will import from Japan.
“Together, we are now on a global stage,” said Tom Lake, division manager of Honda’s North American Purchasing. “Honda is growing, and we want our suppliers to grow with us and share in that success. To support our global role, you need to provide strong regional leadership in both the design and production of innovative, next-generation parts and components.”
Lake added that Honda’s suppliers in North America will have both opportunities and challenges as they assume these new responsibilities to expand production and meet the expectations of customers in other regions of the world. This will include initiatives to improve the quality, efficiency and flexibility of their production operations.
2013 OEM Supplier Awards
Honda’s 632 Original Equipment Manufacturer (OEM) suppliers provide parts to 14 Honda manufacturing plants in North America for the production of Honda and Acura automobiles, all-terrain vehicles (ATVs) and other utility products. During the conference, the company honored 45 OEM suppliers for their excellence in one or more of three categories: Quality, Delivery and Value.
Among these recipients, FT Precision, Inc., Fredericktown, Ohio, was a “triple award recipient,” received awards in all three categories, and 16 suppliers received awards for excellence in two of the three categories.
Honda also recognized eight OEM parts suppliers for Challenging Spirit, based on their initiatives to overcome extraordinary operational challenges.
In addition, U.S. Engine Valve, Westminster, S.C., received the 2013 Honda Corporate Citizenship Award for demonstrating an exceptional commitment to social responsibility. This award is based on leadership in the areas of health and safety, diversity, community involvement, ethics and compliance, and the environment.
2013 Service Parts Awards
Honda’s Service Parts suppliers provide customers with top-quality service parts in a timely manner and at competitive prices for the maintenance and repair of Honda and Acura customers’ vehicles.
|Honda OEM Parts Purchasing|
|Key States Where Honda Manufactures Automobiles|
|Ohio||$9.2 Billion||155 Suppliers|
“We are now at a critical point in the history of our operations in North America,” said Bruce Smith, senior vice president of the Service, Parts and Technical Division of American Honda Motor Co., Inc. “By advancing our speed to market in every area and reshaping our service parts business around the needs of the customer, we will position ourselves to meet the challenge of tremendous growth in the years ahead.”
Fifty Service Parts suppliers received awards for top-level performance in 2012. Service Parts suppliers were rated on their performance in quality, cost and delivery. Distinct from the OEMsupplier awards, an overall score is based on the combined performance in all three categories.
Honda also shared the results of the 2012 Carlisle & Company Automotive Parts Manager Survey, which saw Honda or Acura leading the competition in many measures of service parts performance, including parts availability, order processing system, parts delivery, time from order to delivery and consistency of delivery. In terms of overall satisfaction, Acura led the industry with a score of 79.5 percent, with Honda in third place.
American Honda provides service and accessory parts for the nearly 20 million Honda and Acura automobiles in operation in the United States today. The company manages a national network of warehousing and distribution facilities that deliver high-quality, high-value service parts to approximately 1,300 Honda and Acura dealers nationwide. Honda purchased more than $1.1 billion in parts from its Service Parts suppliers in North America last year.
Honda established operations in America in 1959, and now employs more than 33,000 associates in its North American sales, R&D and manufacturing operations with a capital investment of more than $22 billion.
Based on its longstanding commitment to “build products close to the customer” Honda operates 14 major manufacturing facilities in North America, producing a wide range of Honda and Acura automobiles, automobile engines and transmissions, Honda all-terrain vehicles, and power equipment products such as lawn mowers, mini-tillers and general purpose engines, using domestic and globally sourced parts.
Seven Honda auto plants in the North American region, including four in the U.S., have the capacity to produce 1.63 million automobiles each year. In 2012, 90 percent of the Honda and Acura automobiles sold in the U.S. were produced in North America. This will increase to 1.92 million vehicles per year in 2014, when the sales percentage of locally produced automobiles is expected to rise to more than 95 percent.
Honda R&D Americas, Inc., (HRA) operates 14 facilities in North America and is responsible for “complete product creation,” of advanced automobile, power sports and power equipment products and technologies. Since 1990, HRA has researched, designed and developed more than 20 all-new automobile models.
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For More Information
Ron Lietzke, Honda North America, Inc., Ohio
Edward Miller, Honda North America, Inc., Detroit
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1Using domestic and globally sourced parts