Honda to Suppliers: Flexibility Fundamental To Survival
60 Suppliers Receive Awards for Quality, Productivity and On-time Delivery
April 16, 2009 – BIRMINGHAM, AL
Honda leaders shared their direction for overcoming the difficult economy at the company’s annual supplier conference Thursday, saying that this time of challenging business conditions provides a unique opportunity to increase flexibility and make significant operational improvements.
Honda also recognized 60 of its suppliers for their top performance last year in the critical areas of quality, on-time parts delivery and productivity improvements, including 12 in Ohio. With one triple and 10 double award recipients, Honda presented 72 awards to its North American parts suppliers.
Timing of the annual conference in the middle of a difficult economy is not easy, but does provide opportunities, said Hidenobu Iwata, president and CEO of Honda of America Mfg., Inc., and leader of Honda’s North American manufacturing. He added his appreciation for the strengthening partnership with suppliers to improve production characteristics. “Our ultimate commitment is to our customer,” Iwata said. “This has served us well in North America over the past 50 years and will continue to lead our way for the coming 50 years. I would say this commitment is more important than ever before.”
It is important to move forward with a long-term viewpoint, while also taking action with speed and decisiveness in the current market situation, added Larry Jutte, Honda of America senior vice president.
“Here in North America, Honda has implemented a variety of measures . . . step by step . . . that would have been unimaginable even six months ago,” he said. “But no matter how wrenching these changes may seem, the decisions we have made are the result of careful and strategic management. . . . The concept of speed and flexibility is an undercurrent running throughout our entire production network in North America.”
Honda implemented its flexible manufacturing system nearly a decade ago to speed response to customers. At that time, Jutte said the characteristics of speed and flexibility were considered something of a luxury. “Now it is a fundamental requirement for survival,” he said.
Using its flexibility, Honda recently transferred Civic production from East Liberty, Ohio, to its new plant in Indiana, and the Ridgeline pickup truck from Canada to Alabama. This summer, V-6 Accord sedan production will begin at Honda Manufacturing of Alabama as Honda’s plant in Marysville, Ohio, increases production of four-cylinder Accords and reduces the number imported from Japan.
“We fully expect the market to strengthen in the future, and the changes we have made have us well-positioned for when the market returns,” Jutte said of Honda’s use of flexibility to transfer products strategically to meet customer demand.
In 2008, Honda plants produced 1.42 million passenger cars and light trucks in North America, including 987,000 in the United States, 383,000 in Canada and 51,000 in Mexico. The company purchased a record $19.5 billion in parts and materials from 620 North American suppliers in 2008 as well.
This year marks the 50th anniversary of the establishment in 1959 of American Honda Motor Co., Inc., Honda’s first overseas subsidiary. Honda began U.S. motorcycle production nearly 30 years ago in Ohio in 1979, and U.S. automobile production in 1982. The company has invested more than $10.6 billion in its North America operations, including 16 major manufacturing facilities employing more than 34,000 associates, to produce Honda and Acura automobiles, motorcycles, all-terrain vehicles, personal watercraft, lawn mowers, general-purpose engines, and other power equipment products. In January, Honda produced its 20 millionth automobile in North America.