Lean Implementation At

HONDA

Vikas Mittal Rajeev Uniyal Vishal Rastogi Priyakant Gautam

and engineering time to develop a new product .1. the value stream and eliminating muda. investment in tools. human effort. inventory. manufacturing space. Lean focuses on flow. Lean Manufacturing ± A way to eliminate waste and improve efficiency in a manufacturing environment 2. the Japanese word for waste 3. Lean manufacturing is the production of goods using less of everything compared to traditional mass production: less waste.

Lean Manufacturing Advantages ‡ Advantages: ± Increased overall productivity ± Reduced amount of floor space required ± Reduced manufacturing lead time ± Improved flexibility to react to changes ± Improved quality .

expect supply chain issues while changing over to lean .Lean Manufacturing Disadvantages ‡ Disadvantages: ± Difficulty involved with changing processes to implement lean principals ± Long term commitment required ± Very risky process .

Good communication mechanisms and skills .High levels of supplier engineering .µHeavyweight¶ project managers ..Continuous incremental product improvement .Skillful use of computer-aided design tools .Design team and manager continuity .Rapid model replacement .Frequent model-line expansion .Overlapping and compressed development phases .Strict engineering schedules and work discipline .Multi-skilled engineers and design teams .

How LEAN Benefitted HONDA Element Communication Teamwork Motivation Traditional Slow & Uncertain Lean Fast & Positive Improvement Quality & Coordination Inhibited Enhanced Effective Teams Negative. Extrinsic Positive. Intrinsic Strong Motivation Skill Range Supervision Narrow Broad Job Enrichment Difficult and Fragmented Easy & Localized Fewer Supervisors .

How HONDA Customer·s BenefitTED from Lean Element Response Customization Delivery Speed Delivery Reliability Delivery Quantities Quality Traditional Weeks Lean Hours Easy Days Consistent & High JIT as Required Consistent & High Improvement 70-90% Competitive Advantage 70-90% Up to 90% Locks in JIT Customers Delighted Customers Difficult Weeks-Months Erratic Large Shipments Erratic .

HONDA PHILOSOPHY OF SUPPLIERS RELATIONS .

Benefits through Lean ‡ Time and money has seen dramatic cuts ‡ Allowed company to expand for more regional coverage ‡ Reduce time taken to accomplish certain tasks and add more responsibilities . Greatest impact on company¶s inventory flow and order distribution ‡ Real time traceability allowed him to cut materials by more than half and maintain a sufficient safety stock for when its time to reorder and restock.BENEFITS OF LEAN IN HONDA 1. 2.

As a result.2 million units by 2007.000 units to a total of 5. the annual motorcycle production capacity in Asia will reach 14 million units by 2007 ± an increase of 6 million units in three years.000 units.FACTS AND FINDING OF Honda AFTER APPLYING LEAN Expanding Business in Growth Areas after applying LEAN  Motorcycle Business in Asia: Hero Honda in India is planning to increase capacity of its existing line (by 450. compared to the 8 million unit capacity in 2004. With these expansion plans.000 units) as well as build a new plant with annual production capacity of 450. .  Honda is planning to expand motorcycle production capacity in the Philippines and Pakistan. annual motorcycle production capacity in India will increase by an additional 900.

000 units becomes operational this fall. . Honda will consider further expansion based on future market trends. Based on these expansion plans and other initiatives. Honda will consider further expansion to accommodate future growth in customer demand.000 units by 2008.Automobile Business in Asia: · Honda has decided to undertake the plan to double automobile production capacity in India three years ahead of the original schedule.  Automobile Business in China: · When Guangzhou Honda¶s second auto plant with annual production capacity of 120.000 units.5 million units for automobiles. total automobile production capacity in China will reach 530. and 7 million plus units for power products. Honda envisions 2010 global unit sales of more than 4.  Automobile Business in South America: Honda is planning to double production capacity of its auto plant in Brazil to 100.000 units around the end of 2007. Annual automobile production capacity in India will reach 100. 18 million units or more for motorcycles.

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