SUPPLY CHAIN AND
OPERATIONS MANAGEMENT
WAC-Assignment # 02
Submitted By:
Sonalka Katyara (093-21-0012)
Assigned by:
Syed Aamir Ali Shah
MARCH 17, 2022
Question # 01
Honda’s approach to product development is bold, innovative, egalitarian and unique to
other automobile manufacturers. Since the foundation of Honda Motors Co Ltd, it has
grown from a small manufacturer of small engine powered bicycles and today it is amongst
the largest engine manufacturers of the world. It is only due to its belief that the primary
method of communicating is through their products, also the history demonstrates that the
company has been persistently striving for improvement in the existing products,
continuous thrive of improvement and development of new products and Honda’s
engineering excellence has won the company and people with in countless awards. Honda
have a separate R&D entity of its own, both welcome the toughest design, manufacturing
problems and challenges to solve them innovatively and quickly.
Honda have the management principles that provides an environment without constraints,
people are encouraged to think, participate, experiment and improve their performance and
that energizes inner creativity.
Automobile development funnel mainly comprised of four phases: Concept development,
Engine development, Vehicle design and development and development and process
engineering. Unlike most automobile companies that employs functional teams structure
that engage functional subspecialty engineers in different projects under the supervision of
a project manager, Honda employs autonomous or dedicated team structure with
independent teams and focused organizational units dedicated to the development of new
car model (a project). The automobile development at Honda involved the concurrent
engineering of vehicle and engine, their technical expert believe that every car deserves a
new engine, the coherence defines the vehicle’s true character. While other competitors
develop new car model by little or no improvement or changes in old engines. Moreover,
Honda do not believe in organized market research, instead the new market trends are
discussed with product planners, opinions od car dealers and actual & potential customers
accordingly then Honda engage itself heavily in R&D to come up with totally new and
creative concept combined with technical excellence with an objective of satisfying
customer preferences. It shows Honda has created its own unique day to retain in the market
and deliver innovation and excellence “The Honda Way”. Therefore, ensuring the overall
coherence, balance, elegance and creates a consistent experience for customers serves as a
key to success for Honda.
Question # 02
Honda introduced a new version of Today begun in January 1988 with an updated exterior styling
and a new engine in which Honda has just spent ¥5 Billion now he is conscious of the expense and
risk to spend another ¥1.5 billion to ¥5 billion to expand the engine due to the impact of tax changes
and MOT recommended accordingly. Spending so much money on Honda Today further would
greatly affect the bottom line for Honda, therefore redesigning entirely again and spending further
¥5 billion would not serve to be a sensible option in the time available as it will concentrate the
resource allocation. As conventionally, models tended to undergo a major redesign about once in
each six years, it’s a time taking process. If Honda today is not presented with the specified 660
engine, Honda could lose some of the market share of micromini and it would also cause negative
image for future models. Therefore for now going with ‘increasing the bore length of the existing
engine’ seems to be viable and cheapest option. This would cause low overhead cost comparative
to other options and would also not affect the performance it would be within range. Keeping in
view the high competition in Micromini segment, in order to retain the comparative market share
and brand equity he must release the model with cylinder bore expansion for now.
Question # 03
Each competitor would make the changes according to the current engine specifications in order
to compete in the market, they will have to reduce the engine displacement from 800cc to the range
of 650-690cc, which could not be possible by only increasing the bore, therefore the more cost
would incur to them. But they would try to achieve the timely response to the changes would enjoy
substantial advantage in the marketplace. While some competitors like Daihastu can achieve it
with some changes in the engine and easily compete Honda. They will then try and grab the
customers of Honda and l grab its market share.