Project Tqm Honda

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Submitted By: Ejaz Ahmed MBA 19B

Submitted To: Hakim Khan

9/12/2013

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Executive Summary

Honda Motor Co., Ltd., together with its subsidiaries, engages in the development, manufacture, and distribution of motorcycles, automobiles, and power products primarily in North America, Europe, and Asia. Its motorcycle line consists of business and commuter models, as well as sports models, including trial and motor-cross racing; all-terrain vehicles; personal watercrafts; and multi utility vehicles. The company also produces various automobile products, including passenger cars, minivans, multi-wagons, sport utility vehicles, and mini cars; and power products comprising tillers, portable generators, general-purpose engines, grass cutters, outboard marine engines, water pumps, snow throwers, power carriers, power sprayers, lawn mowers and lawn tractors, home-use cogeneration units, thin film solar cells home use, and public and industrial uses. In addition, it sells spare parts and provides after sales services are through retail dealers, as well as involves in retail lending, leasing to customers, and other financial services, such as wholesale financing to dealers. The company was founded in 1946 and is based in Tokyo, Japan.

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INTRODUCTION

Honda has been the world's largest motorcycle manufacturer since 1959, as well as the world's largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. Honda surpassed Nissan in 2001 to become the second-largest Japanese automobile manufacturer. As of August 2008, Honda surpassed Chrysler as the fourth largest automobile manufacturer in the United States. Honda is the sixth largest

automobile manufacturer in the world.

Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda also manufactures garden equipment, marine engines, personal watercraft and power generators, amongst others. Since 1986, Honda has been involved with artificial intelligence/robotics research and released their ASIM O robot in 2000. They have also ventured into aerospace with the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 Honda Jet, scheduled to be released in 2011. Honda spends about 5% of its revenues into R&D.

HISTORY OF HONDA

From a young age, Honda's founder, Soichiro Honda (本田宗一郎, Honda Sōichirō) had a great interest in automobiles. He worked as a mechanic at a Japanese tuning shop, Art Shokai, where he tuned cars and entered them in races. A self-taught engineer, he later worked on a piston design which he hoped to sell to Toyota. The first drafts of his design were rejected, and Soichiro worked painstakingly to perfect the design, even going back to school and pawning his wife's jewelry for collateral. Eventually, he won a contract with Toyota and built a factory to construct pistons for them, which was destroyed in an earthquake. Due to a gasoline shortage during World War II, Honda was unable to use his car, and his novel idea of attaching a small engine to his bicycle

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Page 4 attracted much curiosity. He then established the Honda Technical Research Institute

in Hamamatsu, Japan, to develop and produce small 2-cycle motorbike engines. Calling upon 18,000 bicycle shop owners across Japan to take part in revitalizing a nation torn apart by war, Soichiro received enough capital to engineer his first motorcycle, the Honda Cub. This marked the beginning of Honda Motor Company, which would grow a short time later to be the world's largest

manufacturer of motorcycles by 1964.

The first production automobile from Honda was the T360 mini pick-up truck, which went on sale in August 1963. Powered by a small 356 cc straight-4 gasoline engine, it was classified under the cheaper Kei car tax bracket. The first production car from Honda was the S500 sports car, which followed the T360 into production in October 1963. Its chain driven rear wheels point to Honda's motorcycle origins.

COMPANY PROFILE

Company Name

Honda Motor Co., Ltd.

Head Office

1-1, 2-chome, Minami-Aoyama, Minato-ku, Tokyo 107-8556, Japan Tel: +81-(0)3-3423-1111

Established

September 24, 1948

President & CEO

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Capital

¥86 billion (as of March 31, 2010)

Sales (Results of fiscal 2010)

Consolidated: ¥8,579,174 million Unconsolidated: ¥2,717,736 million

Total number of employees

Consolidated: 176,815 (as of March 31, 2010) Unconsolidated: 26,121 (as of March 31, 2010)

Consolidated subsidiaries

390 subsidiaries (as of March 31, 2010)

Chief Products

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CURRENT MARKET POSITION

With high fuel prices and a weak U.S. economy in June 2008, Honda reported a 1% sales increase while its rivals, including the Detroit Big Three and Toyota, have reported double-digit losses.

Honda's sales were up almost 20 percent from the same month last year. The Civic and the Accord were in the top five list of sales.

Analysts have attributed this to two main factors. First, Honda's product lineup consists of mostly small to mid-size, highly fuel-efficient vehicles.

Secondly, over the last ten years, Honda has designed its factories to be flexible, in that they can be easily retooled to produce any Honda model that may be in-demand at the moment. At the 2008 Beijing Auto Show, Honda announced that they were looking to develop an entry-level brand exclusively for the Chinese market similar to Toyota's Scion brand in the USA

CUTTING-EDGE TECHNOLOGY

Their fundamental design philosophy seeks to maximise space and comfort for people, while minimising the space required for mechanical components. With this aim in mind, Honda's R&D activities include product-specific development and fundamental research. Some of the technologies include,

 Combi Break System  HondaMatic Transmission  Fuel Injection System  Idle Stop System

 Honda Fuel Cell Vehicle, Honda FCX

MANAGEMENT POLICY

Honda works to ensure that the products and services result in 3 joys: Joy for people who buy them.

Joy for those who sell them and Joy for people who produce them.

QUALITY OBJECTIVE

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Page 7 Maintain an international viewpoint; we are dedicated to supplying products of the highest

efficiency yet at a reasonable price for worldwide customer satisfaction.

TOTAL QUALITY MANAGEMENT

Total quality management or TQM is an integrative philosophy of management for

continuously improving the quality of products and processes.

TQM functions on the premise that the quality of products and processes is the

responsibility of everyone who is involved with the creation or consumption of the products or services offered by an organization.

In other words, TQM capitalizes on the involvement of management, workforce, suppliers, and even customers, in order to meet or exceed customer expectations

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HONDA’S QUALITY ENHANCEMENT SYSTEM

We have established a Quality Center to bring together the various components of our organization concerned with products quality data, allowing us to enhance our worldwide ability to both prevent quality issues and quickly detect and resolve them when they occur. The facility gathers quality-related data from dealers in Japan and overseas through service departments and the Customer Relations Center. Measures and policies for preventing quality issues are then developed based on the issues identified from this data and provided as feedback to R&D and production departments responsible for operations including product design, manufacture, and part supplier relations. When a quality issue does occur, we move quickly to resolve it, for example by working closely with R&D and production departments to investigate and address the cause, dealing with affected customers, and taking action to prevent a recurrence.

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TQM METHODOLOGY AT HONDA

To implement TQM, the CEO has strengthened: Customer focused viewpoint.

Increased efficiency. Cost cutting efforts. Delegation of authority. Expediting daily operations. New product development.

PDCA CYCLE

Basic principle of TQM is to bridge the gap between “Target” and “Status quo”. PDCA cycle to bridge the gap:

Make initial plan. Implement the plan. Analyse the outcome.

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Page 10 Recognise new problems and improve the process of operation.

Repeat process till target is achieved.

IMPLEMENTING QUALITY MANAGEMENT EDUCATION

In Japan, Honda offers a training curriculum divided into four courses according to in-house qualifications and the extent of individual workers' quality control responsibilities in order to improve associates' quality assurance skills.

The Honda QC Basic Course (HBC), which was first offered 40 years ago, provides an example of how Honda is working to train its personnel to be leaders in improving quality.

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CONCLUSION

Honda operates a TQM system. Its philosophy is to push quality back to the supplier, expecting the products to arrive defect free to Honda’s defined level. But this won’t ever stop the company from checking.

“With the tolerances and the complexity of some of the components, we’ve found that some suppliers are not always able to guarantee meeting our specs – so we rely heavily on inspection. For the more critical components, particularly safety critical components, we carry out 100% inspection,” says Honda.

Operations Director, Professor Gary Savage, adds: “Last season Honda recorded zero stoppages due to reliability of the chassis. The TQM system clearly contributed significantly to this. Our aim now is to maintain this record as we move forward – and the system and processes will develop in order to facilitate this aim.”

TOKYO—Honda Motor Co. said it would voluntarily recall 962,000 cars world-wide to repair problems with power window.

The car maker said no serious injuries or fatal accidents have been reported as a result of the problems. The company estimated it would spend ¥1.29 billion ($16.8 million) in Japan for the recall.

Honda, Japan's third-biggest car maker by volume, recalled more than 2.3 million vehicles in early August, citing problems with automatic transmissions. A Honda spokeswoman said there were nine reported cases of vehicles catching on fire in Japan and China because of the power-window problem. She also said two people reported light burns after touching overheated switches.