Honda Vietnam Final Essays

Honda Vietnam Final Essays Honda Vietnam Final Essay Honda Vietnam Final Essay The first factory was opened in 1 998 and the second in 2008 in Vine Pouch province, with a total capacity of 1. 5 million motorbikes a year and total workforce of 4,935 workers. If the first factory was an evidence of a serious and long -? term investment of Honda in Vietnam, the second factory is a great effort of Honda Vietnam to prove that it focuses a lot of attention to the environmental and social issues, which is the harmonious combination of three natural sources of energy: Wind, Light and Water to generate environmental and friendly technology. Recently, the third plant was officially inaugurated in Ha Name province, increasing the total capacity to over 2 million motorbikes a year. There is no doubt that Honda Vietnam has had the greatest contribution to the motorcycle industry of Vietnam, in meeting a variety of demands and needs of the customers. Honda Vietnam is proud to become one of the biggest motorcycle manufacturers in the Asian region as well as in the globe (Honda Vietnam, 2014) From the perspective of operation management, managers should take the highest accessibility in quality control and quality assurance of the products, making sure that all the motorbikes produced satisfy the customers needs to the optimal level. . 2. Organizations Customers According to Slack et al. (201 3), the customers of an organization include internal and external customers. An internal customer is defined as a process or an individual belonging to an operation which is the customer Of other internal process or individuals. In the meantime, an external customer operates in a free market (Ibid) which could be the companys wholesalers, retailers and individual customers. T he authors stated that in order to satisfy the external customers, the internal customers must be satisfied as well. Thus, treating both the external and internal customers with the same level of consideration and care will improve the effectiveness of the whole operation (Ibid). In accordance with the theory of Slack, both the people in Honda Vietnam and the consumers are the internal and external customers respectively. Different customers will specifically have different expectations towards the companys outputs, which are defined as competitive factors of the products. Slack et al. 2013) divide these factors into two types: order winning and qualifying factors. The order winning criteria directly and considerably contribute to the victory of the product in the market, as such the customers with order winning preference will enjoy a high quality, fastest product, and extremely reliable and flexible product. Meanwhile, the qualifying criteria mark the boundary in which the product must at least equalize those criteria to be considered by the customers, for instance a workable product with basic functions, which is affordable and fast enough. In line with this concept by Slack et al. 013), the customer order-winning criteria of Honda Vietnam will aim at the most expensive motorcycles with most advanced technology and modern motorcycles such as SSH 1 25 c, SSH 1 SO c, PC, and Air blade. The customer qualifying criteria will pay more attention to the basic and old style (workable competition, low cost) of Honda Vietnam such as Wave Alpha, Super Dream, and Wave S. 1. 3. Operation objectives The external customers as aforementioned are the repres entatives of the market. Obviously, without understanding the need of the markets, the company will fail to realize which priority it should focus on, including but not emitted to quality, speed, dependability, flexibility and cost. For instance, when the customers value the low-priced products, the operation should aim at reducing cost; when the quality is valued, the operation should aim at producing high quality products. Honda Vietnam has four main operation objectives: (1) quality, (2) speed, (3) flexibility, and (4) cost. To Honda Vietnam, the company is well aware of the importance of quality objective in its operation of motorcycle manufacturing. The high quality motorbike means that all the parts and the assembly are made to highly standardized specifications. All the spare parts, no matter are produced in any country; must strictly comply with the technology secrets of Honda Japan, which have globally recognized quality. For instance, the tires used in manufacturing the motorbikes must be carefully examined in advance by Honda Vietnam and match each type of motorbike (Honda, 2014). Furthermore, all spare parts of Honda Vietnam must have the certified stamp of Honda Motor Co. Ltd. To indicate the high quality parts (Ibid). Speed is another operation objective Of Honda. It is the effort to minimize the time from the customers request of the product to receiving that product. In such a competitive business environment, speed plays an important role in determining the survival and growth of a business. The speed not only helps reduces the inventory cost but also risk during the operation process (Slack et al. 2013). Honda Vietnam has to compete with a number of giant motorcycle producers such as Pigging, Yamaha, Suzuki and GYMS. Clearly, if the objective of speed is not achieved, the external customers will direct their choice to other products of the other competitors. Fortunately, the speed factor in Honda Vietnam is always guaranteed thanks to the spare parts which are directly manufactured by the many itself. This result in a considerable time saved for deliver ing spare parts to the manufacturer like in other plants. The third operation objective of Honda Vietnam is flexibility. Theoretically, flexibility enables the company to create new product and service, more variety, flexible volumes and delivery dates, etc. Closely based on the customers demand of flexibility, Honda Vietnam has designed a number of motorcycles of the same brand. Take Wave brand as an example. The Wave has various brand names such as Wave Alpha, Wave S Deluxe, and Wave RSI. In this order, the motorcycle was enhanced with new specification and renovation, satisfying the customers demand and affordability. Last but not least, the forth operation objective of Honda Vietnam is cost. Whether competitive in cost, any dollar of cost saving add more to the profit of the company, thus cost objective is an extremely attractive (Slack et al. , 2013). In achieving this operation objective, Honda has built up 3 motorcycle plants in total in the two Northern provinces of Vietnam, recruiting directly the Vietnamese employees and has invested a lot in green technology, which together aims to reduce operation cost. 2. ANALYSES AND FINDINGS 2. 1 . Analyses of transformation process All operation process are the input transformation output process. It means that the input resources are either (or both) transformed themselves or (and) are transforming something else to the output (I . E. Product or service) (Slack et al. , 2013). Obviously, whether the aforementioned operation objectives are achieved or not depends significantly on the transformation process. For instance, whether the outputs are qualified depends on the quality of the inputs, the technology used to transform such inputs, and the skills of the staff, etc. Due to the specific nature of the industry, each many will have predominant input resources. For the manufacturer like Honda Vietnam, the most important transformed input resources are the materials, and followed by the information whereas customers are not a key part of the transformed inputs. The materials such as steel, plastic, iron, bronze, glass, paint and spare parts such as battery, brakes, clutch, exhaust, mirrors, lighting, cables, filters, levers, tires, bearings and clutch, etc. Re the most frequent transformed inputs of Honda Vietnam to manufacture a complete motorcycle. In addition, the information can be considered another transformed input. It means that the idea of the engineer and the design draft stored in his computer software about a motorcycle have been transformed into a real motorbike. Regarding the transforming input resources, Honda Vietnam combines successfully the resources of facilities and human. The facilities include the building the plants, the machin eries such as rail, assembly chain, and an equally important factor of technology. The staff here means the relevant people at all levels from top management, middle, and line manager to the whole employees who are contributed whether directly or indirectly to the production of a motorbike. In addition to such tangible resources, intangible resources are also of utmost important in the motorcycle industry, such as relationship with the suppliers, the established reputation, the corporate culture, the intellectual property and knowledge transmission, etc. Have their own irreplaceable values (Slack et al. , 2013). Honda Vietnam is not an exception and all of the intangible resources contribute a considerable role in gaining the competitive advantage for the company in the local market. The next part will present in more details if the transformed and transforming input resources are able to meet the operation objective and customers demand. 2. 2. Analyses Of transformed resources After nearly two decades of presence and operation in Vietnam, Honda Vietnam has made a long strive in helping the motorcycle industry be able to fully competitive in the world; even Vietnam has become the leading country in motorcycle manufacturing. More proudly, The Investment Review (2014) states that Vietnam almost no longer depends on other countries, in particular China in importing spare parts and materials. Instead, Honda Vietnam has achieved the average localization rate of 93%, some motorbike rand even have the rate of 99%. This is a great figure if it is compared to Honda Vietnamese localization rate of 10% in 1 998 (Ibid). By directly manufacturing almost all necessary components Of a motorbike, Honda Vietnam has created a truly trademark of Made in Vietnam for the local motorcycle industry (Ibid). Thanks to the great attempts, Honda Vietnam now can save a lot of costs such as import duties, import procedure costs, and transportation costs (via cars, ships, trains, or even flights). The spare parts are produced and examined directly in the plant, also saving time for the manufacturing process. It is worth emphasizing again that all the spare parts made by Honda have been widely recognized in the global scale as high quality and reliable components, despite it is only on establishment standard basis rather than any international standards like ISO or EUROPE, etc. However, the Honda trademark of the spare parts has been widely associated with high quality and gained trust and confidence from the consumers. In other words, the operation objective of quality has been successfully delivered by Honda Vietnam, I. E. It satisfied the order-winning customers. The localization rate of the transformed input resources has educed the production cost and created an opportunity for the consumers to use a premium product with a lower cost than ever before. Take the SSH motorbike as an example. SSH is the most expensive product line of Honda Vietnam, which costs around 5,000 USED at the time of 2009 or equivalent to 100 million VEND. The localization rate, according to Mr.. Masking Garish, the ex-CEO of Honda Vietnam, enables the price to lower and completely affordable (Tan Viet Securities, 2012). Currently, the SSH brand is far away from something too luxurious, at the price ranging from 2,500 USED to 3,300 USED to ,000 USED depending on each brand (SSH mode, SSH chic, or SSH chic respectively)l . Honda Vietnamese products have increasingly met the affordability of the local consumers With many types of motorbikes with the unchanged and global standard quality, I. E. The cost and flexibility operation objective has been targeted. 2. 3. Analyses of transforming resources The transforming resources of Honda Vietnam are mainly facilities and people, as mentioned in Section 2. 1. To be more specific, each operation process is characterized with different features, depending on a number of factors known as ups and vs.. The ups include Product (type of product, nature Of demand, price and quality); Process (type of process, process capacity); Plant (capacity of plant, location, layout and type of technology); Plant programs (production plans, maintenance plans, warehousing and logistics); and People (type of skill and knowledge as well as their aptitude and motivation). Meanwhile, the vs. are composed of the Volume of output, Variety of output, Variation in the demand for the output and degree of Visibility that the customers have of the output creation (Slack et al. 2013). The key components of SSP Mill be discussed in this section. In Honda Vietnam, each of the three manufacturing plants have the own purpose. While the first plant in Vine Pouch province is the birthplaces of almost types of motorbikes in particularly Wave and Dream, the second plant also in the province specializes in the high quality gear motorcycles and scooters, and the third plant in Ha Name province will produce mainly scoote rs, in particular Honda Airbed 1 25 c due to the high demand of the market for the scooters (Saigon Times, 2014). Each of the plant is divided with clear layout and distinct functions, including 7 areas: workshop for assembling engines and monuments, workshop for assembling final motorcycle, casting workshop, spare part processing workshop, plastic molding workshop, paint and welding workshop. Interestingly, the factors of technology and environment have been always well perceived and properly implemented by Honda Vietnam. All the plants utilize the availability of three natural resources: Wind, Solar and Water resources in the most harmonize and adequate manner. This not only makes the atmosphere in the factories fresh and bright but also save a great amount of energy cost for the company. Furthermore, the whole prod auction recess meets the strictest environmental and quality regulations in the world and Vietnam, such as ISO 9001 and ISO 14001 (Honda, 2014). The motorcycle is also equipped with the most advanced technology, such as the use of chic esp. engine in replacement of the old chic, which makes the motor more smooth, with stronger capacity but less energy consumption. Not only Airbed, but also PC 125, SSH 125 and most recently Lead 2013 use this technology (Autocrat, 2013). In reference to the operation objectives, it is doubles that the facilities and technology have contributed to the speed and cost objectives of the company. Together with the specialization of plants and state of the art technology used, the people in Honda Vietnam are also specialized. The employees are well equipped with protection costumes and necessary knowledge to fulfill their tasks. Moreover, they are always motivated by the long established reputation, image as well as a wonderful corporate culture which is inspired greatly by the Japanese top management. Honda Vietnam is not only respected for their efforts in the motorcycle industry of Vietnam but also for their corporate social responsibilities, such as sponsorship for a number of education contests and awareness raising managing (Honda Young Engineers and Scientists, Young Inventors, and Traffic Safety Live Programs, etc. (Honda Vietnam, 2014). These invisible values certainly inspire and motivate all the people including the manufacturing workers to try their best to devote to the accomplishment of Honda Vietnam. Regarding the vs., overall the process of motorcycle manufacturing is impacted by high volume, low variety, low variation, and low visibility. A motorbike will be completed in every 30 seconds, and each year the total capacity of three plants is approximately 2. Million motorbikes to meet the inc reased market demand. Each motorbike will be slightly different or renovated from the older mode, thus the low variety and low variation in the market demand will help Honda Vietnam maintain a low unit cost, high standardization, stability and predictability (Slack et al. , 2013). Last but not least, the low visibility which means the low customers experience of the operation activities also adds to the lower unit cost and higher standardization. However, the time lag between production and consumption could be affected (Ibid). 2. 4. Analyses of value-added output The value-added output is one the efficiency measurement of the operation recess, which is the work content to only those tasks which add value to the process (Slack et al. , 2013). According to Autocrat (201 3), the average time of producing a motorbike is 30 seconds. Thus, to achieve the capacity of around two million units a year, more than 1,800 units must be manufactured a day by each plant. With the current production time, the total hours spending on motorcycle manufacturing must be around 15 hours. 3. RECOMMENDATION TO ACHIEVE OPERATION OBJECTIVES The analysis above indicates that Honda Vietnam has successfully meet the market demand with a proper operation process. As the process is not managed by the customers (low visibility), Honda Vietnam shout continue inspiring and motivating the employees, as well as issuing strict rules of quality controls so that all of the employees are committed to the highest quality assurance. In addition, with the high acidity to achieve such a value added efficiency, Honda Vietnam should continuously reconsider the shifting policies so that the health and benefits of the employees are guaranteed. In the meantime, Honda should continue applying the most advanced technology to not only reduce cost but also brings prestigious reputation for he company itself as the leading manufacturer with user, environmental -? friendly technology. As such, the operation objectives of Honda Vietnam will sustainable achieved.