External Operations Management Consultant – Honda

External Operations Management Consultant – Honda

To: Honda Company CEO

From: Consultant

CC: Other recipients

Subject: Operational Issue at Honda

Background Information

Honda is a world-leading Japanese automobile manufacturer. Although the company is mainly known for its Honda motorbikes, a significant part of its revenue comes from general automobiles. Honda is a leading exporter to countries like the US, with subsidiaries and joint venture engagements worldwide. Do you need help with your assignment ? Get in touch with us at eminencepapers.com.

Honda Company has patent rights over the technologies and products it has created over the years. The patents affect the company’s short-term and long-term initiatives, the most impactful being the driver-assistive technologies (SEC, n.d.). However, the company is unable to protect most of its patent rights. The company has also had to pay huge fines resulting from infringement suits.

Honda’s markets are based on three key segmentation factors: psychographic, behavioural, and demographic. Age is an essential factor in demographic segmentation. For instance, a 20-year-old is more likely to purchase a Honda Civic Si than a 70-year-old. Income is also a factor in the company’s segmentation.

Although the company is in an excellent financial trajectory, it was affected by the COVID-19 pandemic. Honda’s overreliance on the Asian market led to significant losses earlier during the onset of the pandemic. The Asian market lost 13% segmental revenues, whereas Europe lost 10% revenue due to declining sales (SEC, n.d.). However, the global motorbike market remained relatively stable during the period.

Problem

While some Honda vehicle models, such as the Honda Civic, are reliable, some leave the manufacturing plant as ticking time bombs. Honda Company has grappled with product recalls over the years due to quality issues. Recalls derail new product launches, thereby cutting the company’s revenue (Collier& Evans, 2020). For instance, a redesigned version of the Honda subcompact vehicle was recalled five times in 2013, and the CEO had to take a 20% salary cut within three months due to the recalls. There are a number of quality issues that occasion these recalls.

• One of the company’s quality issues is tied to faulty airbags. Authorities have often investigated the company and sometimes found them guilty of using defective airbags in their different vehicle models. Some of their airbags are said to explode and release the debris. However, the issue is not entirely Honda’s doing, but their supplier Takata. The airbag manufacturer has for a long time manufactured faulty airbags.
• Honda vehicle models have also had issues with faulty A/C models. Users have, on many occasions, complained of faulty A/C models that blow warm air instead of cold air. The problem is not new as earlier models such as the 2002 Honda CR-V models had their users complain.
• Another problem is the cracked engine block that characterized the Honda Civics. The cracked engine block led to the coolant leaking, which sometimes caused the engine to overheat. In response to the issue, the company extended the warranty for the affected engine models. The company also compensates for damaged engines that initially had cracked blocks.
• Also, idling vibration for some of Honda’s vehicle models is a concerning issue. The issue affects even the latest models, including the 2015 CR-V model.
• Another production issue regards transmission failures in the Honda vehicle models. The transmission failure is caused by a defective torque converter. Unfortunately for users, the problem comes early (before 90,000 miles), which is quite costly.

References

Collier, D. A., & Evans, J. R. (2020). Operations and supply chain management. Cengage Learning.

SEC. (n.d.). ANNUAL REPORT. Www.sec.gov. Retrieved November 14, 2021, from https://www.sec.gov/Archives/edgar/data/715153/000119312521196757/d24614d20f.htm

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This assignment is completed individually in three parts during the term. It requires you to assume the role of an external operations management consultant to Honda. Your brief is to

• research and analyze information and data about an operational issue affecting the company
• develop recommendations for improvement based on sound operations management concepts
• develop an implementation plan for the proposed recommendations
• demonstrate how the operational improvement will contribute to the organization’s value chain.
• Present your analysis, recommendations, and implementation plan to the company directors.

Part 1.  What’s the Problem?

As an external consultant, the first thing you’ll want to do is to familiarise yourself with the company (Honda), its current situation and the operational problem you’ve been hired to fix.

 Submit your initial research notes (outline and bullets are fine) in a one to two-page document (memo format), which should include

• The name of the company you have selected (Honda)
• Background company information
  • NAICS Code, Legal Structure, Current Executive Management Team, Current Product and Service Lines, Customer Segments served and the current financial state of the company
• the operational issue the organization is currently or has recently experienced.
• Provide a minimum of 2 APA formatted references.

Textbook:

9780357531792
Operations and Supply Chain Management
Collier and Evans
/ Cengage