What Is Honda Relationship With Suppliers?

Honda concentrated on establishing and then expanding its assembly operations, while carefully probing the capabilities of domestic suppliers. Honda has established new auto manufacturing facilities in Mexico and increased exports to Central and South America . Suppliers in the car industry have very little power. In fact quite the opposite is true they are at the mercy of the manufacturer. The importance of avoiding suppliers that fix their own terms because they are the only supplier of the produce. Honda Motors has addressed this situation in rather interesting way. Honda does not have long term relationship with its suppliers. Honda does not organise its own suppliers association as most Japanese firms normally do. Interestingly Honda has investments in its suppliers and at times will directly intervene with internal activities, such as purchasing the raw materials. Its relationship with suppliers is clearly different from the traditional.
The current supply management strategy reflects Honda's long-term goal of
Honda is the largest manufacturer and seller of motorcycles in the world and the eight largest automobile producers. Of course, low price and production capacity also play a role in the decision making process. Some of the factors measured include or involve Quality, Cost, Delivery, Product Development, and Management's willingness to make changes requested by Honda. In the United States, the Big Three automakers have generally maintained non-exclusive and arms length arrangements with suppliers. Under a highly regimented supplier review process, vendors are evaluated by the purchasing department using a scorecard. Also, the fewer suppliers the lower procurements costs tend to be and the less variation in the quality and tolerances of components manufactured for sale to