HONDA (Automobile Industry) 2013

Methodology:
We have administered our final project of total Quality Management as to Honda Atlas. To rise to the challenge we have used following modes to conduct our survey: Questionnaires Personal Interviews

Prior to our meeting with the Raza Ahmed Zaidi, we have made our self made questionnaire in order to dig up important information as to Total Quality Management of Honda Atlas. We floated the Questionnaires among all the employees from top to bottom. They participated actively in our survey for their own companys goodwill. One of the attendants appreciated our survey owing to it rests on the significance of quality for a multinational organization. Moreover, we have used a lot of other resources to enrich our research. We delved into different books as to Total Quality Management for Large Organizations. Also, we exploited the consumption of internet so as to augment our research as to Honda International.

Six basic concepts of Total Quality Management:

Tqm requires six basic concepts: 1. A committed and involved management to provide long term top to bottom organizational support. 2. An unwavering focus on the customer, both internally and externally. 3. Effective involvement and utilization of the entire work force 4. Continuous improvement of the business and production process. 5. Treating suppliers as partners. 6. Establish performance measures for the processes.

Lets discuss each one by one:

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QUALITY POLICY :
At HONDA we are committed to focus all are activities leading to: 1. Manufacturing high quality products. 2. Customer satisfaction. 3. Service to society. 4. Maintain market leadership. Honda atlas cars Pakistan limited is a quality conscious company. Thats why Honda atlas cars Pakistan limited is the first automobile company in Pakistan who has achieved ISO 9002 certification.

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SUMMARY:
Honda atlas cars company is a joint venture between Honda motor company Japan and Honda motor company limited Japan has 51% shares in this joint venture, so the main profit shares as well as designing, development ideas and costs are bear by Honda motor company Japan ltd. In all over the world, engines of almost of all kinds of product Honda is a giant manufactures in the engine industry. Honda produces boats and generators also. Honda atlas cars company Pakistan limited is really well known motor vehicle company. We found no contradiction when we compare the statement of Honda staff with general dealers and customers. Honda atlas cars, especially consumers cars, sells due to brand name of Honda. So Honda is enjoying a sound reputation in the market. Honda cars regarded as # 1 due to high quality engines and several other features. Whereas, the most efficient cars (diesel cars) are being produced by Hondas important competitor Toyota. Honda has contributed a lot in gas efficient cars, by introducing the Honda civic hybrid, stand at # 2 after the Toyota in gas efficient cars. The prices of the few models of Honda atlas cars are lower as compared to the prices of their competitors. Honda atlas cars maintains quality standards. Most of the depreciation is computerized. Products are manufactured according to scientific standards. Honda atlas cars gives priority to consumer satisfaction and it is the constant endeavor of the Honda atlas cars of Pakistan is to

Achieve the # 1 customer satisfaction

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1: What is TQM:
TQM is a management approach to long-term success, through achieving complete customer satisfaction. TQM is the complete approach to improve organizational performance and effectiveness. "A way of life for an organization as a whole, committed to total customer satisfaction through continuous process of improvement, and the contribution and involvement of people" TQM is a participative management style that stresses total staff commitment to "customer satisfaction". TQM is the part management organized for the use of creating and implementing a continuous improvement process that constantly improves on the organization's effectiveness and also their efficiency. The main responsibility of quality lies not on the workers but on the management on all levels.

2: Implication of TQM in Industry:

Success of TQM depends on how well a company evaluates the processes, products, and the markets of today to try and find out what the customer of tomorrow wants. It has been evident from past marketplaces that companies show more support to short-term interests that even if they do have a long-term strategy if often lacks commitment from top management. Implementation and the success of TQM can be seen clearly using the example of Honda. Many other Japanese car manufacturers have also followed pursuit. When trying to implement TQM it requires both behavioral and cultural change. A successful TQM brings together management, behavioral and cultural commitment to customer quality.

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Approaches to Implementing TQM: There are three approaches to implementing TQM. Firstly there is the "concept of management". This basically fine tunes and revitalizes management in producing bottom line products or services resulting hopefully in customer satisfaction. With this approach management and individuals of the organization are usually operating at fairly effective levels and have already taken the idea of TQM aboard. Kawamoto CEO of Honda implemented TQM with the advice from the founder of the company, Soichiro. When TQM was implemented at Honda production lines were reconfigured to speed the process and allow greater flexibility. Engineers were expected to create designs that could be manufactured more efficiently. Honda's new strategy, which the CEO describes as "customer focused", has increased sales and improved profit. The second approach can be seen as a "system of management". This approach is used when TQM is already in place but needs to be brought up to speed. The basic area of this approach is to decide conflict, decision-making, meeting management as well as traditional areas of measurement and continuous learning. With this approach the Q-STEP is used. The Q-STEP simplifies quality into five basic competencies. Q-Quality Maximization, S-Skill Maximization, T-Team Participation, E-Excellence for customers, P-Prevention of waste. The Q-STEP works with existing culture and takes advantage of current "good practices".

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The final approach is usually the most common and is also the cause of most failure. This approach usually aims mainly at changing behavior not culture that drives or supports that behavior. TQM has in the past failed however there here have been many reasons why, but the most common are 1. Lack of management commitment- executives may demand TQM because they may see it as purely a cost-cutting strategy. 2. Poor timing and pacing-organizations sometimes implement TQM when there is no compelling need. 3. Wasted education and training- TQM can fail because organizations are not committed enough on the training of the individual. 4. Lack of TQM concepts being implemented such as Just in Time, Quality Circles and Lean manufacturing. It is a management concept that could help weakening organizations achieves both a competitive advantage over others, as well as increasing sales, customer satisfaction and profit levels; similarly TQM can help a successful company build a better relationship with its customers, supply base and inevitably increase its bottom line. The principal emphasis of modern business with its products and services is quality. The total quality management (TQM) approach is summarized as gradually enhancing the product and/or service quality. The focus is to get things right first time, all of the time. In the long run, the cost of this approach will be less than rectifying quality failures after they have been found. It reflects that TQM relies on the inputs of management, workers, suppliers, and even customers, so as to match these with customer

requirements. In TQM, all manufacturing and business transactions are involved in a continuous process of quality enhancement. Nowadays, TQM has extended from the statistical monitoring of manufacturing processes to customer-oriented processes of service improvement. consistently. Group #2 H.Zeeshan Aslam It emphasizes providing high-quality products or services

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3. HONDA BACKGROUND:
Honda atlas cars Pakistan limited is a joint venture between Honda motor company limited Japan, and the atlas group of companies, Pakistan. The agreements signed between the two sponsors are for technical collaborations for development parts and systems for manufacture of Honda cars in Pakistan. Pakistani and Japanese cultures have blended exceptionally well to form a professional team of dedicated specialist. The company was incorporated on November, 1992 and joint venture agreement was signed on august 1993. The ground breaking ceremony was held on April 17, 1993 and within a record time of 11 months, construction and erection of machinery was completed. The first car rolled off the assembly line on may 26, 1994. Official inauguration was done by president of Pakistan, Sardar Farooq Ahmad khan Leghari. Mr. Kawamoto president of Honda motor company limited Japan also present to grace the occasion. The company is listed on Karachi, Lahore and Islamabad stock exchanges. On July 14, 1994, car bookings started at six dealerships in Karachi, Lahore, and Islamabad since then the dealerships network has expanded and now the company has sixteen 3s (sales, service and spare parts) and thirty 2s (service and spare parts) pit shops network in all major cities of Pakistan. Since the commencement of production in 1994 till march31, 2005, the company has produced and sold over 77,500 cars. All dealerships are constructed in accordance with the standards defined by Honda world over. The quality of local parts is thoroughly checked to meet stringent international standards. Honda always strives to give outstanding service to their valued customers. In addition to providing regular service to customers, the company also regularly conducts service campaigns, to facilitate customer's need for service. This has given customers absolute confidence in Honda cars, clearly evident from the ever increasing sale volumes.

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It is the constant undertaking of Honda atlas cars (Pakistan) limited to achieve no .1 customer satisfactions. Honda atlas cars (Pakistan) limited is committed to meet customer expectations, and to provide good value for money. In 1996 the full model change of Honda civic introduced, after just one and half year of commencement of production. Three models in civic vti, Exi and lxi with 1.6l and 1.5l engines were introduced in vti and exi models respectively. In 1997 Honda city 1.3l car in et and ex models and Honda city exi with 1.5l were launched.

4. Profile of Honda:

Honda headquarters building in Minato, Tokyo Honda is headquartered in Minato, Tokyo, Japan. Their shares trade on the Tokyo Stock Exchange and the New York Stock Exchange, as well as exchanges in Osaka, Nagoya, Sapporo, Kyoto, Fukuoka, London, Paris and Switzerland. The company has assembly plants around the globe. These plants are located in China, the United States, Pakistan, Canada, England, Japan, Belgium, Brazil, Mxico, New Zealand, Malaysia, Indonesia, India, Thailand, Turkey, Taiwan and Peru. As of July 2010, 89 percent of Honda and Acura vehicles sold in the United States were built in North American plants, up from 82.2 percent a year earlier. This shields profits from the yens advance to a 15-year high against the dollar .

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Honda's Net Sales and Other Operating Revenue by Geographical Regions in 2007

Geographic Region

Total revenue (in millions of )

Japan

1,681,190

North America

5,980,876

Europe

1,236,757

Asia

1,283,154

Others

905,163

DIVISION:
American Honda Motor Company is based in Torrance, California. Honda Canada Inc. is headquartered in Markham, Ontario, their manufacturing division, Honda of Canada Manufacturing, is based in Alliston, Ontario. Honda has also created joint ventures around the world, such as Honda Siel Cars and Hero Honda Motorcycles in India Guangzhou Honda and Dongfeng Honda in China, Boon Siew Honda in Malaysia and Honda Atlas in Pakistan. Following the Japanese earthquake and tsunami in March 2011 Honda announced plans to share equally production at its UK plants. The decision was made to put staff at the Swindon plant on a 2 day week until the end of May as the manufacturer struggled to source supplies from Japan. It's thought around 22,500 cars were produced during this period. Group #2 H.Zeeshan Aslam Page 9

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Motorcycles:
Honda is the largest motorcycle manufacturer in Japan and has been since it started production in 1955. At its peak in 1982, Honda manufactured almost three million motorcycles annually. By 2006 this figure had reduced to around 550,000 but was still higher than its three domestic competitors During the 1960s, when it was a small manufacturer, Honda broke out of the Japanese motorcycle market and began exporting to the U.S. Working with the advertising agency Grey Advertising, Honda created an innovative marketing campaign, using the slogan "You meet the nicest people on a Honda. This campaign suggested that Honda motorcycles were made for the everyman. The campaign was hugely successful; the ads ran for three years, and by the end of 1963 alone, Honda had sold 90,000 motorcycles.

VISION AND MISSION STATEMENTS

Basic Principles Respect for the individual. The Three Joys (buying, selling and creating)

VISION
Focusing on satisfaction (customer, associates and shareholders) spirit and flexibility, we are advanced dedicated to with challenging

supplying latest generation cars with of all activities.

tech--neology, greater fuel efficiency and competitive prices, along with

friendly and efficient after sales back up, maintain quality as core

According to Pakistan:
Striving to be a company that society wants to exist by sharing joys with people throughout the world creating products that maximize the joy of customers, with speed, affordability and low CO2

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MISSION (worldwide) "Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction."

Hierarchy of Honda: In Honda hierarchy depends upon the current scenario and situations. They follow both horizontal and vertical line of hierarchy according to the need and demand of the situation. As Honda is Japanese based organization and it follow the structure with few hierarchal levels and narrow span of control i.e. having flat structure. Managerial Roles: The managers at Honda practiced in all directions either they continuing in doing all perspectives of managerial jobs i.e. organizing, planning, leading and controlling. Honda arrange training session for their managers for their penetration in the system become polished i)Planning. In planning, the managers at Honda set the specific goals to achieve their task and decide all alternatives how to best achieve them. E.g. whenever they plan to import Accord Civic and any other model, they set the goals that how it can be suited to our environment. ii)Organizing In organizing managers at Honda allocate and arrange human and non-human resources so that their plan can be carried out successfully. Like it allocate the machinery and advanced technology in production unit . Group #2 H.Zeeshan Aslam

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iii)Leading At Honda Labours and subordinates to get optimum task achievement even by satisfying them accordingly. iv)Controlling Hondas manager regulates organizational activities so that actual performance conforms to expect organizational standards and goals e.g. Hondas goal is to achieve customer satisfaction ratio so that can evaluate overall performance of their after sales service centre regularly. Organizational Culture Hondas organizational culture is a beauty in itself. All members, all employees are in production department having the same shirts and caps with Hondas logo. Organizational culture is also called as corporate culture. It represents the internal culture of the organization.

6. Quality System of Honda:

Building a rapid market quality enhancement system around a Quality Center that centralizes customer feedback 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 Group #2 H.Zeeshan Aslam Page 12

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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.

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Aggressively ensuring quality in both design and manufacturing Working in partnership with suppliers, Honda is involved in a companywide effort to deliver products with a new level of enhanced quality. To ensure high quality, Honda conducts aggressive quality assurance activities from the dual perspectives of design and manufacturing

1. Assuring quality through drawings Honda's R&D departments create drawings for maximum ease of manufacture in order to limit process variability and prevent human error during the manufacturing process. These drawings serve as the basis of our quality assurance efforts. Specifically, engineers utilize a database of measures and techniques for preventing past market quality issues and other information as they communicate closely with manufacturing departments during the initial development stage. Group #2 H.Zeeshan Aslam

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2. Assuring quality through production processes Honda's production departments establish manufacturing control items and standards for each part, process, and work task based on designers' intentions in order to prevent product quality issues. Engineers then use these manufacturing control items and standards to verify manufacturing variability as they work to prevent quality issues. 3. Assuring part quality through supplier audits Assuring the quality of procured parts is an important element in delivering high-quality products. Honda visits its suppliers' manufacturing facilities to conduct quality audits based on the "Three Reality Principle," which emphasizes "going to the actual place," "knowing the actual situation," and "being realistic." These audit activities are conducted for both the production preparation and mass-production stages of supplier operations. Experts in the development and production of individual parts visit manufacturing facilities and conduct audits of suppliers' quality systems and their implementation.

Honda then works to improve part quality through activities that emphasize communication with suppliers, for example by sharing audit results and cooperating to discover measures for improving quality.

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Using second-generation line end testers (LETs) to inspect electronic control systems

Use of electronic control systems in vehicles has grown dramatically in recent years as part of an effort to achieve more environmentally friendly designs and improve driver and passenger convenience and comfort, creating a need for efficient inspection methods to assure the quality of these components.

To this end, Honda has installed line end testers (LETs), an inspection and diagnostic system developed in-house, at production plants in Japan and overseas.

7. Tools/Techniques for TQM In Honda:

ENVIRONMENTAL POLICY: HONDA ATLAS CARS (PAKISTAN) LIMITED, being responsible member of society considers the preservation of the global environment as a crucial concern reviewed on 30th June, 2004.Our environmental philosophy is firmly based on the following guidelines.

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Recognize the impacts of the significant aspects on the environment resulting from our activities, products and services.

Operate in compliance with relevant environmental laws, regulations and other requirements that apply to our activities.

Create environment friendly attitude among associates.

OTHER BUSINESS PRINCIPLES OF HONDA:

Following are different policies &principles of Honda namely: MANAGEMENT POLICY:(respect, man power importance, 3s spirit, 3A hand on approach, be a corporate citizen). CORPORATE POLICY: (ideal working environment , adequate return to share holders, dynamic marketing &manufacturing). PRIORITY STANDARDS OF CONDUCT:(safety ,quality ,productivity). Group #2 H.Zeeshan Aslam

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HUMAN RESOURCE :(hiring competent associates ,providing opportunities for internal mobility through personal training and development, enabling them to take higher position). SAFETY ,HEALTH AND ENVIORMENT:(comply with applicable Govt. requirements, avoid risks to human health ). OPERATING PRINCIPLES:(always keep the dead line, never make excuses, team work).

8.Product Excellence and Innovation:

In order to provide better product, excellence and innovation Honda motors provide their strategies in a appropriate way of manner to maintain their market supremacy in all over the era with several TQM procedures. Human Capital: Atlas Honda Limited is committed to create a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of the company.

It is an equal opportunity employer which recruits, employs, promotes and offers career Group #2 H.Zeeshan Aslam

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advancement to employees on the sole basis of merit, skills, ability and qualification needed for the work to be performed.

It is committed to create an organizational environment in which individuals are fairly treated, encouraged and empowered to contribute, grow and develop themselves and help to develop each other, and therefore achieve excellence in their performance. Consumers: Atlas Honda Limited is committed to provide branded products and services, which consistently offer value in terms of price and quality. Products and services are accurately and properly labeled, advertised and communicated.

It actively promotes safe practices throughout value chain- from distributors to end users. It is committed to provide customers with products and services that are safe and reliable. Business Partners: Atlas Honda Limited is committed to establish mutually beneficial relations with its suppliers, customers and business partners. In its business dealings it expects its partners to adhere to business principles consistent with its own. The Environment: Atlas Honda Limited is committed to making continuous improvements in the management of its environmental impact and to the long-term goal of developing a sustainable business. It will work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice. Innovation: Atlas Honda Limited makes innovations to meet consumer needs. It respects the concerns of consumers and of society. It works on the basis of sound research, applying high quality standards.

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Competition: Atlas Honda Limited believes in fair competition and supports development of appropriate competition laws. Atlas Honda Limited and employees will conduct their operations in accordance with the principles of fair competition and all applicable regulations

9. Customer Satisfaction:

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CUSTOMER SERVICE CENTERS:

All the authorized dealerships in Pakistan are a source of customer satisfaction. To facilitate the customers for any assistance they require, we have a separate department, called Customer Relations, at the head office. This department is supported by the subsequent Customer Relations Officers at all dealerships. The purpose of Customer Relations Department and Customer Relations Officers is to enable our customers in getting any sort of help required by them.

FREE SERVICES:
Honda is a customer service conscious company, for which it is always looking for avenues to develop further relations with the customers who have already purchased the cars. We consider purchase of car as the beginning of relations with customers. To prolong this relationship and encourage the customers to keep on coming to the dealership, to get theirs cars maintained the HONDA way we provide three FREE CHECK-UP SERVICES to our customers. These are basically three periodic check-ups at 1,000 Km, 5,000 Km and 10,000 Km mileage which are normally done after 1 month, 3 months and 6 months of running the car. Other than providing service to customers another reason for this facility is to stress on the importance of periodic maintenance. For these free services the labor is not charged, where as the customer has to pay for only the consumable like engine oil, oil filter, etc..

REPAIR AND MAINTENANCE:

Honda is providing regular trainings to the dealers' technicians. The trainings cover all aspects of the cars including the periodic maintenance, diagnostics, trouble shooting and repairs according to HONDA standards. From this we want to facilitate the customers in maintaining their cars in top-most condition and enjoying the comfort and Group #2 H.Zeeshan Aslam Page 22

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performance of the luxury vehicles they own. It is our effort to have uniform service standards made available at all dealerships in accordance with the international Honda standards.

ANNUAL SURVEYS:
HONDA ATLAS CARS PAKISTAN LIMITED arranges the annual surveys in which different activities are done: 1. Customer Satisfaction 2. Market Share 3. Customer Choice a. Reading Habits b. TV Watching Habits 4. Brand Survey 5. Social Group

6. Education Level 7. Market Trend

10. Products, Features and Design:

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SWOT ANALYSIS:

STRENGTHS:
The image of the company is well established.

HONDA is offering comfort, power and style with its vehicle.

It delivers the genuine parts with the 6 month unique warranty.

It uses latest technology and luxurious interior in the vehicles.

Enjoying 55 to 60% market share at present

Japanese technology

WEAKNESESS:
The booking procedure is too long, as it takes done 6 months to get the orders delivered. Less Participation in Small Towns Paying big royalty to Japanese Availability of substitutes

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OPPORTUNITIES:
The HONDA Company can expand the network of its distributors all over Pakistan.

Opportunities for export in the developing countries

Low quality of Chinese

Growing market

THREATS:

A threat is in the form of premium which the distributor are taking from the customers and thus disturbing credibility of Honda about stability of prices.

The economic environment is characterized by more uncertainty and it respond more to the international scenarios.

Political instability, Govt. Taxes and Chinese companies are a threat.

Bad economics situations

Increased prices of petrol

Availability of cheap Chinese spare parts

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SUGGESTIONS:
After visiting this organization and go through our analysis we are at the position to give some suggestions:

HONDA ATLAS CARS should add more product line because it can cash its reputation. HONDA ATLAS CARS should explore new market. HONDA ATLAS CARS should work on the more improvement in its product line .i.e. cars (both city and civic), generators, and boats. HONDA ATLAS CARS should improve in producing the gas efficient cars. HONDA ATLAS CARS conducts its business responsibly in a way to make sure Health, Safety and Protection from the environmental aspects of its associates and the society. System, procedure even it should about after period modification to make them stylish and according to the trends of the market. Need to improve newspaper advertisement format and style. Inform current opportunities for job, internships etc.

Appendix:

Q1:

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