Honda and its suppliers — partners for life
Comments from Jim Phillips, general manager, purchasing division for Honda Canada Manufacturing Ltd., on being a Honda supplier: "It's crucial to understand that we form a relationship for life. We m...
Comments from Jim Phillips, general manager, purchasing division for Honda Canada Manufacturing Ltd., on being a Honda supplier:
“It’s crucial to understand that we form a relationship for life. We make that commitment up front, and as long as the supplier stays competitive, the business is theirs to lose.”
“We don’t hold open quotes. We evaluate suppliers based on QCDDM — quality, cost, delivery, development and management. We select suppliers that we have a relationship with, or a supplier that has intrigued us with a new technology.”
“We’re not an easy customer. Our requirements for documentation and continuous improvement can weigh quite heavily on a supplier, and we’re quite demanding in the area of lead time. We continue to refine a design right up to the launch, and then we go right into mass production. Plastic parts seem to be easiest to modify if we need to correct a problem, so there’s many last minute changes just before we go into mass production.”
“For moldmakers, we expect them to shorten development time and to be able to make changes very quickly. Most of our tooling is made in Japan, but we are trying to move more tooling jobs to North America. The sticking point is that our Japanese toolmakers can build tools in 12 to 14 weeks. Moldmakers will have to make a conscious effort to change, but for a small amount of initial business, few may be willing to do that.”
“We like our suppliers to grow as we grow. Consider, for example, one supplier who makes jacks for us. Six years ago they had only 5% of our jack business. With each model change, their share has grown, and now they have 80%, worth about $6 million.”
Phillips discussed Honda’s sourcing practices with attendees of a recent CPIA Mould Makers Council meeting. The group toured Honda’s Alliston, ON, manufacturing plant. He noted that most plastic part sourcing decisions are made by Honda’s North American cost planning group in the U.S., while mold purchasing decisions are generally made by the Tier One part supplier.