8.29.2008

Honda’s Flexibility Works to Its Advantage

Because lean as we know it today is almost synonymous with the Toyota Production System, lean discussions of the auto industry tend to focus on the contrast between Toyota and the U.S. automakers.

As a result, we sometimes overlook another company that can provide some lean lessons: Honda.

An
article in The New York Times this week notes that U.S. auto sales for the first seven months of this year are down 11 percent overall, with most major automakers – including Toyota – posting declines.

But Honda sales were actually up by three percent.

Is that primarily because of lean? No. It is primarily because Honda has always focused on building fuel-efficient, environmentally friendly cars, and has never made full-size pickups or SUVs.

In today’s economy, with gasoline now close to $4 per gallon, Honda can barely keep up with demand. Sales of its four-cylinder Fit are up 79 percent so far this year.

But the article, written by Bill Vlasic, notes that Honda is flexible. And being flexible – a lean characteristic – certainly helps.

Unlike many other automakers, Honda has been able to capitalize on the switch in demand to cars because of the flexibility of its assembly plants.

At Honda’s plant in East Liberty, Ohio, for example, the assembly line can switch almost seamlessly from Civics to CR-Vs.

The article doesn’t mention lean. And lean thinking may not be as deeply embedded in Honda’s DNA as it is in Toyota’s. But it’s there – and it makes a difference.

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