Honda Motor Company Ltd. International Purchasing Division

Questions for Discussion:

1. How does Mr. Honda's history with suppliers relate to Honda's current supply management strategy?

2. Why is purchasing so important at Honda?

3. How does purchasing rank in the corporate structure at Honda?

4. How is Honda organized globally? How does this help/hinder the purchasing function at Honda?

5. What are the key elements of Honda's supplier evaluation policy? How does it differ from others (e.g. the Big Three)?

6. What is Honda's policy on new product development and supplier involvement? How does it differ from other automotive companies?

7. Does Honda support local sourcing from domestic suppliers? What are the advantages / disadvantages of this approach?

8. Honda's policy and commit to long-term relationships has been criticized as being "too loyal", and Honda will go to "ridiculous lengths" to maintain a supplier relationship before severing ties. What do you think about these criticisms?

9. The "keiretsu" system in Japan has been described as having advantages and disadvantages. Does Honda have a keiretsu (answer: no, not really)? What are advantages of a keiretsu? Discuss the case of Nissan: their keiretsu is breaking up under ownership by France's Renault. What do you think this means for Japanese buyer-supplier relationships in the automotive industry?