Honda of America Manufacturing Inc. will tiptoe into its new world auto production strategy early next year in Marysville, Ohio, when it relocates its motorcycle engine line.
Honda is planning to make its auto factories around the world leaner and more flexible over the next several years. The company has revealed few details about how it intends to do that, but has confirmed one element: It will build engines and vehicles under the same roof on synchronized schedules.
But Honda will try out the idea on motorcycles. Late this year, Honda's U.S. engineers will begin pulling motorcycle engine production tooling out of its current site at Honda's Anna Engine Plant in Anna, Ohio, and installing the equipment next to the motorcycle assembly line in Marysville.
'It will be a test case for us,' said Larry Jutte, Honda of America general manager for powertrain and motorcycle operations.
Jutte says the move will allow Honda to reduce inventories, improve quality control and communications, and react faster to orders.
Industry observers believe Honda eventually intends to bring the assembly of several components next to its vehicle assembly lines.
ECHOES OF HENRY FORD
James Womack, an auto consultant and co-author of the new book Lean Thinking, said Honda's strategy is reminiscent of Henry Ford's factory layout in 1913 in Highland Park, Mich. At that time, Womack noted, Ford's method of assembling parts next to the assembly line was the epitome of lean factory flow.
'Nobody's ever done that - well, not since Henry Ford in 1913,' Womack said.
In fact, several automakers are tinkering with the concept. In Resende, Brazil, Volkswagen AG builds commercial trucks in an assembly plant shared with eight major suppliers.
Inside the plant, the engine, cab and chassis are built on separate lines before they arrive on the final assembly line.
And in Hambach, France, DaimlerChrysler is building the Smart car with the aid of key suppliers located on the premises.
Honda's step toward such a model at the Marysville cycle plant foreshadows its plan for a new sport-utility factory in Lincoln, Ala., scheduled to launch in 2002.
In a presentation at the SAE Southern Automotive Manufacturing Conference and Exposition last week in Birmingham, Ala., Jutte said that 'elements of this new system will emerge in 2002.'
Honda is believed to be considering several 'line-side' component subassemblies, in addition to engines. One possibility is truck frames.
MINUTES WORTH OF SUPPLIES
Jutte said that physically moving vehicles and engines together would give the factory better production control. Engine inventories would consist of a few minutes' worth of production rather than a few hours, as is now the case, he said.
It also will put more of the supply chain under a single management team, he pointed out. The managers of a vehicle assembly plant that also contains engines and components would be in the position of managing a large part of the entire supply chain.
The industry is curious about what Honda is up to. One competitor, who asked not be identified, wonders how Honda will justify the capital investment. The proposed Alabama factory intends to build only 120,000 trucks a year.
'I'd like to know how they will justify all the duplicate costs of engine machining if they plan to have a dedicated engine plant at every one of their vehicle assembly plants,' the competitor said.