final project analyze the supply chains of honda vietnam

This project looks at the supply chain process of Honda Vietnam, the group does the project by looking for the data that provides the latest information and is reliable.. The project inc

U E H COLLEGE OF BUSINESS UNIVERSITY School of International Business — Marketing

Operations and Supply Chain Management

Final Project

“Analyze The Supply Chains of Honda Vietnam”

Class code: 22C1BUS50313502

Class : IBCO5 — K46

Phạm Thiện Nhân 31201023585 nhanpham 31201023585 (@st.ueh.edu.vn

Nguyễn Thái Nguyên 31201023259 nguyenguyen.31201023259@st.ueh.edu.vn Tran Thanh Thúy 31201027114 thuytran.31201027114@st.ueh.edu.vn

WORK ROSTER AND RATIO OF EACH MEMBER'S CONTRIBUTION

TABLE OF CONTENT

WORK ROSTER AND RATIO OF EACH MEMBER'S CONTRIBUTION TABLE OF CONTENT

TABLE OF TABLES SUMMARY 1 OVERVIEW OF THE INDUSTRY AND HONDA

1.1 Vietnam motorcycle industry 1.2 Enterprise: Honda Vietnam Co., Ltd 2 HONDA DOMESTIC SUPPLY CHAIN PROCESS

2.1 Information flow 2.2 Product flow 2.3 Cash flow 3 ACTIVITIES IN HONDA’S DOMESTIC SUPPLY CHAIN MANAGEMENT - SCOR FRAMEWORK

3.1 Plan 3.2 Source 3.3 Make 3.4 Delivery 3.5 Return 4 RECOMMENDATION

4.1 Honda's supply chain development directions 4,2 Honda’s practical solutions

20 20 21 4.2.1 Many changes in world politics lead to effects on the production and supply

process of many products 4.2.2 Practical solution to enhance JIT process in HONDA supply chain

21 22

5 CONCLUSION 5.1 Effectiveness of Honda supply chain m: 5.2 Role of supply chain for Honda REFERENCE

Too long to read on your phone? Save to read later on your computer

[J Save to a Studylist

27

TABLE OF TABLES Table 1 Motorcycle lines including scooters, gear cars, clutches and sports cars

TABLE OF FIGURES Figure 1 Motorcycle sales in Vietnam from 2017 to 2021Error! Bookmark not defined

Figure 3 Distribution System Structure Of Honda Vietnam 18 Figure 4 In terms of the distribution process 18

SUMMARY Strategic managers often use supply chains as a means of connecting various sectors of an organization or a nation’s economy This project looks at the supply chain process of Honda Vietnam, the group does the project by looking for the data that provides the latest

information and is reliable

The project includes 5 main contents analyzing Honda Vietnam’s supply chain process, which has direct business activities manufacturing throughout the territory of

Vietnam

In the overview part, the group provides information about motorcycle sales in Vietnam and compares the percentage of market share The group also introduced Honda Vietnam - one of the largest motorcycle manufacturers in Vietnam

Next, a figure was analyzed in order to clarify the 3 flows of the Honda Vietnam supply chain The domestic supply chain generates 3 flows, which are product flow, information flow and money flow

The project uses SCOR framework embracing Plan, Source, Make, Deliver and Return The 5 factors of Honda Vietnam are presented to analyze and clarify some issues and risks that the enterprise is confronting such as: How does Honda plan? How is Honda sourcing ? What orientation should Honda apply to reduce time? or How to make a return policy convenient?

According to Honda's strategy, the group discussing the development orientation of Honda is JIT Gust in time) In addition, the group also makes some recommendations about transportation, suppliers and minimizing risks to peruse the supply chain development

orientation

In the last part, the group concludes the effectiveness of Honda supply chain management Besides, the group emphasizes the role of the supply chain of Honda such as employees, improves the workflow, boosts production and sustainable development

1 OVERVIEW OF THE INDUSTRY AND HONDA 1.1 Vietnam motorcycle industry

Figure I Motorcycle sales in Vietnam from 2017 to 2021 4.000.000

3.586.097

3.254.964

a 2252 2.000.000

The decline in motorcycle consumption due to the impact of the Covid-19 outbreak is part of a downward trend in the vehicle business Although feeling a decrease, Vietnam is still the second largest motorcycle consumption market in Southeast Asia, after Indonesia A total of nearly 5 million motorcycles have been sold by Indonesian manufacturers As a result, Indonesia now consumes twice as many motorcycles as Vietnam does Thailand, with

more than 2.2 million vehicles sold in 2021, comes in third

Among the many motorcycle brands that are manufactured and sold in Vietnam Honda is still the first choice of Vietnamese people when choosing nearly 2 million motorbikes sold in Vietnam are Honda-branded in 2021, up to 80%, equivalent to nearly 2

million vehicles

Honda Vision is the best-selling line with sales in 2021 reaching 490,613 vehicles Honda Wave Alpha model is also overwhelming with 376,514 vehicles sold (Ba Hung, 2022)

1.2 Enterprise: Honda Vietnam Co., Ltd Established in 1996, Honda Vietnam is a joint venture between Honda Motor Company (Japan), Asian Honda Motor Company (Thailand) and Vietnam Engine and Agricultural Machinery Corporation with 2 industries Main products: motorcycles and cars Honda Vietnam has been operating in Vietnam for almost 26 years and has grown steadily to become one of the top motorcycle manufacturers as well as a reputable automaker in the country Daiki Mihara has been the new CEO of Honda Vietnam since the first of April, 2021 He manages more than 8,300 employees and 3 factories, two in Phuc Thang, Phuc Yen, Vinh Phuc and one in Dong Van, Duy Tien, Ha Nam, which produce 2.5Mil motorcycles a year (Honda Vietnam, 2022) Besides, Honda Vietnam also has a Gear workshop and Piston workshop

With the slogan “The Power of Dreams” Honda Vietnam is pleased to offer customers top-notch goods, committed services, and contributions to a civilized traffic culture Honda wants to make new joys for people and society in order to share and realize dreams with everyone

Honda brings to Vietnam four types of motorcycles:

+ Digital: Wave RSX FI 110, Wave Alpha 110cc, Blade 110, Future 125 FI, etc + Motorbike: Air Blade 125/160, Vision, Sh mode 125cc, etc

+ Hand Truck: Winner X, CB150R The Streetster, CBR150R, etc + Motorcycle: CB650R Version 2021, CB500X 2022, CBRS00R 2022, etc

mm ng Si: mị CO

3) Lpy

tý)

2 HONDA DOMESTIC SUPPLY CHAIN PROCESS

Figure 2 Honda Vietnam production flow

¢ VIETNAM 7 ae e manufacturer - Vinh Phuc «| Store authorized by Honda - Su

- Nittan VietNam * The second motorcycle > EAD Customer

2.1 Information flow

Information flow: Delivery and receipt flow of orders, tracking the movement of goods, documents between buyers and recipients, representing two-way and multi-way information exchange between members, resulting in connecting resources participating in the supply chain, helping the supply chain operate efficiently

Information flows from the supplier to the manufacturer, then distributed to the point of sale and finally to the customer

In there,

“+ Supplier - Japan - Thailand - China - Vietnam: Nittan Vietnam Company (joint venture between Thailand and Japan),

Innotek Joint Stock Company, Nissin Company “+ Manufacturer

- 3 motorcycle manufacturers: 2 factories in Vinh Phuc and | factory in Ha Nam

- There is also a gear workshop, Piston factory, s Distributors

- Currently, the HEAD system has been developed to 63 provinces and cities across the country, with more than 780 stores

«+ Customer: - Direct to the consumer - the end customer - Corporate sales: Agency/Organization/Company/Enterprise Minimum purchase

quantity per order is 10 cars or more

Besides, Honda also uses e-commerce and telecommunications to build direct

relationships with customers Through this system, customers can fine-tune the product to their liking and send it to Honda Vietnam's customer service center

2.2 Product flow The product supply chain of Honda Vietnam goes through 6 steps, including: The first step is from the primary supplier of raw materials, to the second step is the second-tier supplier of semi-finished products, to the third step is the manufacturer, the dealers are authorized by Honda, to step 4 are supermarkets and finally the end consumer

Honda Vietnam’s raw material supplier consists of more than 110 enterprises with about 20% of enterprises using 100% Vietnamese capital The rest is handled by foreign-

invested companies from Japan, Taiwan, Korea, Thailand

— Japan: provides the most important motorcycle components related to the engine

and transmission such as cylinders, pistons, shafts, shafts

— Thailand: provides a part of the above important components and cylinder box, carburetor, oil pump

— China: providing other components such as lights, mirrors, machine cases — Vietnam: Some parts are directly manufactured by Honda Vietnam and its members in Vietnam, while other companies only supply non-important spare parts such as tires, tubes, bearings and some plastic details

Some of the company’s suppliers include:

— Nittan Vietnam Company (a joint venture between Thailand and Japan) specializes in supplying Honda with energy-saving and environmentally friendly car and motorcycle engine valves

— Innotek Joint Stock Company specializes in manufacturing Honda spare parts for automobiles, motorcycles and supporting industries

— Nissin Company is a 100% Japanese-owned company, a supplier of brake components for motorcycles and automobiles for the Vietnamese market and for export, in which exports to Honda account for about 50% of the total number of goods supplied supply

to the domestic market

© Motorcycle manufacturers Honda has 12 factories around the world with operations in 150 countries, so it needs effective supply chain management to be able to ship products from the factory to different parts of the world After the raw materials are transported from the suppliers, they will go to the manufacturing plant and produce the finished product In Vietnam, Honda has 3 motorcycle factories voi cong suat 2,5 triệu xe máy một năm theo thống kê từ website chính thức của Honda (Honda, 2022) Specifically:

— The first motorcycle factory: The first factory is located in Phuc Yen, Vinh Phuc, which is considered as one of the most modern motorcycle factories in the Southeast region, with a production capacity of 500 thousand vehicles/year

— Second vehicle factory: Located in Phuc Thang, Phuc Yen, Vinh Phuc, including 4030 employees, capacity of 1 million vehicles/year

— The third vehicle factory:: The factory located in Duy Tien, Ha Nam is designed towards the goal of being friendly to the environment and people, with a production capacity of | million vehicles/year

e Retailers Honda Vietnam's products are mainly bulky, high-value goods, which are means of transport that need to be tested, so they are mainly distributed through Honda stores, supermarkets and dealers Honda mainly supplies company products to Honda-authorized

stores, Head Honda, in 63 provinces In addition, Honda also distributes to private dealers,

these stores present in provinces and cities across the country with an abundant quantity, enough for consumers to freely choose the products that best suit their needs

10

® Cusfomer

Currently, Honda not only focuses on traditional customer groups, which are agencies/organizations that buy cars according to the state budget, foreign diplomatic representations/agencies/organizations in Vietnam, companies/enterprises, etc The company has promoted the production of models that are suitable for the needs of young people, because most young people now have a need to own a motorbike for work as well as the general trend Honda also pays attention to distributing products to dealers and shops to suit

the situation in families 2.3 Cash flow

The transfer of funds from the customer to the supplier is referred to as money flow Typically, the customer pays and the money is transferred back to the supplier after the customer receives and inspects the product Occasionally, money moves in the opposite direction—from the supplier to the customer—in the form of a debit

The money flow runs from customers back to GS and Corporate Sales, then its money go back to Retailers when they received finished motorcycles Similarly, Honda Vietnam has to pay cost to suppliers, so it makes the money flow back to suppliers

Money flow is in opposition to material flow because it is a payment that must be made for goods and raw materials Typically, cash flow comes after material flow

Furthermore, the logistics chain involves a significant amount of capital The goods kept in warehouses and intermediate terminals are a capital asset Additionally, a sizable amount of capital is invested in the transported goods Costs associated with transportation and storage are significant cost factors

In this context of Honda, logistical costs can be divided into: transport costs, storage costs, administration costs and capital costs

11

3 ACTIVITIES IN HONDA’S DOMESTIC SUPPLY CHAIN MANAGEMENT - SCOR FRAMEWORK

Honda has correctly defined "Brand For What,” "Brand For Whom,” and "Brand

Against Whom" when it comes to positioning strategy With the ambition to successfully compete with rivals like Yamaha, Suzuki, and SYM, Honda motorbikes specifically strive to address the demands of two categories of middle-class and high-class consumers by providing transportation with the product and service features indicated above in the identity strategy Yamaha is regarded as Honda's primary competitor in the current motorbike market brand rivalry in Vietnam Honda in the Vietnam motorbike industry has proven its outstanding success in terms of the brand growth and model line extension strategies For its

high-end scooter line clients, Honda has introduced a number of SH, Winner, and Air Blade scooter models to the Vietnam market For middle-class customers, Honda has introduced Lead, Dream, Future, and Wave scooter models from the Cub series Honda Motorbike has

put in place the necessary methods to boost its growth in both urban and rural markets in accordance with the preferences and financial circumstances of Vietnamese clients Through the table 1, it can be seen that Honda is leading its competitors in the number of motorcycle products:

12

Table 1 Motorcycle lines including scooters, gear cars, clutches and sports

cars are sold in Vietnam

Producer Product name/type

Honda Vietnam Co., Ltd Wave Alpha 110cc, Blade 110cc, Wave RSX FI 110cc,

Future 125cc, Super Cub C125, VISION 110cc, LEAD 125cc, Air Blade 125cc/160cc, SH Mode 125cc, PCX

150cc, PCX HYBRID, SH 125/1501, SH300i,

WINNER X 150cc, MSX 125cc, Monkey, Rebel

300/500, CBS500F, CB500X, CBRS500R, CB650R, CBR650R, CB1000R, CBR1000RR-R

Fireblade/Fireblade SP, Gold Wing, Africa Twin

Suzuki Vietnam Co., Ltd Thunder S, Revo 110, SkyDrive 125, Axelo 125,

Viva 115 FI, Hayate 125 FI, UA125, Impulse 125 FI, Address 110 FI, Raider R150 FI

SATRIA F150, G2150, GD110, GSX-R150, GSX-S150, BANDIT150, GSX-S1000, V-

Strom 1000, V-Strom 1050, Intruder150,

Burgman Street, Gixxer 250

SYM Vietnam Co., Ltd Elegant 50cc, Galaxy 50cc, Angela 50cc, Elegant

110cc, Galaxy 125cc, Angel 125cc, Star SR

125cc, Star SR 170cc, Passing 50cc, Elite 50cc, Atila 50cc, Attila 125cc

13