Introduction
In the current market, operational efficiency and Sustainability are vital aspects of managing any business. Both have now moved from an ethical focus and have turned out to be strategic imperative since they are essential for the success of every company. It is clear sustainabilityil to hold Sustainability and operational efficiency in high regard are likely to lack inance in their brand as compared to organizations that prioritize the two. When a company is said to have sustainable practices, it means that it focuses more on meeting the current needs without compromising the ability of the future generation to also meet their needs. Thus, the concept of Sustainability in business involves engaging in activities that minimize the environmental impact of operations, promoting social responsibility, and conserving resources. One of the main reason most businesses have been prioritizing Sustainability is because improves brand name, cuts down on costs, and most importantly, cut down the general company costs. Operational efficiency is majorly utilized by the businesses to remain competitive in the market. Currently the level of competition in the market is very high. In this regard, the companies ought to minimize on waste, optimize processes, and maximize productivity. Operational efficiency thus, involves finding out areas where processes need to be streamlined, cut down costs and improve more on quality. This paper will seek to use the existing evidence and literature, different Sustainability and operational efficiency frameworks to write a portfolio of Honda company with the main focus on Sustainability and operational efficiency.
Company Overview
Honda Is a multinational company which was founded in 1948 by Soichiro Honda. The multinational headquarter is in Tokyo, Japan with its major specialization in the production of motocycles, automobiles, and power equipment’s. The corporation produces hybrid vehicles, trucks, SUVs, and also passenger cars. In addition to these, Honda produces power equipment such as generators, snow blowers, and lawn mowers. While Honda is the leading MNE in the production of motocycle , most of its annual sales results from automobiles as compared to motorcycles. Notably, in 2022 only Honda sold 21.1 million cars with 4.1 million being the autos. It is worth noting that despite its major success in production and big market share it enjoys across the globe, Honda holds Sustainability in high regard. Since the company was started, it has over the time worked to provide numerous of value from a high perspective with an aim to develop a better society that is founded on environmental sustainability ideas, values, and technologies. Over the years the company has implemented a number of initiatives in an effort to cut down the environmental impact .
Sustainability Perspective
For the longest, Honda has worked hard to promote Sustainability through its operations. As a responsible member of the society at large whose work is to ensure that the environment is preserved, Honda has always made efforts to contribute to the preservation of the world economic environment and human health in every step of its manufacturing activities. The company has a very strong sustainability perspective and aims to achieve this through its operations and its end products which have market across the globe. In this portfolio, many key points will be discussed below to clearly show Honda’s sustainability perspective.
Honda’s New Environment and Safety Target by 2050
As one of its effort to achieve environmental Sustainability in its production while still creating sustainability awareness, Honda aims to zero traffic collision fatalities by the year 2050. A new automated valet parking system and an omnidirectional ADAS camera are two of the new innovations that were displayed at the 2019 Consumer Electronics Show (CES) in Las Vegas by Honda Corporation. The omnidirectional ADAS camera turned out to be the major breakthrough in the company’s efforts to try achieving zero traffic collision fatalities. The capability of this camera is I n the detection of cyclists and pedestrians from a wide range of angles, which makes it easier for the drier to avoid collisions. With this camera, there is advanced recognition of images that is likely to detect traffic lights, road signs, and other vehicles on the road.
Another innovation that Honda worked on to achieve zero traffic collision fatalities is the new automated valet parking system. Through this system, the drivers can park their vehicles in designated areas where the car will use a combination of sensors, cameras, and advanced navigation technology to park automatically. Normally, parking is a hard task to some of the drivers . Due to this most of the collisions happen during parking and thus, development of valet parking system reduce such risks.
The promise and commitment by Honda to attain the zero traffic collision fatalities by 2050 is just part of the broad companies efforts to promote Sustainability. Through innovation and coming up of new technologies that cut down the environmental impact of its vehicles
New Mobility Services
Honda has come up with new mobility services as a way of reducing traffic congestion, greenhouse emissions, and pollution. One of these ways Honda has developed is car sharing and ride sharing. Honda is promoting this idea by encouraging persons to make use of alternative means of transport which are environmental friendly. Honda has gone ahead to develop a variety of hybrid and electric cars such Honda Accord that are designed In a way that they are fuel efficient and friendly to the environment. Further, they help cut down the cost of transportation. Car sharing and ride sharing also reduce congestion since parking spaces demand goes down which then frees up some of the spaces in the urban areas. Therefore, this idea by Honda is very viable and a great step in the direction towards environmental Sustainability
Carbon Neutrality
Honda Corporation has for the longest committed to be carbon neutral by the year 2050. In order to ensure that these goals are attained, the company developed many initiatives to enhance Sustainability. For instance, Honda has electrified some of its vehicles and has promised to release more electric vehicles such as Honda Prologue which is expected to be launched in the year 2024. Notably Honda prologue will be the first complete electric SUV meant for the United States market. According to Honda 2021 sustainability report, the company became the first Japanese vehicle to win the German car of the year award (Honda, 2021). The Honda electric car was declared as the first German car of the year after a series of panel tests and reviews that were decided by Jury of leading German car Journalist. Some of the elements that were tested include the level of innovation used in its manufacture, driving characteristics and usability. It was then selected at the top of the new energy and performance category (Honda, 2021). This is just an example of the milestones Honda corporation is making in its efforts to achieve Sustainability through attainment of carbon neutrality. The corporation has also committed in battery technology and infrastructure which is meant to support the growth of electric vehicles market. Its partnership with general motors will produce battery technology and also build a new battery recycling facility in the United States. These proactive approaches will eventually reduce carbon food print and enhance Sustainability across the globe.
In its effort to achieve carbon neutrality, Honda has focused on utilizing renewable in its operation a promote Sustainability across the globe. Its use of renewable energy in its operations is basically part of Honda’s corporate responsibility (CSR). Its effort to utilize renewable energy such as solar and wind power aims to achieve carbon foot print reduction and contribute in the fight against climate change. For instance, Honda has gone ahead to do installation for solar panels in its facilities of operations which will be an alternative way of generating energy. The American manufacturing plant in Ohio has been installed with a solar array of 4000 solar panels which majorly generate 13 million Kilowatt0 –hours of electricity on an annual basis. Similarly in its Indiana manufacturing plant, Honda has installed a solar power system that has around 19800 solar panels. These solar panels generally produce at least 10% of the Indiana plant’s annual electricity. Notably, the company has also entered into major longterm contracts that will help in buying wind and solar power. A good example is Honda’s power purchase contract with the wind farm in Oklahoma. Through this contract at least 120000 megawatts hours of wind power ought to be purchased on an annual basis. This is around 60% electric needs of the manufacturing plant located in Indiana. All these efforts to engage renewable energy in its operations shows that Honda unapologetically prioritizes Sustainability as part of its major goals.
Reduction of greenhouse gas emissions is another effort by Honda to attain carbon neutrality and promote Sustainability. Notably, the manufacturing company has set a target to cut down its greenhouse gas emissions from its operations and end products by at least 50% by the year 2050 as compared o the 2000 greenhouse gas emissions levels. In order to achieve this goal, Honda has come up with various strategic policies and developments. For instance the company has over the recent years been developing fuel efficient vehicles. In fact, its brand is mostly known for its manufacture of fuel efficient vehicles. However, to meet the reduced gas emissions target, Honda ought to invest more on research development and innovation. The company target to have fuel efficient vehicles where more efficient engines are developed. Further, Honda look into increasing the hybrid technology where it can expand its production of hybrid vehicles that have a combination of gasoline engine with electric motor which will increase fuel efficiency (“American Honda Motor,” 2021). Additionally The company aims to improve aerodynamics which can improve fuel efficiency.
Another effort by Honda to achieve carbon neutrality working on waste reduction. In regard to this, Honda has implemented a zero-waste-to-landfill initiative which has a goal of reducing waste sent to landfills at least to Zero. In order to achieve fulfill the goals of this initiative; Honda has implemented a very extensive waste reduction program in all its subsidiaries across the globe. The program involves landfill diversion which aims to divert all the waste that is dumped in the landfills. The company looks for alternative ways to utilize waste materials and also considers recycling of this waste Honda has also implemented waste-to-energy conversion where the waste in the landfills is converted into energy sources through incineration. This contributes to waste reduction since less or no waste is left. The company also practices recycling and reuse of its products . This has always been achieved through the implementation of a closed-loop recycling system where Honda recycles the metal scarps and other materials that result from its manufacturing process. By implementing this initiative, Honda has been able to achieve zero waste to landfill in many of its subsidiaries across the world including Europe, Asia, and North America by the year 2020. In fact Honda’s manufacturing plant based in North America attained 100% diversion rate which shows that there was no waste sent to landfills in the year 2020.
Moreover, Honda has continuously viewed fuel cell technology as a great pillar that holds its effort to achieve carbon neutrality by the year 2050. For the longest, Honda has been a leading innovator in the development of fuel cell technology which majorly uses hydrogen to generate electricity used to power vehicles (“American Honda Motor,” 2021). For the 20 years, the company has been working on fuel cell technology which gave birth to Honda’s first ever fuel cell vehicle- Honda FCX IN 2002. After this innovation, the company has continuously focused on improving the fuel cell technology which led to the manufacture of Honda clarity fuel cell that runs on hydrogen and emits only water vapor with zero emissions. Inside the car there are safety features and spacious interior that is environmentally favourable for the driver. In addition to this achievement, Honda has worked hard through its innovative team across the globe to develop hydrogen refueling infrastructure. Normally cars either electric, hydrogen run, and those that use fuel needs refilling at some point . Therefore Honda entered into partnerships with energy companies, automakers, and also government agencies that have helped establish a network of hydrogen fuelling stations. This has not been achieved in all parts of the world eventually it will happen
To achieve carbon neutrality, Honda has been engaging in the production of sustainable products which will definitely have a general impact on environmental Sustainability across the globe. The company has been engaging in the production of sustainable products and also used sustainable raw materials in their manufacturing process. For instance, Honda has a plant-based bio fabric which is majorly developed to be used for vehicle interiors. The car interior material is usually made from a combination of sugarcane and other materials derived from plants. It is majorly designed to replace the traditional petroleum-based materials and be more sustainable in terms of being environment friendly. Moreover, Honda is still trying the use of their sustainable materials which includes but not limited to natural fibres, recycled plastic and then improvise them in their final products. Remarkably, Honda has set an aim to increase the amount of recycled materials in its products to be at 40% by the year 2030. Notably, use of sustainable materials in the company products reduce the environmental impact and also promote sustainable practice in the automotive industry at large. It is worth noting that it is an important step for Honda to achieve carbon neutrality by the year 2050 and create a more sustainable future for the future generation.
The efforts by Honda to reduce carbon emissions has been partially successful, and the company aims to achieve more by the year 2050. According to Honda’s 2021 environmental report, the company achieved the goal of reducing carbon emissions in Motorcycles and recorded a 32.6% decrease while foe automobiles was at 29.8% and power products at 27.5% (Honda, 2021). Although these goals were not fully met by 2020, the company has the goal to keep the temperature increase below 1.5 celcius
Sustainable Sourcing
Just like other companies, Honda has recognized sustainable sources as pillar to its sustainability goals. This involves procuring of goods and services in a way that meets the present needs without compromising the ability of the future generation to achieve their needs. Honda has developed its green purchasing guidelines which outline its expectations for suppliers in their sustainability practices. In this regard, the company frequently conduct audit of all the suppliers they engage to make sure that they are compliant with these deadlines under the green purchasing guidelines. The company is also part of the Responsible Minerals Initiative, which ensures that the minerals that are applied in the manufacture of electronics are sourced responsibly without any abuse from humans.
Social Sustainability in Honda
Honda considers diversity, equity and inclusion (DEE). as the key social sustainability edge. Honda clearly understands that for it to achieve social Sustainability, DEI is ut most. Therefore, it has developed various initiatives whose aim is to promote DEI, including employee resource groups, and unconscious bias training. Additionally, Honda has created community outreach programs which are committed to disaster relief, and environmental stewardship. For instance, Honda has a Green path program whose purpose is to educate the community on the importance of environmental conservation and Sustainability
Operational Efficiency Perspective of Honda
Honda just like other market dominant multinationals hold operational excellence in high regard since it plays a big role in attaining competitive advantage over its major competitors and most importantly contribute to the company’s growth. To achieve this, Honda has come up with strategies that aim to achieve operational excellence in its operations as discussed below.
Products Design and Focus on Quality
Product design is very important to the company and its consumers. When a product design is most suitable, the company gets more demand for it which makes the company make more sales and definitely grow its brand. Honda uses key strategies that majorly focus on lean manufacturing. Lean principles which were first developed by Toyota are utilized by Honda to ensure that there is continuous improvement and a focus on customer value . These principles help Honda to streamline its operations and reduce general operational costs in the company.
Honda has employed strategic quality control mechanisms and standards that are used during the manufacturing process to ensure that the right product design and quality is attained as per the expectations.
Total Quality Management (TQM)
Total quality management strategy by Honda is a management philosophy that engages all the staff in the organization to continuously improve products and processes. Remarkably, Honda has adopted this philosophy in its whole manufacturing process and went ahead to offer them extensive training that helps them to quickly identify problems in the manufacturing process and solve them. Application of this principle has played a big role in the satisfaction of Honda customers. This has been possible since the company incorporates customer feedback into its product design the whole manufacturing process. The application of TQM has also made Honda develop supplier partnerships which are based on its principles. Through such partnerships, suppliers tend to understand the quality expectations of Honda and, thus, supply quality and high standard raw materials that will achieve the expected design and will have fewer problems in the production process.
Statistical Process Control
Honda also uses Statistical Process Control (SPC) which involves the act of observing and monitoring a manufacturing process through analyses of data. This is very necessary since it helps the company to identify and get rid of any sources of variation that may arise. Through this the manufacturing process runs smoothly and quality products results.
In an effort to promote continuous improvement culture among its employees, Honda employs Kaizen. Kaizen principles encourage small increasing improvements into a process or product after every period of time. Notably, Honda has implemented Kaizen principles with an aim of continually improving the manufacturing process and the end products. Additionally, Honda has implemented different standards in order to attain operational excellence in the company. For instance, it has implemented ISO 9001 standard which gives requirements that should be met for a manufacturing process to be assumed as quality. Additionally, Honda also ISO 14001 certified since the company ensures it meets the guidelines for managing environment.
Corporate Social Responsibility
Honda’s corporate Social Responsibility (CSR) efforts have been central In attaining operational excellence. Majorly its CSR initiative focuses most on Sustainability, and quality of life of the communities which occurs as a result of operational excellence in an organization. The company has learnt the secret to CSR; build brand reputation, promote positive impact in the communities, and enhance customer loyalty. For instance, Honda has always been focusing on improving the quality and safety of its products. Thus, it has established the Honda Quality Circle Program (HQCP) which ensures that all its products meet the safety and quality standards. This makes the company to cut on costs from products recall and complains.
Since it is also focused on the quality of community lives in its area of operation, Honda always engages the communities through its outreach program known as Honda foundation. Honda foundation majorly supports the community through offering of scholarships in an effort to support education. Further, it helps in in facilitating other educational activities such as financing and supporting scientific research which promotes innovation and technological advancements. As a result, these research and technological advancements help the company improve the manufacturing process which eventually helps the company achieve operational efficiency.
Employee Engagement and Training
Honda has the best HRM policies that are aimed to engage their employees and effectively incorporate them in the operation activities in order to achieve operational excellence in its manufacturing process. Honda holds training of employees in high regard since its very crucial in achieving Operational Excellence (OE). The company has for the longest invested in skill development programs that ensure its employees attain the right skills to effectively carry on their duties . The skill development program involves coaching and mentoring, on-job training, and formal training. This helps the employees to effectively engage In their work.
Honda also practices employee empowerment by giving their workers more autonomy in their jobs The Company for instance allows its staff to participate in decision making by making decisions that in the end improve efficiency in the company operations. Additionally, Honda promotes cross-functional collaborations among its employees by giving them opportunities to shift to other departments and explore. This is very helpful to the employees and company at large since they give them a broader perspective on all round Honda operations while encouraging sharing of ideas and practices. This gives Honda’s employees a sense of responsibility and purpose to work harder and endure improved efficiency.
Honda also uses performance management system to keep the employees aligned to their purpose and job description. The system clearly sets out the goals and expectations for Honda’s staff. This has played a key role in ensuring that all employees have a clear focus and fulfill their responsibilities that are aligned to the main goals and mission of Honda. This ensures smooth and seamless running of operations in the company. Moreover, in its effort to achieve operational excellence, Honda applies flexible work arrangements for its employees. For instance, it provides flexible working hours or remote options which as a result give employees control over their work and social life. This shows that most if not all Honda employees have a work-life balance which lead to job motivation and satisfaction. Moreover, the company also has a very attractive reward and recognition policy that aims at achieving operational excellence. Notably, always recognize and reward employees who show excellence in their work. Use of recognition programs has always helped foster the culture of excellence among Honda employees across the globe. Definitely, when employees are happy and satisfied operational excellence in a company like Honda becomes an obvious occurrence.
Technology Adoption
Honda is one of the renowned, multinationals whose brand has been widely known to utilize advanced technology in its production of goods and services. One area where Honda has extensively utilized use of technology is its manufacturing processes. The automobile corporation has implemented advanced robotic and automation technologies which has always played a big role in streamlining production processes and eventually reducing the cost of production. For instance, the robotic systems employed by Honda can perform tasks such as welding, assembly and even painting. This relieves human off these duties, which makes the production more efficient, accurate, cheaper and faster.
Honda has for the longest leveraged technological advancements to achieve operational excellence, specifically in its supply chain. Honda has majorly adopted advanced logistics and transportation management systems which help the company to optimize its supply chain operations. Utilizing this technological advancement in their supply chain operations has always helped Honda to reduce the lead time , improve the overall operation efficiency, and reduce the inventory costs.
In its product development process, Honda has adopted technology. Honda developed computer-aided design (CAD) and simulation tools to help restructure the product development processes and also contribute in the quality of its products. CAD is basically a software which is used by engineers and designers to develop3D and 2D models while simulation gives a chance for virtual testing of these models. Through the integration of the two technologies, Honda has been able to identify any issues in the production process and address them by improving the quality of these products.
Conclusion
This Honda portfolio clearly shows that the company is very intentional on Sustainability and operational efficiency. It is important to note that Sustainability and operational excellence cannot be ignored in the operations of any company. Currently, the climatically trends such as global warming and climate change have not only posed a threat to human life but also to the companies. Specifically, multinationals like Honda face a more extensive problem because of the geographical diversity of its operations. Therefore , from the goals, programs, and policies discussed in the paper , it is fair to acknowledge the extensive efforts made by Honda to promote Sustainability and operational excellence. All of these have been implemented in the stages of production. Honda should ensure that it keeps at per with the technology do frequent reviews, audits, and updates of these strategies to ascertain their efficiency and ensure that the companies operations are technologically and sustainably at per with current trends in the market.
References
American Honda Motor. ( 2021, April 23). Honda Targets 100% EV Sales in North America by 2040, Makes New Commitments to Advances in Environmental and Safety Technology. PR Newswire. https://www.prnewswire.com/news-releases/honda-targets-100-ev-sales-in-north-america-by-2040-makes-new-commitments-to-advances-in-environmental-and-safety-technology-301275727.html
write