Honda' s Flexible Plants - Lessons for Business Processes

Here’s a fascinating article from the Wall Street Journal - Honda’s Flexible Plants Provide Edge - Company Can Rejigger Vehicle Output to Match Consumer Demand Faster Than Its Rivals.

Honda plants in the U.S use what are called Gray Robots that can be set up to manufacture Honda Civics, on the welding part of the assembly process. The production line can be rejiggered to produce Honda CR-V vehicles which are are larger and of different shape than Civics. It appears that the Gray Robots have "hands" that are meant for Civics. In about five minutes time, these are changed to the hands meant for CR-Vs and the production line now assembles CR-Vs!

The impressive part of this is the cost that Ford needs to incur to change their production line from one vehicle to another ($75M and 13 months) and General Motors - $350M.

This gives Honda an enormous cost advantage and more importantly, the flexibility to switch from smaller to larger vehicle manufacturing or vice-versa depending upon Gas Prices and what people want to buy at any time. This is an enormous cost advantage to Honda and unless the other makers adopt similar ways of flexibility they may under a big disadvantage!

The same kind of principles apply to business processes also. You can design a business process for handling auto and life insurance each or you can design one that can accommodate both. Or they can be claims for one type of insurance policy or another.

Many technilogies like Business Rules Engines, Document Scanning and Storage, Workflow engines, etc have all been available for quite a while now when business processes are considered for simplification and flexibility. You can check out my article - Ten Key Technologies for Lean Process Improvement published sometime ago.

Exciting real-life examples that show the impact of flexibility in Manufacturing that can be adapted for Business Process Improvement!

Originality is nothing but judicious imitation. The most original writers borrowed one from another. The instruction we find in books is like fire. We fetch it from our neighbor’s, kindle it at home, communicate it to others, and it becomes the property of all. - Voltaire