1. How does Mr. Honda’s history with suppliers relate to Honda’s current supply management strategy?
The current supply chain management strategy reflects Honda’s long-term goal of manufacturing products where they are sold, and its determination of buying parts where it manufactures vehicles. A. Increased local content is due largely to purchases Honda makes from many of the other 3 Japanese automobile firms that were established during the late 80’s. B. Focusing on 4 regional markets has allowed Honda to develop strong sales, research and development, and manufacturing operations in each region to ensure that the product mix in each region is appropriate to the needs of the region. C. Suppliers are involved in the development process to the extent that they are asked and invited to submit suggestions about how certain designs could be made better, faster, with less weight, or less expensively. Today, purchasing is done by the Honda research and development department.

2. Why is purchasing so important to Honda?
The International Purchasing Division of Honda Corporation has full responsibility for coordination between Honda and its overseas plants. Honda’s purchasing department carries out the localization strategy. This strategy involves: A. Finding and qualifying local suppliers B. Developing a second source when volume doubles, or when quality or on-time delivery problems occur. C. In situations in which the goals or the philosophies of the Honda and supplier are mismatched, Honda will respect its contract to do business with the supplier.

Along with Q (Quality), C (Cost), D (Delivery), and D (Development), Purchasing have added M (Management) and E (Environment) to supplier evaluations, and are advancing the procurement of parts that give consideration to the environment.
Honda Purchasing results in lower cost, higher