Driving Honda

Driving Honda, Inside the World’s Most Innovative Car Company, by Jeffrey Rothfeder, Portfolio 2014

 "We are always thinking of Toyota.  Every time.  Every time.  They need BP activities and they have started     a kaizen center in Cincinnati.  They need BP Activities.  They like our kaizen."  Maruo (the father of              Honda's BP production system) is not worried about other competitors.  Toyota's strength and financial     power are always at the back of his head, just beyond his seeing or hearing, but  "They are always here.    This  is my race.  My race."  Terry Maruo speaking in 1997 to Patricia E. Moody

We’re coming up to Honda’s 65th anniversary, and for a company that landed first in the US (of the two rival Japanese transplants), despite higher profit margins and a long series of product innovations, not as much is known about the why and how behind this great pioneering competitor.  Rothfeder’s look at The Honda Way takes readers behind doors, including its newer Alabama facility, and shows how employees are drawn into the process.

During my time with Honda working on the earlier Powered by Honda book, I became convinced that many of the tools used every day in the Marysville, Anna engine and dozens of supplier plants were powerfully simple.  Their new product development area was staffed with high level engineers and managers.  Their purchasing department held power that I had not seen in many other operations.

But what most amazed me about Honda was its culture, the “racing spirit” and maverick organizational structure, flatter and less hierarchical than its later main competition Toyota. When a supplier got in trouble, teams of extremely well-prepared purchasing engineers arrived on scene overnight to bring that supplier back on line because the cost of an assembly line-down situation, at $26,000 per minute, was unacceptable.  Contrast that flexible response to the competition, and it becomes clear that the Honda system rests on a very different foundation. Plus, there’s a lot to be said for an organization in which one of the sustaining cultural myths is that of the fighting “underdog,” even long after the company climbed into the top three.

Rothfeder’s view of the development of the Acura MDX, as well as his conversations and insight into Honda’s leadership makes this book an inspiring, updated and detailed look into a refreshingly innovative industry leader.  We’re pleased to see that the dictum of Terry Maruo, father of Honda’s BP production system,  to always “go see the actual part in the actual place to understand the actual situation ” some twenty years later survived and is well covered in Rothfeder’s book. His coverage of a cost-down negotiation is memorable, when Honda surprised a supplier with an innovative approach to fluctuating raw materials costs.  In exchange for helping with the cost of rising materials, the supplier agreed to improve its factory efficiency and productivity, thereby giving Honda what they wanted in the first place, a stronger, and higher quality local supplier.