Honda Cautious In e-Commerce

Although talk swirls constantly about the magic bullet of OE-supplier e-commerce and its potential for saving automakers vast sums, Honda Motor Co. Ltd. isn't buying it.

Larry Jutte, vice president and general manager - Motorcycle and Powertrain, Parts and Procurement, Honda of America Mfg. Inc., says Honda simply doesn't do business with suppliers in the fashion implied by suggested models of OE-supplier e-commerce, such as online parts-bidding auctions.

Instead, Mr. Jutte says Honda is cautiously scrutinizing the implications of e-commerce with its suppliers in order to improve relationships - not force cost reductions.

He says that Honda is analyzing the use of information technology in purchasing and supply chain management to develop an appropriate strategy based on Honda's "culture," but the "direction and benefits are unclear.

Mr. Jutte says Honda thinks the best possibilities come from linking suppliers' production with assembly plant lines. "We believe the best application of information technology will be to closely synchronize our suppliers' production lines with our own production lines. We're studying exactly what implications this will have for Honda and for our suppliers in North America. But looking at changes that we have implemented internally, you can bet our strategy will involve a greater number of body-on-sequence suppliers."