Innovation management automotive industry


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The purpose of project 3 is to study about the automotive industry in generally. Then the scope will going deeply to reveal what innovation was occur nowadays in this industry. The study will take two major players in this industry. These are Toyota Motor Company and Honda Motor Company. Inside this document also will review about how the largest automotive manufacturer such Toyota Motor Company and Honda Motor Company carries out the management of innovation. Innovation management will discuss about Toyota Production System (TPS), Toyota Way, Seven Principles of Toyota Production System (TPS), Honda’s Philosophy, Fundamental Beliefs and Three Joy. At the end of this document, it wills write-down how the automotive industry will be manage in the future that focus on research & development (R&D).

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Innovation management automotive industry

  1. 1. INNOVATION MANAGEMENT AUTOMOTIVE INDUSTY Reveal the innovation Group Members: • Mohd Syahmi Bin Nuruddin • Mohd Khairul Najmi Bin Mohd Najid • Aliff Izamie Bin Osman
  2. 2. Introduction • The automotive industry designs, develops, manufactures, markets, and sells the world's motor vehicles. • Industry begins since the invention of internal combustion by Nicolaus August Otto in 1876. • Daimler, Henry Ford, Kiichiro Toyoda, and also Soichiro Honda change the industry culture by adopted the innovation in the vehicle manufacturing.
  3. 3. Automotive Industry Originally • The originally of automotive industry start in Germany. • The four-stroke internal combustion engine invented by Nikolaus Otto in Germany. • The petrol engine automobile was invented in Germany by Karl Benz in Germany. • The diesel engine was also invented by German Rudolf Diesel.
  4. 4. Automotive Industry Originally • Germany is famous for the high-performance and high-quality sports cars made by Porsche, and the cars of Mercedes, Audi and BMW are famous for their quality and technological innovation.
  5. 5. Innovation Taken Place • Innovation in automotive industry expands in line with time. • From basic primitive operation of four stroke engines, nowadays the hydrogen fuel cell was developed to drive the future technology for future user. • Big players in this industry nowadays compete each other to make innovation in their products.
  6. 6. Innovation Taken Place • Volvo Company for example leading innovation in safety matters in their vehicle. • Honda from Asia country is a leading innovation in making an efficient and environmental friendly vehicle. • Innovation doesn’t taken place in development of engine, it also expands in the other parts of automotive such as safety issue, technology adopted, material development, customers satisfaction, even in the management of the companies it self.
  8. 8. Honda Motor Company • Honda was founded by Soichiro Honda, a Japanese engineer in industrial. • 1937 – He started produce piston ring for small engine which lead the manufacturing a small engine in motorcycle. • 1948 – He start producing complete motorcycle. • 1959 – Honda motorcycle first shipping to United States.
  9. 9. Honda Motor Company • Nowadays, Honda Motor Company is a multibillion dollar multinational company. • It is a 1st larger motorcycle and 6th larger automobile manufacturing in the world. • Honda also is the larger engine maker in the world producing more than 14 million internal combustion engines each year.
  10. 10. Honda Motor Company • Honda’s product including automobile, robot, marine engine ,power boat, water craft, jet, jet engine, electrical generators, aeronautical and other automobile technology. • Honda’ main competitor including Toyota, General Motor, Ford, Chrysler and Nissan.
  11. 11. Where Does Honda Innovate? • Honda’s Known knowns – “Making better better”. – Honda nowadays have reputation of delivering the high performance engine in the world. – Having start as engine manufacturer, it concern about high efficiency, effectiveness and quality of engine. – In 1972, Honda produce CVCC engine allowing Honda achieve the US emission standard.
  12. 12. Where Does Honda Innovate? – In 1988, it announce the VTEC engine which increase volume efficiency of four-stroke internal combustion engine. – In 1999, it announce the introduction of FCX V1 and FCX V2 engines which were first receive the certification of commercial use in US in 2002. – In the future will introduce the new FCX which efficiently produce zero emission.
  13. 13. Where Does Honda Innovate? • Honda’s known unknowns – “Onwards, onwards anywhere but backwards”. – Base on the Honda expertise in the engine, the company has successful pursue in radical changes in product ways. – Thus, Honda invented Honda Jet where have unique wing engine mount configuration. It reduce drag and provide more space to build a bigger cabin.
  14. 14. Where Does Honda Innovate? – In 2006, Honda receive the first order for its Honda Jet which have 35% more fuel efficiency then similar aircraft. It achieve by the development of high grade material, aerodynamic, efficient engine and design.
  15. 15. Where Does Honda Innovate? • Honda’s unknown unknowns – “The power of dream”. – The cars that do not crash. Honda started to realize dream about the car which rather than just protecting again the worse, but prevent the worse from happening. The new CRW features collision navigation breaking system warn the driver if the car is too close to the front. It identified the break and retract the seat belt if the driver move forward.
  16. 16. Where Does Honda Innovate? – ASIMO, the Honda’s humanoid Robot. Create by Honda which take 20 years for the development. – ASIMO is the world’s first humanoid robot which have programmed with intelligent capability.
  17. 17. How Does Honda Do It? • Honda has regional hierarchical organization structure that help the company achieve the objective which is efficiency, effectiveness and environment friendly. • Failure – The secret to success. Honda also have high tolerance of failure.
  18. 18. How Does Honda Do It? • Honda Engineering Company. – Where the concept & design development of more effective and efficient occur. – The activities base on industrial analysis and support by their expertise such as electronic, computer aided design, fluid flow, software, material, simulation technique, mechanics, ceramics and heat transfer.
  19. 19. How Does Honda Do It? • Honda R&D Company - Fundamental research, trial and error. – This is where Honda’s fundamental research take place by using trial and error strategy. – To offer something of value to the people of the world with their dreams and hopes for the future.
  21. 21. Toyota Motor Company • The most innovative automotive company in the world. • In 2009, business week magazine ranked Toyota the 3rd world innovative company. • Through their effective management system and productive production, Toyota become the larges firm in the global industry automotive by sales.
  22. 22. Toyota Motor Company
  23. 23. Toyota Motor Company • The core business of Toyota is designing, manufacturing and selling automobile. • Toyota has developed many well known brand such as Corolla, Camry and Prius.
  24. 24. Toyota History • Toyota begins in 1924 with the invention of Toyota automatic loom. • The innovation is using the concept of Autonomation or “Jidoka” to eliminate the need of human operates and also eliminate the wasting of production. • In 1929, Kiichiro Toyoda develop small engine. • In 1935, Toyoda produce A1 prototype passenger car.
  25. 25. Toyota History • Two years later, he found the Toyota Motor Company. • In 1938, Toyota adopt innovative system called “Just In Time”. • In 1957, Toyota export the first Japanese passenger car to US and established the 10 motor sales company in the US market. • In 2009, Toyota have impressive 46% market share in the Japanese domestic market and own 16% in the US market.
  26. 26. Toyota History • However, it still faces the intense competition for the US, European and Asia market from GM, Ford and Volkswagen. • Investment in R&D - To win the battle, Toyota invest heavily in solving consumer driving issues which are safety and environment impact. • Toyota become pioneer in Hybrid technology development. The firm invest innovative capabilities to stay ahead from other hybrid manufacturers such as Honda.
  27. 27. Innovation Strategy • Toyota firm operate: – Closed system of innovation – Decentralized – Highly collaborative – All employees are encourage to offer ideas to improve the efficiency. – Every year, approximately 1 million ideas was collected annually.
  28. 28. Innovation Strategy • Toyota established 11 region center around the world: – 4 in Japan – 2 in Asia-Pacific – 2 in the US – 3 in Europe • With the half is R&D center, the company create 64 models sale around the world.
  29. 29. Innovation Strategy • Toyota generate radical in incremental and innovation in its products. • Toyota heavily invest in R&D activities in the technical center worldwide and spend approximately 4.4% from its revenue for R&D.
  30. 30. Innovation Strategy • Toyota R&D center have 3 level of strategy: – Basic Research • Vehicle related technologies • Enhance efficiency – Technologies Breakthrough • Hybrid Technology • Fuel Cells – Product Development • Upgrade on current models
  31. 31. Toyota Production System (TPS) • Toyota continuous improving its operating system according to the principle of “Kaizen”, “Jidoka” and “Just In Time”. • Jidoka – Eliminate wasting during production • Kaizen – Continuous improvement • Just In Time – is an inventory strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs.
  32. 32. Toyota Way • Focus on flow • Each process must add value • Interrupted eliminated
  33. 33. Kaizen • The processes are continuously improve through even smallest incremental innovation.
  34. 34. Standardization – “Heijunka” • Toyota standardize processes in the production line. It established the same production line around the world and using same production procedures for each model of car. – Using same production line – Different models, same factory line • This mean the model of Corolla, Crown, and some other models can be manufactured within the same production line.
  35. 35. Managing Uncertainty • Toyota has make excellent first mover advantage in market segment in hybrid technology. • It use Japanese market as test for a new product. • The Prius was launch domestically 2 years before roll out in European and US. • “Just In Time” limit exposure to failure.
  36. 36. Capturing Value From Innovation • Cost reduction through efficiency Drive market share • High quality produced through TPS • In term of R&D, Toyota filed its patent to protect valuable intellectual property (IP). – 2000 patents for 2010 Prius.
  37. 37. Toyota Future • For Toyota, the future is bright. • Toyota core competency is it integration innovative product with innovation in process and leave the competition line far behind. • The competency is achieve not through by mechanical implementation strategy, but its born organically from the culture started by Sakichi Toyoda in 1920. • Until now, innovation is prior and the big thing for Toyota
  38. 38. The End…