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Understanding the Impact of Indot Projects on Automotive Industry Cluster Logistics Costs: a Case Study of the Honda Plant JOINT TRANSPORTATION RESEARCH PROGRAM FHWA/IN/JTRP-2008/28 Final Report UNDERSTANDING THE IMPACT OF INDOT PROJECTS ON AUTOMOTIVE INDUSTRY CLUSTER LOGISTICS COSTS: A CASE STUDY OF THE HONDA PLANT Ananth Iyer Barry Partridge Mary Pilotte Pete Mast Gerald Simms February 2010 TECHNICAL Summary Technology Transfer and Project Implementation Information INDOT Research TRB Subject Code: 15-4 Economic Impact February 2010 Publication No. FHWA/IN/JTRP-2008/28, SPR-3216 Final Report Understanding the Impact of INDOT Projects on Automotive Industry Cluster Logistics Costs: A Case Study of the Honda Plant Introduction This study focuses on understanding the impact of required identification of possible future INDOT projects on the Honda, Greensburg plant’s evolutions of the yet developed supply chain. As supply chain. The goal of the study was the part of this study, we mapped out the existing following: supply chain to Honda’s plants in Ohio and Toyota’s plant in Indiana. Approximately 51 (a) Identify approaches for INDOT to be an managers including Honda officials, competing active partner in facilitating supply chain OEM locations, academic publications, supply effectiveness. chain participants, economic development (b) Maximize the economic impact of officials, INDOT personnel and consultants were INDOT projects on the Honda affiliated interviewed to develop a fact base and for research automotive Cluster in South Central input. We also obtained data regarding planned Indiana. “Major Moves” projects already approved and in (c) Create a framework for INDOT to utilize the region of interest. Finally, we developed in the future, when prospective economic strategic choices and grouped associated projects partners are in discussions with the state. into strategic bundles that could be used by INDOT to better understand their link to Honda’s This study was ongoing in 2007-2008, thus many of supply chain competitiveness in Indiana. the decisions regarding Honda’s supply chain Findings A summary of the results of this study include (b) It’s not too late -INDOT has 12-24 possible strategic choices being grouped under three months yet to plan and execute improvements different categories that we termed “Shared Supply that would benefit economic development. Focus”, “Hoosier Automotive Focus” or (c) Evaluating projects strategically can “Reclamation Focus”. A summary of the results of have a significant impact on economic this analysis are as follows: development outcomes in the future. (a)Speed counts - Reprioritizing existing We believe that the results of this focused study projects can provide the difference between suggest that a strategic approach to projects can being viewed as an economic development leader, enable INDOT to enhance its role as a contributor or a support service follower. to industrial supply chain competitiveness in Indiana. 15-4 2/10 JTRP-2008/28 INDOT Division of Research West Lafayette, IN 47906 Implementation The study suggests developing the following as Greensburg operation and related supply chain part of the implementation plan: and accomplished through the use of existing INDOT models/tools without further cost of Use known and approved project data to development. evaluate the cumulative project impact on flows, safety and other factors identified in this It is suggested that an INDOT official in the study throughout the identified focus planning area volunteer to take this areas/regions. This can be combined with implementation recommendation forward. estimated flows associated with the Honda Contacts For more information: Prof. Ananth Iyer Principal Investigator Indiana Department of Transportation School of Civil Engineering Division of Research Purdue University 1205 Montgomery Street West Lafayette IN 47907 P.O. Box 2279 Phone: (765) 494-4514 West Lafayette, IN 47906 Fax: (765) 497-2402 Phone: (765) 463-1521 E-mail: [email protected] Fax: (765) 497-1665 Purdue University Joint Transportation Research Program School of Civil Engineering West Lafayette, IN 47907-1284 Phone: (765) 494-9310 Fax: (765) 496-7996 E-mail: [email protected] http://www.purdue.edu/jtrp 15-4 2/10 JTRP-2008/28 INDOT Division of Research West Lafayette, IN 47906 Final Report FHWA/IN/JTRP-2008/28 Understanding the Impact of INDOT Projects on Automotive Industry Cluster Logistics Costs: A Case Study of the Honda Plant by Ananth Iyer Professor & Principal Investigator Barry Partridge JTRP Project Administrator Mary Pilotte DCMME/GSCMI Project Mgr. and Pete Mast Gerald Simms Graduate Research Assistants Krannert School of Management Joint Transportation Research Program Project No. C-36-67OOOO File No. 9-10-92 SPR-3216 Prepared in Cooperation with the Indiana Department of Transportation and the U.S. Department of Transportation Federal Highway Administration The contents of this report reflect the views of the author who is responsible for the facts and the accuracy of the data presented herein. The contents do not necessarily reflect the official views or policies of the Indiana Department of Transportation or the Federal Highway Administration at the time of publication. This report does not constitute a standard, specification, or regulation. Purdue University West Lafayette, Indiana 47907 February 2010 TECHNICAL REPORT STANDARD TITLE PAGE 1. Report No. 2. Government Accession No. 3. Recipient's Catalog No. FHWA/IN/JTRP-2008/28 4. Title and Subtitle 5. Report Date Understanding the Impact of INDOT Projects on Automotive Industry Cluster Logistics Costs: A Case Study of the Honda Plant February 2010 6. Performing Organization Code 7. Author(s) 8. Performing Organization Report No. Ananth Iyer, Barry Partridge, Mary Pilotte, Pete Mast, Gerald Simms FHWA/IN/JTRP-2008/28 9. Performing Organization Name and Address 10. Work Unit No. Joint Transportation Research Program 550 Stadium Mall Drive Purdue University West Lafayette, IN 47907-2051 11. Contract or Grant No. SPR-3216 12. Sponsoring Agency Name and Address 13. Type of Report and Period Covered Indiana Department of Transportation State Office Building Final Report 100 North Senate Avenue Indianapolis, IN 46204 14. Sponsoring Agency Code 15. Supplementary Notes Prepared in cooperation with the Indiana Department of Transportation and Federal Highway Administration. 16. Abstract This study focuses on understanding the impact of INDOT projects on the Honda, Greensburg plant’s supply chain. The goal of the study was the following: (a) Identify approaches for INDOT to be an active partner in facilitating supply chain effectiveness. (b) Maximize the economic impact of INDOT projects on the Honda affiliated automotive Cluster in South Central Indiana. (c) Create a framework for INDOT to utilize in the future, when prospective economic partners are in discussions with the state. Detailed data analyses for many of the decisions regarding Honda’s supply chain required identification of possible future evolutions of the supply chain. As part of this study the existing supply chain at Honda’s plants in Ohio and Toyota’s plant in Indiana were mapped out. Approximately 51 managers including Honda officials, competing OEM locations, academic publications, supply chain participants, economic development officials, INDOT personnel and consultants were interviewed to develop a fact base and for research input. We obtained data regarding planned “Major Moves” projects already approved and in the region of interest. Finally, we developed strategic choices and grouped associated projects into strategic bundles that could be used by INDOT to better understand their link to Honda’s supply chain competitiveness in Indiana. A summary of the results of this study includes possible strategic choices being grouped under three different categories we termed “Shared Supply Focus”, “Hoosier Automotive Focus” and “Reclamation Focus”. A summary of the results are as follows: (a) Speed counts - Reprioritizing existing projects can provide the difference between being viewed as an economic development leader, or a support service follower. (b) It’s not too late -INDOT has 12-24 months yet to plan and execute improvements that would benefit economic development. (c) Evaluating projects strategically can have a significant impact on economic development outcomes in the future. We believe that the results of this focused study suggest that a strategic approach to projects can enable INDOT to enhance its role as a contributor to industrial supply chain competitiveness in Indiana. 17. Key Words 18. Distribution Statement Automotive, supplier, OEM, Honda, Toyota, supply chain, economic development, Tier 1, Tier 2, Ohio, economic No restrictions. This document is available to the public through the impact, distribution, manufacturing, production, JIT, National Technical Information Service, Springfield, VA 22161 Japanese, Greensburg, Indiana. 19. Security Classif. (of this report) 20. Security Classif. (of this page) 21. No. of Pages 22. Price Unclassified Unclassified 183 Form DOT F 1700.7 (8-69) A Case Study of the Honda Plant SPR-3216 Table of Contents List of Tables ........................................................................................................................... 3 List of Figures ......................................................................................................................... 4 Introduction ............................................................................................................................ 5 Problem Statement ................................................................................................................
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