Honda Managing Operations and the Supply Chain Essay

Introduction

The paper focuses on Honda Motor Company limited which is a Japanese multinational public corporation that operates in a conglomerate industry. It is among the largest company in manufacturing automotive headquartered in Tokyo, Japan. As at 2016, it had approximately over 200, 000 employees with a total operating income estimated at YEN500 billion. Soichiro Honda and Takeo Fujisawa founded Honda in the year 1946 where it was later incorporated in 1948. It majorly focuses on the manufacture of automobiles, aircraft, motorcycle, and other power equipment. Other than the products above, Honda also provides financial services to customers willing to purchase the products. The financial services are in the form of leases and credit. Honda also provides logistics services by manufacturing logistics equipment such as metal crates, steel crates, and other designs depending on the preferences of the consumer. Its main competitors include Toyota, Nissan, Hyundai, Chevrolet, Suzuki, Mitsubishi, and Mazda among others. Honda targets the middle and upper-class consumers as it provides slightly expensive products. 58% of the customers are aged between 18 and 44 where the male customers account for 42% of the total consumers while female consumers account for 22%.

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The Historical Development of Technological Unemployment

Technological unemployment refers to the situation where people lose jobs to the technological changes in the economy (Kim, Kim and Lee, 2017, p. 3). Due to technological advancements, organizations are currently automating a significant percentage of their labour by adopting machines that tend to be labour saving and hence cutting costs. The development of technological unemployment dates back to the several decades ago before the 18th century. The step by step development over the centuries is illustrated below;

Before 18th Century

During the period, technology was not a common aspect in the economy. The unemployment rates were low, and the idea of technological unemployment was a rare topic. If the subject arose, most of the people had a pessimistic view and perceived it as a matter of less concern (Vermeulen, Kesselhut, Pyka, and Saviotti, 2018, p. 5).

During the 18th Century

During this period, the introduction of machines began, and the fears of technological unemployment began to intensify, and cases of mass unemployment also began to rise. It was evident by the occurrence of the industrial revolution that began in Great Britain but was later spread to other countries across the globe (Curtis Wolff, 2015, p. 1). While the machines started creating a significant impact on labour, a proportion of the people maintained the pessimistic view by presuming that innovation, in this case, machinery, could not bring a negative impact to the mass employment. Furthermore, in the second half of the 18th century, the fears of technological unemployment began to diminish as some economists argued that in fact, technological development was benefitting the society in all angles especially the working class. It was to this effect that the term "Luddite Fallacy" was invented describing that the change of technology does not destroy jobs in the economy but instead changes the composition of labour (Curtis Wolff, 2015, p. 2).

During the 19th Century

As technology continued to develop, the debates on technological unemployed began to become more intense particularly in the Great Britain where most of the economists were concentrated. Through the views of great political economists in the centuries: Adam Smith and Den Tucker, there was the creation of the modern economics concepts claiming that technological development would not create a threat to the labour market (Frey and Osborne, 2017, p. 256). During the first few decades of the 19th century, some political economists argued against the modern economics and presumed that instead, technological developments would impact jobs negatively. Nevertheless, Karl Max joined the debate towards the middle periods of the 19th century by intruding the school of thought which pointed an utterly pessimistic view regarding technological unemployment (Mokyr, Vickers and Ziebarth, 2015, p. 34). In this case, by 1870, the fears of technological unemployment began to face especially in Great Britain creating the perception that innovation was creating a positive impact to the society especially the working class.

During the 20th Century

In 1920, the issue of mass unemployment re-emerged as a demanding issue in Europe. Due to the improved agricultural technology such as the introduction of tractors, the American workers from the rural areas began to lose a job as the tractors took over their tasks (Marchant, Stevens and Hennessy, 2014, p. 29). The debates thus shifted from Great Britain to the United States leading to the development of two massive debates on technological unemployment of the 20th century where one debate occurred in the 1930s while the other in 1960s. While the debates were not conclusive, the fear of technological unemployment faded away as the World War II reduced unemployment. In 1930, the optimists developed an argument based on the neo-classical belief, that compensation effects would correct the aces of short-term unemployment (Mokyr, Vickers and Ziebarth, 2015, p. 37). In the 1960s, the Keynesian economics overrode the compensation effect by asserting that the government intervention would clear the technological unemployment that was not eliminated by the self-correcting power in the market. Due to development of the capitalism aspect, the issue of technological unemployment arose in the 1970s and became persistent for the entire century (Calvino and Virgillito, 2017, p. 3).

During the 21st Century

During the first decade of the 21 century, the argument that innovation does not lead to long-term unemployment was held firm despite the various criticisms. Nonetheless, in 2013, the concern about technological unemployment grew rapidly is some sectors. Furthermore Matuzeviciute, Butkus and Karaliute, (2017, p.5), predicted a forthcoming increase in technological unemployment in the future decades. As globalization became rampant, unemployment continued to increase despite the increase in output. Currently, machines are taking over some jobs from people. Machines are undertaking most of the tasks across various industries including research, health, education, journalism, and entertainment (Frey and Osborne, 2017, p. 258). More importantly, machines are taking over functions that were previously presumed to be safe from automation such as jobs requiring empathy where robots often do these tasks (DeCanio, 2016, p. 284). There has been a significant fall in employment within the manufacturing sectors across the world due to automation.

Moreover, the Davos meeting held in 2014 deduced that there was a close relationship between technology development and unemployment. The survey by Davos in 2014 further asserts that over 80% of the respondents agree that the development of technology is creating a jobless community. Therefore, following the increases development of artificial intelligence, machines will take over a significant proportion of jobs in the future increasing the unemployment rates in the economy (Decker, Fischer and Ott, 2017, p. 350).

The Impact of Technological Unemployment on Honda's Operation Management and Supply Chain (Based on Frey and Osborne's Findings)

The study findings by Frey and Osborne suggest that with the recent developments in Machine Learning, the employment opportunities across various occupations will be at risk in the future. In the future decades, machines will be taking over significant tasks, and the rate of technological unemployment will be determined by the pace of computerization across the various industries. However, the speed is interpreted by two waves of computerization often separated by a "technological plateau". The first wave encompasses the facts that human capital in routine areas such as transportation and logistics, office and administrative support, production, and manufacturing occupation will be taken over by machine capital (Frey and Osborne, 2017, p. 265). This wave will then be followed by a slowdown of the pace through which machine capital will be substituting human capital as a result of the underlying engineering bottlenecks that hinder computerization. The slowdown thus defines the "technological plateau" which is the gap between the first wave and the second wave of computerization discussed above. The second wave encompasses the strategies adopted to overcome the existing engineering bottlenecks that hinder the development of computerization usually associated with creativity and social intelligence (Frey and Osborne, 2017, p. 266).

As a manufacturing and construction company, Honda is at risk to face the impact of technological unemployment as exhibited by Frey and Osborne findings. Appendix table A of the research findings connotes that the occupations that are commonly found at Honda Corporation have low probabilities towards experiencing the technological unemployment. For instance, occupations such as mechanics, repairers, and installers have a 0.003 probability of being substituted by machines while mechanical engineers have a 0.011 probability (Frey and Osborne, 2017, p. 269). Considering a scenario where there is a high risk of computerization where more than 70% of the jobs are highly probable to be substituted by machines, the operations of the corporation will significantly change. For example, the introduction of machine learning equipment such as robots helps to undertake more complex tasks that could be done by many workers. These machines will be capable of performing tasks more quickly and in an efficient manner. At the long-run, the Corporation cuts the demand of labour since less human capital is required which may in turn help to reduce costs. Moreover, the introduction of the robot, Asimo Honda, in the early 2000s saw the loss of many employment opportunities among the people working in Honda, Japan. Although the robot is currently not operational, Asimo Honda is a perfect example of how the future automation of tasks will lead to technological unemployment.

While some jobs are at risk to be substituted by machine learning, other occupations face a low risk to the bottlenecks that may hinder technological development in the future. As Frey and Osborne suggest, although computerization will be inevitable in the future, these bottlenecks make some occupations that require skills such as social intelligence, creativity, perception, and manipulation safe from automation. The findings assert that no robots can perform tasks that need these skills. In this case, therefore, occupations such as management, engineering, financial services, media, legal services, healthcare, education, and computer science are currently safe from computerization. The occupations at risk include transportation, manufacturing, production, office services, and sales (Frey and Osborne, 2017, p. 267). By looking closely at these examples, Honda's operations lie on the two probabilities. Its jobs majorly entail engineering, management, manufacturing, production, and sales of automobiles. While engineering and management jobs face a low risk, manufacturing, production, and sales jobs face a high risk of automation. Therefore, in the event of computerization of services in the first wave, Honda will adopt machines t substitute human workforce, reducing the demand for labour in the company. It will aid in implementing labor-intensive machinery that can perform the assigned tasks efficiently. At the long-run, Honda might make more...