Honda Italia and IBM Revolutionize Motorbike Production With RFID

Honda Italia Industriale, the Italian subsidiary of the Honda Motor Co. and leader in the 2 wheels worldwide market with more than 12.7 million PTW (powered two wheels) models sold in 2006(*), announced today that it has signed a contract with IBM (NYSE: IBM) to implement RFID (Radio Frequency Identification) technology and infrastructure to transform and innovate the production processes at its plant located in Atessa, Italy. The agreement will allow Honda Italy to achieve higher levels of efficiency and accuracy in managing its large motorcycle and scooter production in Italy.

IBM Global Business Services will support Honda Italia in the design and development of the RFID implementation, which will enable the real time, automatic identification of each vehicle along the entire production chain. The RFID tags will also be used on micro-lots of critical components, such as engines.

IBM business and technology consultants have been collaborating for a long time with Honda Italia engineers in the design of the new processes and in the identification of the best solution. The RFID technology will be then completely integrated with Honda's existing IT systems through an open standards-based, Linux and Java (J2EE) application built on the IBM WebSphere Application Server to track inventory and to monitor ways to improve efficiency.

The first phase of the project, completed earlier this year, simultaneously with the celebration of the 35th anniversary of Honda Italia, calls for the transformation of Honda's large-displacement bikes (Hornet 600, CBF1000/600/500) assembly line. The RFID tags were used to monitor the traceability of critical components, WIP (Work In Progress) management and inventory replenishment. In the future, RFID tags will also be applied to Honda's scooter production line, starting with the European best seller SH150i/125i and the bigger SH300i.

"This is an extremely important project and it's a fundamental step in our 'Outstanding Quality' innovation production strategy that will allow Honda Italia to gain relevant benefits primarily in the areas of components supply and quality control with an overall improvement of the control and efficiency of all assembly processes and operations related to motorbike configuration management," said Nicola Marrone, Project Executive, Honda Italia. "Our future plans are to extend the RFID-based innovation to other areas, such as the supply chain and after sales services."

"This is an example of how innovative technology can enable a significant business transformation providing real value to a client. IBM recognized the potential value of RFID early on and moved aggressively to support its clients in software, by investing in research and development, and with services, in building unique professional capabilities and skills," said Augusto De Castro, Vice President Industrial Sector, IBM Italy. "An effective working relationship with Honda was crucial to identify the process needs and envision true business benefits, having access to IBM competence centres to design the solution."

This project was signed in September 2006 and is part of an existing partnership between Honda Italia and IBM.

Honda manufactures in Italy a relevant number of motorcycles and scooters. The production volume in Italy in 2006(*) achieved over 170 thousand units, either sold in the Italian market (which, alone, counts 40% of the Continental motorbikes market) and in the International and European markets.

Honda Italia Industriale SpA is the Italian branch (2W division) of the Honda Motor Co. Ltd. With a 785 million Euro turnover and over 800 employees located in Rome, Bologna and in the Atessa plant (Chieti, over 170,000 units produced), Honda Italy is the leader brand in the domestic market, with about 100,000 motorcycles, scooters and off/road bikes from 50 to 1832cc sold per year. Honda Italy's sales network counts about 200 official dealers and over 400 service technical points. Thanks to the Hornet 600 (over 7,500 units sold in 2006) naked motorcycle and to the best seller SH125i/150i scooter (over 43,000 units sold this year so far in Italy only), Honda has been keeping for years the leading position in Italy -- with a 21% market share in 2006. More news about Honda Italia activities, products, special events, sales and service network can be found on the www.hondaitalia.com website or requested to the Info Contact Center Honda (848.846.632). Information (*) related to the Apr, 1 2005 / Mar 31, 2006 fiscal year.