How Does Honda Leverage Big Data and Analytics to Drive Growth?

Honda identified the need for data science in its business and dedicated its R&D to it

Honda is one of the world's most innovative companies, as anyone who has witnessed its work in robotics can testify. The same mindset applies to every division of its business: Honda's engineers constantly strive to design and build the smartest, most technologically advanced products on the market. In the automotive space, Honda aims to become the premier manufacturer of interesting, cleverly designed cars that enable customers to experience the joy of driving. To this end, it invests billions of dollars per year in its research and development organization, Honda R&D. The latest press conference by Honda's new CEO revealed that the company will invest approximately 5 trillion yen in R&D investments in the coming 6 years.

Several years ago, Honda R&D realized that new sources of big data – vehicle diagnostics and telematics, smartphones, biometric sensors, and large bodies of unstructured text such as customer surveys – had great potential value. By unlocking the insights hidden within these huge data sets, the company's engineers would be able to look beyond their test facilities and gain a better understanding of how cars and drivers behave in the real world.

To help its engineers harness these big data assets, Honda R&D needed two things: a comprehensive set of big data analytics tools, and a group of engineers with the skills and enthusiasm to use them. Honda's Quality Assurance division gathers customer feedback through its vast network of suppliers, dealers, and service centers around the globe. Customer feedback data is used to identify quality issues and improve understanding of customer sentiment.

Analyzing customer feedback quickly is critical for Honda's business success. It helps Honda put in place measures and policies to mitigate quality issues and increase part safety before it impacts customers and revenue. It also helps in improving the quality continuously by sharing the insights from customer feedback with R&D and production departments.

IBM Watson Explorer helped Honda read, extract, and organize key pieces of information in the customer feedback. It also provided visual dashboards and reports to highlight key patterns and insights uncovered from analyzing thousands of feedback submissions. A detailed dictionary was developed to help the system identify key information such as car parts, problem symptoms, and other automobile-related information.

Honda has optimized data science strategies to enable growth and a recent Forbes report suggests that the company forecasts a net profit of USD4.43 billion by the end of March 31, and in April Toshihiro Mibe became the new CEO of Honda. Honda recently released its fiscal year report and it has set an all-time record in automobile production in China with a year-on-year increase of 366.1%.

Watson Explorer's Cognitive Search and Natural Language Querying capabilities helped Honda's QA division reduce the time required to understand customer feedback by 80%. The cognitive insights provided by Watson Explorer also enabled employees to respond more quickly to quality issues and discover complaint patterns. Honda now has a much clearer understanding of the issues faced by its customers and accelerated responses. Overall, the results have greatly exceeded expectations, reduced costs, improved performance, quality, and productivity.