Revised February 10, 2021

Capacity Planning at Honda, Marysville, Ohio, USA1

The following demonstrates the challenges and complexities in understanding the

capacity of a “relatively simple” business process. Taken from manufacturing (not
services), this problem is typical of many systems. It has the following features that we
often see:

1. The process is performed by several resources.

2. Resources are shared across assembly lines (i.e., workers or machines must
multitask and perform multiple activities for every flow unit).
3. The resource that limits hourly production is not the same resource that limits
the process flow time.

From 2002 to 2009, Honda’s 1800cc cruiser-style motorcycle, the VTX1800, was
assembled in Marysville, Ohio from four major subassemblies. The following is a
simplified explanation of the assembly process. All resources are indicated in bold.

• The first subassembly produces the engine from three activities: a left and right part of
the engine block come out of the automatic mold every 2 minutes. These two parts are
welded together, requiring 1 minute of the continuous welding machine. Finally, it
takes the engine assembler 3 minutes to insert the two pistons and valves.
• The second subassembly produces the frame in two steps: first heavy metal bars are
bent in the 10,000-lb press in 1 minute. Then it takes 3 minutes to setup and weld the
multiple bars together with the same continuous welding machine to produce the
frame.
• The third subassembly consists of the front and rear fenders, both of which are formed
using the same 10,000-lb press for 1 minute per fender.
• The fourth subassembly makes the seat. It takes a seat assembler 7 minutes to cut the
padding, put it on a preformed piece of plastic, and wrap the two with synthetic
leather.

1 Professor William P. Millhiser prepared this case as the basis for class discussion rather than to illustrate either
effective or ineffective handling of an administrative situation. This mini case was created by William P. Millhiser for
the Zicklin School of Business, Baruch College, and is licensed under a Creative Commons Attribution-ShareAlike 4.0
license. It originally appeared in Anupindi et al., 1999, Managing Business Process Flows, 1st Ed., Prentice Hall, p. 78,
and was adapted and modified by W.P. Millhiser after he toured the factory. For more about the plant and its history,
see https://en.wikipedia.org/wiki/Marysville_Motorcycle_Plant .
• The first four subassemblies are put together by final assemblers. Adding the
handlebar, front and tail lights, radiator, wheels, drive shaft, brakes, cables, fluids and
electrical wiring produces a new bike that is ready for test drive. A final assembler
requires 30 minutes per motorcycle and uses a work cell layout (10 final assemblers
working independently on 10 different motorcycles).

The staffing is one automatic molding machine operator, one continuous welding
machine operator, one 10,000-lb. press operator, one engine assembler, two seat
assemblers, and 10 final assemblers. A process flow diagram is available in the
appendix. Throughout this analysis assume that the demand rate is identical to the process
capacity; assume that all processing times are deterministic (that there are no delays, backlogs, or
work-in-process inventory pile-ups in the process).

Analysis:
1. What is the one universal flow unit in this process?
2. Compute the process lead time (aka, flow time or throughput time) of the
VTX1800 production process.2
3. Identify the process bottleneck and compute the process capacity, the process
flow rate, and the process cycle time.
4. On average, how many motorcycles (at various stages of completion) will be in
the facility?
5. On average, what percentage of an hour is the welding machine busy? What
about the average final assembler?
6. Honda would like to reduce the process lead time of the VTX1800 assembly by 1
minute. What specific action(s) do you recommend?
7. Honda would like to increase the hourly production capacity to 20 motorcycles
per hour. What specific action(s) do you recommend?
8. Suppose market demand for VTX1800’s is actually 12 motorcycles/hr. What is the
bottleneck? Do they have an operations problem or a marketing problem?

2
The theoretical process lead time (or equivalently, the manufacturing lead time or throughput time or flow
time) is the time required to produce one motorcycle from start to finish assuming no delays or backlogs in
the system.