Factors that influenced component localization: a study in Honda Malaysia Sdn Bhd (HMSB) / Hamidah Rosli

The Multinational Corporation (MNCs) are faced with the choice of localising supplies when they establish manufacturing subsidiaries overseas. These organizational approaches for localization within large companies are many and varied. Localization activity presents significant opportunities to the firm’s for improving profits margins and reducing cost. Thus, the localization of component sourcing is a key concern to manufacturing subsidiaries in achieving successful performance.

This research investigates various factors that influenced component localization to make better decisions in the organization. Three factor influenced component localization were identified. These factors include the aspect of quality, cost and delivery which are significantly influenced toward the localization of component sourcing. Data were collected from Procurement Division associate in Honda Malaysia Sdn Bhd (HMSB). Information provided by this study expands our understanding of sourcing activities in HMSB. The result indicate that the most factor that contribute component localization is cost factor. This study also helps the company to get the clear picture of their supply chain management activities. Thus, the company can improve their competitiveness to increasing their productivity and profitability.