Case Study Presentation
By: Lillie Collins, Daniel Mayer, Stephen Buyachek, Michael Mayer
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What comes to mind when
you hear Harley Davidson?
http://www.youtube.com/watch?v=RbhmfEkj2I&feature=player_detailpage
Harley Davidson has a loyal fan base that interacts via
clubs, events and a museum.
For their 105th anniversary, in 2008, Harley Davidson
had 125,000 preregistrations for the event.
Here in Vegas they offer learn-to-ride classes,
motorcycle rentals and other events such as Street
Vibrations Rally in Reno, Nevada.
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“Taking the
Work out of
Bicycling”
Founded in 1903
William Harley
Arthur Davidson
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Born to
be Wild
1920, largest motorcycle
manufacturer in the world
with 28,000 motorcycles/year
with 67 countries
1998, shipped 150,000
motorcycles up 14% from
1997
Plan 2003, increase
production capacity by 100th
anniversary
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They all want a piece of the pie
Honda
Suzuki
Yamaha
Kawasaki
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Problems Harley Davidson Was Facing?
Strong Japanese competition (Honda, Yamaha, Suzuki)
Capacity constraints led to decreased international
market share
Due to rapid expansion, quality control suffered
Nearly went bankrupt in the 1980s
What are some ways that Harley Davidson could
recover from this?
Harley Davidson created a team to improve the supply
chain, focus on quality assurance, standardize systems
and processes, and integrate directly with suppliers.
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Change in the air
1995, Garry Berryman
joined
Brought the will to change
the purchasing organization
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Understanding Company Structure
What is unique about Harley’s
Organizational Structure?
Create Demand (CDC)
Produce Products Group (PPG)
Provide Support (PSC)
Circles of Leadership
Information Technology Circle
(ITC)
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Supply Management Strategy (SMS)
Garry Berryman (VP of Materials Management) led
initiative
Goal was to make purchasing organization a common
enterprise-wide point of contact
SMS intended to move the company from a sitespecific, transactional mentality to a long-term focus on
supplier relationships
What is your view of a Vendor vs. Supplier?
Berryman felt that a supplier had a vested interest in
your company while a vendor merely provided goods
for sale and could care less about your success
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Supplier Information Link
(SiL’K)
Forming the team
Mapping “as is”
Processes
Stakeholder Survey
Mapping “to be”
(future) Processes
85% of time spent on non-strategic activities
(reviewing inventory, data entry, etc.)
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Harley Davidson’s Business
Integration Model (BI)
People, Processes, and Technology
People
Restructured from decentralized organization to a hybrid
organization
Processes
Critical step is defining project scope
Focused on managing expectations
Team-led updates on project status
Technology
Technology decisions had to be deferred to Harley’s
Architecture Integration Group (AI)
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Supplier Selection
SiL’K team held a conference where they presented to
all their potential suppliers
Searching for partners that could provide functionality
and could adapt to their culture
Why didn’t Harley want a full ERP system?
They just wanted to redefine materials management
department, which included purchasing, procurement,
inventory, and supplier relations.
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Supplier Selection Process
October 16, 1998 RFQ (Request for quote) sent to
potential software suppliers.
Intent to bid had sent in by October 25, 1998
8 suppliers submitted response to RFQ and completed
self evaluation checklist
5 eliminated because of architectural incompatibility,
small size, ability to meet future needs, any who self
rated below 90% fit
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Functional Criteria (Quantitative Method)
100%
95%
90%
Provider 1
Provider 2
85%
Provider 3
80%
75%
1
2
3
4
5
1. Design and Foundation
2. Request Definition
3. Documentation
4. Receiving
5. Supply Management
6
7
8
9
10
6. Project Tracking
7. Miscellaneous
8. Interfaces
9. Training
10. Other
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Qualitative Approach
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What do YOU look for in a supplier?
Price
Integration Potential
Reputation
Which are most important?
Track Record
Financial Position
Experience
Ethics
Support/Maintenance
Completion Time
Quality/Value
Professionalism/Reliable
Ambition/Passion/Dedication
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Individual Opinions
Braunschweig – Functionality is key
“that’s what they’re going to use day to day”
We can work with personality conflicts
Cost is going to be added in there
Jarosz – Change management and implementation
“change people are going to go through is going to be ten times more difficult
than software implementation”
Anding – Functionality matching with strategy
“most functionality to the purchasing community and to the strategy and
direction that we want to move into for the future”
Pues – Organization personality and support they have behind it
“people like to do business with people they like”
Cotteleer – Functionality
“we can deal with personality conflicts for the implementation…that is not as
insurmountable as implementation risk based on functionality that doesn’t
exist”
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Pros and Cons
Supplier 1
Culture
Functionality
Cost
Training/Support
Supplier 2
Supplier 3
+ Culture Match
+ Functionality
+ Change Mgmt.
- Cost
+ Existing
Relationship
+ Training Processes
- Too Formal
- Functionality (Web
Enablement)
- Training Process
Self-Eval: 93.4%
Self-Eval: 98.7%
+ Cost
- Presentation
Experience
Self-Eval: 96.8%
Which provider would you choose and why?
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Alternatives
Option 1
Choose
Supplier 2 (Best
Functionality)
Keep SiL’K team
intact for support
and training
Option 2
Choose Supplier
1 (Best Support)
Use proven 3rd
party partner for
web-enablement
Option 3
Continue evaluating
Check
references/validity
Which option do you like best?
Do you see any pros or cons?
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Plan 2003
In 1996, Harley Davidson announced
their ambitious “Plan 2003”.
Their goal was to double
manufacturing capacity to 300,000 by
the year 2003, coinciding with their
100 year anniversary.
Do you think they were able to exceed
their goal of 300,000 motorcycles by
2003?
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Harley Davidson’s Choice
On August 9th 1999, Oracle announced Harley Davidson’s
selection of Oracle Internet Procurement, a premier Oracle ebusiness solution, to streamline and support its procurement
function across all domestic manufacturing sites.
The need to standardize arose as a result of the prior
establishment of essentially separate procurement systems at each
of its domestic manufacturing sites which led to numerous
separate systems, fragmentation of procurement data, and manual
process integration across sites.
As a result, they will be consolidating all U.S. manufacturing
production and non-production related procurement across its
eight domestic sites into a single automated procurement system,
in order to streamline processes, reduce costs, and consolidate
demand across the enterprise.
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Harley Davidson’s Suppliers
Garry Berryman optimized Harley’s supply chain by reducing their
3,000 maintenance, repair, and operating (MRO) suppliers to
three primary ones.
The direct suppliers that provide the parts that go into making
motorcycles and accessories were consolidated from 1,000 to 350.
Why did Harley reduce the number of suppliers when they just
implemented a system to help manage this kind of purchasing?
By reducing the number of suppliers, Harley could focus on
developing a deeper relationship with these key suppliers by
inviting them to get involved in product design and manufacturing
processes.
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Relationship with Suppliers
From what we learned in class, what are some ways Harley
Davidson could open it’s doors to suppliers and exchange
data?
Harley Davidson standardized their forms and procedures
and required all suppliers to use EDI. As not all suppliers
had the capabilities to perform EDI, Harley Davidson
eventually created a web based portal called the Harley
Davidson Supplier Network.
Harley also utilizes bar codes and electronic trigger systems
for replenishing parts so that their systems notify suppliers
when they are running low on inventory.
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H-D Supplier Network
Harley Davidson picked Manugistics NetWORKS
collaborative solutions to power the H-D Supplier
Network. Manugistics also provides seamless integration
with Oracle’s applications. Together, Manugistics and
Oracle will enable Harley to leverage best-in-class supply
chain optimization and enterprise resource planning
(ERP).
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Harley Davidson Supplier Network
The Web Portal is designed to enable Harley Davidson and its suppliers to
conduct transactions, ranging from placing purchase orders to invoicing, over
the internet.
Nearly 300 of Harley's 695 parts suppliers log on to applications through the
supplier portal.
Suppliers can view production forecasts, account status, and two-dimensional
drawings of parts while also being able to submit shipment notices and receive
inventory-replenishment alerts.
The portal eliminates the expense of EDI and is proving even more reliable
than EDI.
Overall, the portal has allowed Harley to work with longtime suppliers to
achieve lower costs, consistent quality, and improved delivery performance.
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