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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=Rbh-mfEkj2
I&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

Kawasa
ki

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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

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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
Harleys 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
site-specific, 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


(SiLK)
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 Davidsons
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
Harleys Architecture Integration Group (AI)
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Supplier
Selection
SiLK 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 didnt Harley want a full ERP system?
They just wanted to redefine materials
management department, which included

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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)

1. Design and
Foundation
2. Request Definition
3. Documentation
4. Receiving

6.
7.
8.
9.
10.

Project Tracking
Miscellaneous
Interfaces
Training
Other

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Qualitative Approach

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What do YOU look for in a


supplier?
Price

Integration Potential
Reputation
Track Record

Which are most


important?

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
thats what theyre 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
implementationthat is not as insurmountable as

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Pros and Cons


Supplier 1

Culture
Functionality
Cost

Supplier 2

Supplier 3

+ Culture Match

+ Functionality + Existing
Relationship
+ Change Mgmt.
- Cost
+ Training Processes- Too Formal + Cost
- Presentation
- Functionality (Web- Training Process
Enablement)

Training/Support
Experience

Self-Eval: 93.4% Self-Eval: 98.7%


Self-Eval: 96.8%

Which provider would you choose


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Alternatives
Option 1

Option 2

Choose
Supplier 2
(Best
Functionality)

Choose
Supplier 1
(Best
Support)

Keep SiLK
team intact
for support
and training

Use proven
3rd party
partner for
webenablement

Option 3
Continue
evaluating
Check
references/validi
ty

Which option do you like


best?
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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 Davidsons
Choice
On August 9th 1999, Oracle announced Harley Davidsons
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 Davidsons
Suppliers
Garry Berryman optimized Harleys 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 its 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 Oracles 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 twodimensional 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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