1. Case Study
Presentation
By: Lillie Collins, Daniel Mayer, Stephen Buyachek, Michael
Mayer
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2. What comes to mind when
you hear Harley Davidson?
http://www.youtube.com/watch?v=Rbh-
mfEkj2I&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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3. “Taking the
Work out of
Bicycling”
Founded in 1903
William Harley
Arthur Davidson
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4. 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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5. They all want a piece of the pie
Honda Suzuki
Yamaha Kawasaki
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6. 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
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7. Change in the
air
1995, Garry Berryman
joined
Brought the will to
change the purchasing
organization
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9. 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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10. 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
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11. 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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12. 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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13. 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
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14. 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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15. Functional Criteria (Quantitative
Method)
100%
95%
90% Provider 1
Provider 2
85% Provider 3
80%
75%
1 2 3 4 5 6 7 8 9 10
1. Design and Foundation 6. Project Tracking
2. Request Definition 7. Miscellaneous
3. Documentation 8. Interfaces
4. Receiving 9. Training
5. Supply Management 10. Other
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16. Qualitative Approach
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17. 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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18. 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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19. Pros and Cons
Supplier 1 Supplier 2 Supplier 3
Culture + Culture Match + Functionality + Existing
Relationship
+ Change Mgmt. - Cost
Functionality + 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 and
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20. Alternatives
Option 1 Option 2 Option 3
Choose Choose Continue
Supplier 2 (Best Supplier 1 evaluating
Functionality) (Best Support)
Check
Keep SiL’K Use proven 3rd references/validity
team intact for party partner
support and for web-
training enablement
Which option do you like best?
Do you see any pros or cons?
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21. 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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22. Harley Davidson’s Choice
On August 9th 1999, Oracle announced Harley Davidson’s
selection of Oracle Internet Procurement, a premier Oracle
e-business 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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23. 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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24. 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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25. 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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26. 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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