Harley-Davidson, Inc. Articles Introduction Trouble Statement Supply Management Approach Project Range Project Execution Software Seller Finalists Advice 2004 revise References Harley-Davidson is an American motorcycle company with a rich history and cultural custom. Founded in 1903 in Milwaukee, wisconsin, WI, Harley Just recognized its 100th anniversary which has a series of events around the world that culminated in hundreds of thousands of motorcyclists coming back last summer time on the shores of Lake Michigan. In 1929, there was 241 motorcycle manufacturers in the US.
After the Despression symptoms, only two remained: Harley and Indian.
By 1953, Indian went down of business, leaving Harley-Davidson as the sole American motorbike manufacturer. Economical difficulties in the 1970’s triggered the parent company, AMF putting the motorcycle split up for sale. With out a buyer, several Harley managers bought out your company and rescued that with a organization turnaround that included manufacturer extensions in licensed items, such as apparel and related accessories. At this point a publicly owned firm, Harley provides scored double digit growth intended for eighteen consecutive years.
Harley ransformed by itself into a good marketing company with a focus on way of living image and product quality. The case occurred in retrospect from 1997-1999. The purpose of the case was to management for this huge manufacturing firm. Recognizing that the purchasing procedure for obtaining materials and parts was out of control, management coordinated a project to understand the purchasing method and actions, solicit opinions from the 800 people who would be affected by the newest system, and create a finish transformation in thinking and action regarding the procurement and management of incoming products.
In addition , management wanted to approach the company via a short-term transaction getting basis to a long-term romantic relationship with suppliers. In addition to selecting a great ERP system, Harley Davidson was thinking about developing dealer relationships with key distributors. They needed the new program to make this easy development. In case, the managers went in terms of making the distinction between vendor and a provider indicating that a vendor is usually someone selling on the street spot and a supplier was an extension in the primary business. The company had highly fragmented purchasing capabilities.
Even though most product development and manufacturing continued to be in the US, components represented nearly 75% of product cost. They employed different bills, schedules and procedures in every single facility. Suppliers complained that they were coping with three diverse companies, sometimes receiving purchases from various facilities in the same time. Harley had hundreds of suppliers and no system of coordination or relationship administration. Because the firm was rich in ethnic traditions of gradual improvement and top quality ideology, dramatic change was an not likely outcome.
While n any major application project, the organization faced 3 types of risk with this undertaking; size, experience, and framework. The size of the project decided how much risk was involved with terms of cost, period, and dealer relationships. Moving over over to a centralized purchasing system might have resulted disruptions in supplies and production flow, costing the corporation in dropped sales and dealer/customer associations. Failure with the system to satisfy the anticipations of users would expense the administration credibility with employees and suppliers. We do not know the selection cost.
Because project contains only two ERP quests in effort and delivery management, it had been not as large in size and posed simply moderate organizational risk. Harley davidson employees had experience with various software systems to support different activities. They were doing not have a great ERP system, so there was some risk involved in the skill of all purchasing activities between facilities below one software. Because the managers understood the strong culture and good the company, that they structured the project thoroughly to create a enhancements made on thinking before creating a difference in software.
The strategy they accustomed to survey getting people, require representatives from all areas in the company, be familiar with process, assist suppliers, and choose an ENTERPRISE RESOURCE PLANNING provider to grow with company and its future demands. All of these elements helped to lessen the risk of the project. To acquire a better comprehension of the range of their problem and to program the task, managers chosen to survey those who were in charge of purchasing. They will intended to find out what activities getting people completed and how much time and effort entered procuring supplies.
Everyone was surprised to learn hat 85% of purchasing time was being spent in non-strategic activities, such as keeping track of inventory, info entry and expediting. While the company got 200 purchasing staff, the survey says over a couple of, 000 people were issuing order orders. Quantitative estimates provided a potential personal savings of an ERP implementation for purchasing at $34 million. Info like these helped to acquire people devoted to making the project profitable. The project scope had to identify the purchasing activities, the stakeholder groups (owner, driver, or participant), plus the target audience (800 people).
In addition , the range had to fine-tune the details required to create a computer software quote obtain and a listing of supplier collection criteria. This helped to reply to the following inquiries: Who will use the system? What will the system have to do? How can all of us make the setup a success? Which in turn vendor can easily best provide the functionality, support, and international potential? Even though the process took over two years, Harley managers performed a comprehensive Work of picking the ENTERPRISE RESOURCE PLANNING solution. It appears that the Man made fiber team would a good Work preparing for the project confirmed by the mindful mapping of the “as is rocess associated with the “to be procedure.
This helped to reduce and manage job scope slip. Typical of lower risk, low technology tasks, the details in planning generally pay dividends as reduced execution time in a lower over to a new system. Poor planning can lead to huge cost over works and holds off in system implementation. More severe problems can occur if the system can not deliver on guarantees made in preliminary project Reason. These are the kinds of complications over which job managers can lose their particular Jobs. We think that exterior consultants could have helped with the initial ssessments.
This might have helped Harley Davidson get a broader picture of the purchasing firm and allowed for the use of guidelines from other companies. They may did thiswe have no idea from the case. Great organizing that is myopic does not necessarily lead to the very best solutions. The time Harley Davidson spent on your initial phase with the project is much longer compared to either Tektronix or Carbonilla. In the case of Tektronix, they were happy throwing more cash at rendering problems to be on schedule. Tektronix also suffered from their shortage f preparing with previous implementation failures.
Cisco been successful in meeting the brief, implementation plan through the use of a really standard, off-the-shelf system. Significantly less customization of any ERP system causes lower costs and quicker implementation schedules. A typical system is easier to upgrade as well. Customizations are usually required to assure systems can easily meet a companies reengineering and ERP customization when implementing a great ERP system. The effective ERP selection at Harley davidson Davidson had not been a result of planning alone. The situation paints the style of the tradition of HI-DEF well.
This culture is usually brought ut in the design of management and the approach to the project as well as the selection process. Their use of their internal business integration (81) of procedure, people and technology was consistent. It could send a good message to the organization. Their particular definition of full-time members like a Tuesday through Thursday was interesting. This is contrary to our experience of Wednesday through Fri being fulltime. The reason they will gave does have merit. Full time members can easily lose program the daily business rather than realize the effect of pending changes.
Relatively small obstacles can turn to be able to be the largest problems of system approval. There are some individuals who think a fresh ERP program can repair all of a great organization’s illnesses. This is simply not true, since bad techniques are often the root cause of a large number of ERP unit installation failures. The last paragraph of the watch case mentions problem of linking the Supply Management Strategy (SMS) and purchase system. With no link, this technique could have failed. The risks of not backlinks were greater than with backlinks because the procurement system needs to be looked at as a great enabler with the SMS process.
Harley Davidson also developed additional criteria before embarking on the ERP selection process. One particular was that of platform standardization. The case did not mention the typical but produced note with the disqualification of 1 vendor’s merchandise due to “architectural incompatibility. IT does need to lead and develop requirements as part of the ENTERPRISE RESOURCE PLANNING and other operational strategies. Scalability of the purchasing system should also be considered. They had a basis to work from pertaining to future growth and development. An example right here would be to standardize on Oracle for the database and Java screenplay language intended for the web-enabled application advancement.
The group selected 3 finalists based on a number of factors. By enabling the software suppliers to charge themselves quantitatively on practical variables, they had several “hard info, prejudiced as it was. Every vendor wished the opportunity and the businessof course they would level their efficiency as high as possible! There may have been no record differences amongst any of them. Plainly the motivation for the vendor was to win the deal, not always be accurate within their capability assessment and potential fit for your organization.
Computer software vendors are notorious pertaining to assuring virtually any potential significant customer that their system will be perfect for them! The qualitative tasseau of fuzzier attributes (low, medium, high) was perhaps useful to the choice team, however, held louper bias. Finally, three software program vendors managed to get to the last round. The case was created such that there appeared to be a close tie among two, having a confounding varying for number three. The reference to provider three’s existing project was interesting. There exists reference to the political and economic advantages.
It appears that having an existing job was a account. This may describe the poor first-run performance by group because they may have thought they will get the job. The team tried to be objective. Ultimately, the organization largest customer bases of Supply Chain Management on the globe. Harley is usually using their Collaborate and Delivery Management modules. The themes provide Harley davidson with a web-based private trading network providing you with visibility and transaction performance through a site. In retrospect, we would have got recommended that Harley execute a few items differently.
Initially, they could have researched the literature in what types of challenges mechanistic manufacturing organizations encounter when they make an effort to implement a great ERP program in a remarkably inflexible environment. There was enough research and case analysis open to do this. While they were plainly aware of potential change resistance and the need to get all stakeholders involved, the amount of time their search and selection process necessary was silly in present day business environment. We speculate that the pure demand and high rates of their merchandise allowed these to wallow within their inefficiencies a few more years just before they had to bite the bullet.
Second, obtaining the advice of knowledgeable software and provide chain consultants earlier in the process probably would have saved a while and developed defined target. Often , managers use the willpower and tips of onsultants to reinforce the need for organizational change. With the getting process out of control, they could have brought in a few purchasing competence to clean up some of the clutter before selecting a software system to aid organize the Third, we wondered the research methods and opinion of the data. process.
Nevertheless , if Harley eventually got what they needed and it turned out to be a success for these people, then probably their strategies were valid. We do not understand final cost fgures and messier information on implementation (schedule, support, etc . ). There are plenty of technical details that we likewise know nothing about. 3 out of 5 comments inside the making the decision section suggest the individuals side was more important which the functional side. In reality, features of any kind of finalist ought not to be questioned. To access the final rounded, the product needs to work.
It can be analogous to using to have a specific quality level to sell goods. The team was looking at the project through the implementation and buy-in viewpoint of the end users, which was ideal. They attempted to remain near the end users from the start. Harley was successful in transforming the scattered purchasing functions right into a supplier marriage management program. The distributor portal today serves 300 of its 695 suppliers. In 2005, the company will be extending site access to the accessories and merchandise suppliers. This year, Harley davidson will have regarding 300 THIS employees.