HARLEY DAVIDSON CASE STUDY SOLUTION

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HARLEY DAVIDSON MOTORS

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HARLEY DAVIDSON CASE STUDY SOLUTION

  1. 1. “a little bit special, a little bit mysterious, a little bit bad”
  2. 2. HISTORY PROBLEMS IN THE CASE STUDY SOLUTION GIVEN WHAT COULD BE OUR POSSIBLE SOLUTIONS INCASE OF THIIRS HIGHLIGHT OF THE POSITIVES AND NEGATIVES POINTS RECOMMENDATION
  3. 3.  Harley Davidson motor company was founded in 1903 by William Harley & Arthur Davidson  The company specialises in the production of motorcycles which makes sale world wide  By 1920, Harley Davidson had become the largest motorcycle manufacturer in the world (28,000 per year) with dealers in 67 counties.  It is headquartered in Milwaukee, Wisconsin and has manufacturing facilities in Wisconsin, Pennsylvania and Missouri and subsidiaries in Germany, UK, Benelux, France and Japan.
  4. 4. functions
  5. 5.  Instead of employing a functionally separated hierarchy, it structured the organisation to consist of three interlocking circles;  Create demand (CDC): responsible for sales & marketing  Produce products group (PPG): responsible for development handling & manufacturing  Provide support (PSC): responsible for fulfilling legal duties, financial, human resources and communication needs.  The circles were headed by standing committees or circles of leadership as they were known.  A leadership and strategy council comprised of executives from each group provided oversight of the circles to ensure that an integrated vision of corporate direction was maintained.
  6. 6. ITC ITC Produce Product (PPG) Create Demand (CDC) Provide Demand (PSC) ITC Leadership And strategy council
  7. 7.  Teamwork also played a role in the structure of the IS function at Harley Davidson  Instead of chief information officer, they had “office of the CIO” where it is having three directors.  Senior management looks to the CIO to be their internal consultant, to give them guidance and direction regarding technology’s ability to create business value.  Each circle of leadership had an information technology circle (ITC) attached to it.  It is made up of senior IS people & end users representing each site and function.  The role of the ITC was to understand group processes and interactions and to decide from a business perspective where the group should focus its technology efforts.
  8. 8.  Since purchased parts comprised of 55-60% of a motorcycle’s value, Garry Berryman (founder of SMS, 1996) thought incorporating suppliers and in somewhat ways making them partners with the company will influence cost.  By doing that, he knew the company will get the right product at the right time with the best quality and of course at the lowest price possible.  Why he came up with SMS was to help purchasing staff focus on value-adding activities in a more strategic way.
  9. 9.  Cotteleer & Davidson started investigating the possibilities for new systems & processes.  In October, 1997, they made a presentation to the PUG that laid out value proposition for instigating significant changes in terms of people, processes and technology
  10. 10.  People  -changes in behaviors that effect the way work is done.  Reduced non –strategic staff time and tasks  Error correction/resolution  Elimination of duplicate data entry  Increase in strategic procurement activities  Supplier development  Strategic sourcing  Process-  Changes in method used to get work done.  Reduced complexity through uniform procurement process across all sites  Enabling of the MRO strategy  Reduced procurement of cycle time  Reduced manual activity  Reduced confusion in supply base caused by site specific processes  Increased supplier integration in procurement process  Achieve Quality, cost & timing(QCT) target for procurement related to new product lunch  Technology  –changes in tools used to get work done .  Reduced complexity through common tools and system  Reduced system maintenance and obsolescence cost  Data consolidation for decision making  Enterprise view of supply base activity and performance  Enterprise aggregation of demand to leverage suppliers and contracts (across sites and functions)  Increased suppliers access to quality ,cost, timing and demand data
  11. 11.  With Berryman’s endorsement, they handpicked influential players from across the PPG  Using SMS as starting point, the SiL’K team tried to move from strategy to action by building a SiL’K team.
  12. 12.  Sponsors:  Garry Berryman (Purchasing)-VP of materials management  Dave Storm (IS) VP of planning and information services  Steering committee:  Garry Berryman (purchasing ) –VP of materials management  Dave Storm (IS)- VP of planning and information services  Tom Cullen (IS)-produce product group  Pat Davidson(purchasing) –Manager-Purchasing planning and control  Cory mason (IS) –CIO produce product group  Project team:  Julie Anding (IS)-Change Management representative  Chuck Braunschweig (PI)-Process innovation representative  Chuck Carter(Purchasing/PDC)-Purchasing representative for product development with experience as a senior MRO buyer in the power train organization, and previously a member of the MRO Best Practice Circle  Glenn Christainson (purchasing/THK)-Materials Manager at Tomahawk with over thirty years of Harley –Davidson experience  Dave cotteleer (IS)- Project manager  Eric Doman (Purchasing/GM)-Purchasing representative for Genera Merchandising  Eileen Jarosz (Purchasing/PDC)-Purchasing Engineer for product development with several years' experience as an OE buyer at york  Maxine Peissig (Purchasing /PTO)-Purchasing representative for the powertrain organization  Rick Peus (Purchasing/KC)-process manager for purchasing ,planning and control, also representing the Kansas City production facility  Kerry Sarder (Purchasing /P&A)-Senior buyer and purchasing representative for parts and accessories  Bob Walker (Purchasing/york)-Purchasing representative for york production facility ,having more than twenty years' experience in materials management at Harley –Davidson  Blaine Webster(IS)-System Analyst  
  13. 13.  On October 16, 1998, an RFQ for the new SMS was completely compiled and submitted to a shortlist of potential suppliers  The RFQ described the company’s SMS goal in details and recommending potential software suppliers to bid based on the specifications mentioned.
  14. 14.  ”we walked out there very confident that this was a company that knew what they were doing and had a process in place. We knew that the team was the decision-maker.”  Because of the time it took in making the RFQ, Harley Davidson knew what they want and how they wanted it.  In the conference, they presented their RFQ elegantly and with style
  15. 15.  Business value  Tell the truth  Be fair  Keep your promises  Respect the individual  Encourage intellectual curiosity  Business issues  Quality  Participation  Productivity  Flexibility  Cash flow
  16. 16.  Eight suppliers submitted a response to the RFQ and self-evaluation checklist  Harley Davidson team used the checklist as a quantitative measure of the initial functionality  Enter exhibit 10  A three hours presentation was scheduled for each supplier
  17. 17. “We didn’t just say: hey, everybody, vote for your top three and we will go.” Even though some people wanted to do that. I wanted to make sure that we were focusing on the process and the functionality and the pluses and minuses. So we went through each company and we did a pro and con list. -David Cotteleer  Evaluation of written proposals, presentations and notes from each provider was done.  Elimination was done narrowing the potentials providers to only three.  Provider 1  Provider 2  Provider 3
  18. 18.  Scored 93.4% on self-evaluation  Written proposal tailored to requirement document in RFQ  Functionality wasn’t good enough  Their package didn’t provide web- enablement (directly)
  19. 19.  Scored 98.7% on self-evaluation  Major ERP supplier  Functionality was perfect (web-enabled interface)  Extremely professionals, even more formal than what Harley Davidson are used to.  Their presentation was flawless and comprehensive  They provided package for writing training documentation  They didn’t emphasize methods or processes for assessing organisational needs & preparing people for change  More expensive than other providers
  20. 20.  Scored 96.8% on self-evaluation  Also a major ERP player  Functionality wasn’t fully demonstrated  Already engaged by Harley Davidson to provide systems in different functional area  Boilerplate used that some questioned whether they have even read the RFQ  They were late for the presentation  Presentation was a disaster  Harley Davidson felt antagonised by condescension of the supplier representatives.
  21. 21. January 1997 SMS rollout begin July 1997 Initial SiL’K planning meeting October 1997 Value presentation to purchasing leadership group Fall 1997 Brainstorming session November 1997 Allocation of resources from purchasing to form SiL’K team Nov 97-March 98 Identification of commonalities across sites April 98-Sept98 Systems team engaged May 98-ongoing Change management communication to stakeholder community Sept 30, 1998 Completion of RFQ & distribution to internal stakeholders for review Oct 9, 1998 Feedback from internal stakeholders Oct 16, 1998 Distribution of RFQ & invitation to bid Oct 25, 1998 Software provider confirm intention to bid Nov 5, 1998 Software provider conference Nov 16, 1998 Proposals due from potential software providers Dec 1-4, 1998 Formal presentation of proposals to Harley-Davidson Dec 7-11, 1998 Review of proposals & presentations Dec 11, 1998 Shortlist selection of three potential providers Jan 10-22, 1999 Two-day presentation & scripted demonstration at shortlisted sites Jan 30, 1999 Finalist selection
  22. 22.  The case study talks about the change program initiated by Berryman and on resulting enterprise software selection process and also the decision of which partner to choose in helping the company.
  23. 23.  Mason foresaw the following hurdles;  Harley Davidson’s absolutely overriding concern with unmet demand and a resulting wariness of any change that might impact production.  The company’s natural proclivity to continuous improve, rather than to transform business functions  ”we’re rooted in our heritage. I think part of it is the way our product line has evolved. We’ve got these big long life cycles on our products. They don’t change frequently. We always have continuous improvement, but larger scale, sweeping changes haven’t occurred unless significant events presented reason to change” -Mason  The company are used to their culture and are thinking any change to what they are used to will affect production.  Another problem we observed from the case study was the study seems to focus its functionality on purchasing only.
  24. 24.  Training  Thinking about procurement process differently (think out of the box)
  25. 25.  The study shouldn’t be focused on just the functionality of purchasing.  Harley-Davidson should expect change and try to adapt to it.
  26. 26.  Based on the self-evaluation, presentation and response to the RFQ, we would recommend provider 2 because of the promising technicality they showed in their demonstration.
  27. 27. THANK YOU

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