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Group 6 Anirudh Kanodia

Ankita Sehjpal

Khem Singh

Hemant Reddy

Rakesh Ranjan

Shripat Bagla

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Contents 1st Part History Speaks Challenges Bounce Back 2nd Part Issue Box

– How Honda was able to manufacture better quality bikes at lower cost ?– Quality assurance and Quality circles ? Why it was unsuccessful ?– Is it right to focus only on quality improvement by overlooking cost

considerations?– Up to what extent has Harley-Davidson been Successful in the

international and domestic US market compared to Honda according to you?

– Is the EIG a unique innovation of Harley-Davidson? Q&A

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History Speaks1903 Harley Davidson founded in Milwaukee by William Harley and Andrew

Davidson

1920 Harley-Davidson was the largest motorcycle manufacturer in the world

1929One of the few companies to survive The Great Depression

1963 Has a solid 70% market share in U.S

1965 - 1983 Honda lightweight cycles had successfully penetrate US market, having

44% of the market by 1983

1973 - 1983 Harley's market share went from 77.5% to 23.3% in 1983

1987 Listed on NYSE

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Challenges

1. Refuse to change from (a) to (b)

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Challenges contd.

2) High in parts inventory

3) Down in quality and reduce productivity                                      

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Challenges contd.

• Corporate management focused mostly on short term returns.

• Belief in quick fixes for problems, such as throwing in computers and state-of-the-art machinery to improve productivity.

• High break-even point(53,000 bikes) that left the company vulnerable to unpredictable market fluctuations.

• Management that woke up too late to the threat of foreign competition because of the "it can't happen here" syndrome.

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Bounce Back

Learned about Japanese plants and Honda

Implemented the production improvement through Just-in-time (JIT), Materials-as-needed (MAN) & Quality Circles (QC)

Educate the middle management and front line people in turning the plant to profit center by reducing defect products and increase productivity.

Participated and learned about customers concerns and complaints at Harley Owners Group (HOG) rallies & creates changes

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Bounce Back

Harley Owners Group (HOGs) is much more than just an organization. It’s 1 million people around the world united by a common passion: making the Harley-Davidson dream a way of life

Recreated the public image with high quality licensed goods (i.e. leather jackets, jewelry, accessories, badges, caps etc.)

How Honda was able to manufacture better quality bikes at lower cost ?

Initial thought:•Cheap Japanese labor•Huge advertising budget•Dumping practices of Honda

Real reasons for Honda’s success:•Kaizen•JIT•Extensive use of statistics to measure quality•High Inventory turnover

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Kaizen:•practices that focus upon continuous improvement of processes in manufacturing, business processes, and management.

The five main elements of kaizen

* Teamwork

* Personal discipline

* Improved morale

* Quality circles

* Suggestions for improvement

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JIT

An inventory strategy that strives to improve a business's return on investment by reducing in process inventory and associated carrying costs.

Main benefits of JIT include:Reduced setup time. The flow of goods improves. Employees with multiple skills are used more efficiently. Production scheduling and work hour consistency synchronized with demand.Increased emphasis on supplier relationships.

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Quality Circles and Quality assurance? Why it was unsuccessful ? Quality Circles (QCs) :- a small group of worker-

management committees who meet once a week, on a scheduled basis.

to talk about production problems plans to improve productivity and quality resolve job-related gripes on both sides.

They then propose solutions and make a sincere attempt to implement real change.

QCs helps to increase employee involvement in quality goals and to improve communication between management and workers.

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Quality Assurance (QA) • systematic monitoring and evaluation of the various

aspects of a project, service or facility

• maximizes the probability that minimum standards of quality are being attained

• QA cannot absolutely guarantee the production of quality products.

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Why it was unsuccessful ?

The main reasons for quality circle failure includes:

–Lack of Top-management support

–Quality circle members' commitment

–Problem-solving skills

–Co-operation from middle and first-line management.

–Low Quality circle members' turnover

–The nature of the task

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Is it right to focus only on quality improvement by overlooking cost considerations?• Cost hasn't seemed to impact HD's business momentum in

large part due to the success of their marketing strategy and brand image.

• Quality was the front where it needed its most concentration because

sales dropped drastically due to low quality competitors were exploiting this weakness by providing low

cost high quality motorbikes

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Harley-Davidson’s Success in the international and domestic US market as compared to Honda

Reasons that contributed to the success of HD are:

–Total Quality Management (TQM) practices

–Lobbied Washington to temporarily raise import tariffs from 4 to

40 percent on non-US motorcycles, and

–Began their well-known and highly embraced branding and

marketing strategy.

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• Harley-Davidson’s Has Been A Great Success Story.

• Today, Harley-Davidson motorcycles are in demand not just in US but throughout the world.

• Twenty-two percent of motorcycles produced in the New york, PA final assembly plant are produced for export, and much of Harley's growth is due to exports

• Harleys never competed with Honda head-on. Their marketing strategy has always been focused on selling a lifestyle instead of a mere motorcycle.

• Honda on the other hand has the widest product range of all time. Their products have been attracting masses because of their affordability and durability

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Is EIG a unique innovation of Harley Davidson

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Is EIG a unique innovation of Harley Davidson

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