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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-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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“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
Yamaha
Suzuki
Kawasaki
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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 assurance, standardize systems and processes, and integrate directly with suppliers.
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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 Harley’s Organizational Structure?
Create Demand (CDC)
Produce Products Group (PPG)
Provide Support (PSC)
Circles of LeadershipInformation 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 (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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Harley Davidson’s Business Integration
Model (BI)People, Processes, and Technology
PeopleRestructured from decentralized organization to a hybrid organization
ProcessesCritical step is defining project scope
Focused on managing expectations
Team-led updates on project status
TechnologyTechnology decisions had to be deferred to Harley’s Architecture Integration Group (AI)
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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 relations.
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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 Definition3. Documentation4. Receiving5. Supply Management
6. Project Tracking 7. Miscellaneous 8. Interfaces 9. Training10. Other
75%
80%
85%
90%
95%
100%
1 2 3 4 5 6 7 8 9 10
Provider 1
Provider 2
Provider 3
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Qualitative Approach
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What do YOU look for in a supplier?
Price
Integration Potential
Reputation
Track Record
Financial Position
Experience
Ethics
Support/Maintenance
Completion Time
Quality/Value
Professionalism/Reliable
Ambition/Passion/Dedication
Which are most important?
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Individual OpinionsBraunschweig – Functionality is key
“that’s what they’re going to use day to day”We can work with personality conflictsCost 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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Pros and Cons
Culture
Functionality
Cost
Training/Support
Experience
Supplier 1 Supplier 2 Supplier 3
+ Culture Match
+ Change Mgmt.
+ Training Processes
- Functionality (Web Enablement)
Self-Eval: 93.4%
+ Functionality
- Cost
- Too Formal
- Training Process
Self-Eval: 98.7%
+ Existing Relationship
+ Cost
- Presentation
Self-Eval: 96.8%
Which provider would you choose and why?
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Alternatives
Option 2
Choose Supplier 1 (Best Support)
Use proven 3rd party partner for web-enablement
Option 3
Continue evaluating
Check references/validity
Option 1
Choose Supplier 2 (Best Functionality)
Keep SiL’K team intact for support and trainingWhich option do you like
best?Do you see any pros or
cons?
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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 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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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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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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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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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.