HARLEY DAVIDSON CASE STUDY SOLUTION

“a little bit special, a little bit
mysterious, a little bit bad”

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

 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.

 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.

ITC
ITC
Produce
Product
(PPG)
Create
Demand
(CDC)
Provide
Demand
(PSC)
ITC
Leadership
And strategy
council

 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.

 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.

 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

 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

 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.

 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



 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.

 ”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

 Business value
 Tell the truth
 Be fair
 Keep your promises
 Respect the individual
 Encourage intellectual curiosity
 Business issues
 Quality
 Participation
 Productivity
 Flexibility
 Cash flow

 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

“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

 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)

 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

 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.

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

 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.

 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.

 Training
 Thinking about procurement process
differently (think out of the box)

 The study shouldn’t be focused on just
the functionality of purchasing.
 Harley-Davidson should expect change
and try to adapt to it.

 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.

HARLEY DAVIDSON CASE STUDY SOLUTION

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HARLEY DAVIDSON CASE STUDY SOLUTION