Harley Davidson: Supply Chain Management

Harley Davidson Supply Chain ManagementIntroductionIn the business market there are m either different organizations, but those who meet adept tone, design, and manufacturing process with lower-ranking cost and meet market requirement they wins like Harley-Davidson.The principal(prenominal) objective of Harley- Davidson was to focus on Just In clipping manufacturing, Supply Chain Management and Total fibre Management in order to compete with other organizations. In this slipperiness study the emphasis is on how they developed the Supply Chain Management, provider Relationship, durationd lurch and Quality. How sharing of information help them to implement just in time at provider end ,its brief history ,problems it had faced in mid 70s, the remedies, the steps followed to overcome the downfall, with emphasis on Supply Chain Management, and lastly it concludes with the findings and learnings from the overall case studyBrief HistoryHarley Davidson is an Ameri can buoy manufact uring motor cycle company which was built in 1903 by William Harley and author Davidson. In year 1970 the decision pickings power was in the hand of cooperate parent company American machine and foundry at that time Harley Davidson was sole surviving company who were reservation heavy weight motor cycle in united states.AMF wanted to take the advantage of the market so decide to maturation the crossroadion neglecting the importance of provision chain which made the quality go out of control. In 1981 new attention was appointed by Harley Davidson to get out of this issue .Better trading operations towards better Bikes was their goal.Problems faced by Harley DavidsonIn the mid 1970s H-D had tough times, the market share was decreasing due to the poor quality of the product. After a detailed analysing it became evident that overproduction has resulted in a defocus from the Supply Chain Management. The quality of the H-D product which was the basis for their success did no longer exist. The low account of the Inventory Turns led to a high level of Stocks. With the demand decreasing and the high stocks the company was cash ridden. The recession also had its impact on low re unit of ammunitions of the company. Another problem was they had no control over the suppliers and supplier quality was unpredictable which added to client dissatisfaction.Remedial Measures TakenIn 1980 Harley Davidson really had bad time so the management decided to take action by organizing there company with new start, management launched production schedule which increased inventory turns.Inventory Turns is square up as the ratio of cost of goods and average inventory.The inventory dropped to 4 million Dollars, with high level of productions. Inventory turns increased from 16 to 28 million per year. supplier base was reduced from 320 to 120 it leads to focus on supplier and better kindred with supplier.Set up times were reduced drastically, it made smaller life- coat feasible which increased the production.Harley Davidson introduced SUPPLY CHAIN MANAGEMET and JUST IN TIME MANAGEMENT which help to achieve unbroken improvement in quality and delivery services,so there was drop in warranty cost also helped to eliminate inventory.Shift of production focus from PUSH (anticipating demand) to PULL (responding to orders).Supplier involvement chopine was evolved to improve the product development efficiencies and effectiveness which lead to development cost and reduction of developed time and reduce the cost and increase product value. Suppliers must install JIT, Statistical Operator Control, and should work for continuous improvements. Supplier development must increase the performance and readiness to meet the long end point add uping need.Rewards and OutcomeThe main achievement of Harley Davidson is Quality and Delivery, it had established its base in the market.Introduction of just in time management helped them to work according to customer inescapably wh ich led to customer satisfaction. Continuous improvement and bench marking the supplier helped them to improve the quality of the product.AnalysisSupply chain management-It is an activity which is outlined as planning of operations, implementing the operations and unequivocal the operation of the supply chain to satisfy customer requirement as efficiently as possible. It includes production plan Order processing, inventory management and customer services.Just in Time or Man Just in time helped Harley Davidson by eliminating shave by using quality of raw material, producing right quality of product in right place at right time. It also improves the product quality, increase the productiveness and decrease the cost. Harley Davidson called just in time as man (material as needed).just in time help Harley Davidson to develop trust between suppliers, it also helped to increase inventory turns which generate the cash flow.Principles and Technique of just in time used by Harley Davidso nTotal quality control- The purpose of total quality management is to focus on customer satisfaction by improving process, high quality of product and services. Total quality can be achieved by Employee involvement program and stastical operator control.Reducing batch size production- small batch size production helps to reduce inventory, reduce handling cost, silver production flow and improves quality of the product.Reduce set up time- Reduction of set up time helps to make smaller and larger size doable. It also increases the productivity and quality. Reduces inventory, space and time.Pull system (kanban)- pull system is a method in which we can control the flow production base on customer demand. In this system production is through in small batches in case if there is any problem at any point of operation the whole production line will quickly come to stop. Implementation of pull system can help you to eliminate waste in handling, optimize the shop floor space usage and impro ves on time delivery to customer.Supplier development- supplier development is long term relationship between customer and supplier that intent to benefit both. Supplier should not be treated as external source but situation of supply chain management. Supplier development is actually developing supplier in same way the employer are developed, providing scheduling information about product and involving supplier in design stage can improve the quality of product. Darren docemsolo lean supply chain mgntTotal employee involvement- Each and every employee should be committed and dedicated to their work.employeer should be involved in quality circle with in the organization in order to discuss and develop management issue. Quality circle to encourage employee to take responsibility of their work which helps to improve quality and elimination of waste.Supplier selection The best decision taken by the management of a Harley Davidson was proper selection of supplier .In the past there wer e lot of suppliers so quality of the product was unpredictable single sourcing helped them to check the defect .selection was done by better interviewing the supplier and understanding supplier capability.Supplier relationship Another important step taken by Harley Davidson was improvement of supplier relationship .Their past relationship with suppliers was not that good which lead to quality and delivery problem ,weak relation with supplier can affect the organization and entire supply chain. Sharing information and conducting problem solving programs like statically operation control and employee involvement program helped Harley Davidson to improve the long term relationship. Working together with the supplier in various forms improves effectiveness and efficiency of operations in a company. Good use of relationship with the supplier can enhance the resource and capability of the company and hence it can improve market effectiveness. Harley Davidson would conduct meeting twice a year and looked for continuous improvement process.Continuous improvementcontinuous improvement is a management policy that sees quality improvement as an on-going process, and increasing improvement rather than once and for all improvement efforts. It helps to improve the supply chain as a whole.Future TrendsHarley Davidson has diversified futuristic plans. Apart from being a leader in the Motorcycle manufacturing, they are into Branding of their logos. Supplier trainings, which includes a detailed study of their past strategies, problems and the way they have approached the solutions. The innovative Supply Chain Management systems which they inculcated in the organization. Also their aims areBeing serviceman class customerMake worlds profitable motor cycleTo have best supplier in the worldTo be recognised by customer for quality, value of product, servicesKey pointKey points that we could learn from this layout areQualitycostDelivery and demandDevelopmentManagementQuality is the main objective of each and every organization but is should also be cost effective. The efficient logistics must ensure that the delivery is on time, which in turn increases the demand. Continual improvement of the product is achieved by development of research, training and supplier relationship. Management must be actively involved in strategically controlling the operations of Supply chain.ConclusionFrom the above study we can conclude that how Harley Davidson regained their reputation in the market by applying Supply Chain Management, just in time program and also good relation with the supplier helped them to improve their quality and standard of the product. Supplier quality was unpredictable in past, sharing information, good scheduling and teaching their supplier to adapt just in time program improved Harley Davidsons quality, delivery and sevices.Thus applying supply chain management organization can improve their product range and make a better way for their future.