Operational Restructuring at Harley Davidson

In the mid-1990s, H-D restructured its operations related to the supply chain to focus on three elements - cycle-time management, relationship management and sustainability. Since 1995, the company had taken many measures to improve its relationships with its suppliers and to improve its SCM practices. These exercises were primarily aimed at increasing productivity and production, and reducing purchasing, manufacturing and distribution costs.

Involvement of Purchasing in Design

During the early 1990s, H-D's engineering division handled design and testing related activities almost entirely on its own - without any support from other divisions such as production/purchasing.

By the early 21st century, H-D had achieved significant progress in its operational restructuring efforts. Between 1996 and 2000, the company had reduced its purchasing costs by $37 million. According to reports, this was commendable since had the company continued with the same method of purchasing, it would have seen costs increase by nearly $40 million. H-D also improved its inventory management system. In 2000, it was able to run the operations with inventory for 6.5-10 days, as compared to 8-15 days in 1996. By 2000, the productivity at H-D's distribution division had doubled and the order fulfillment time was cut short to just two days...