Operational Restructuring at Harley Davidson

            
 
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Case Details:

Case Code : OPER021
Case Length : 15 Pages
Period : 1996 - 2002
Organization : Tata Steel
Pub Date : 2003
Teaching Note :Not Available
Countries : India
Industry : Steel

To download Implementing Tata Business Excellence Model in Tata Steel case study (Case Code: OPER021) click on the button below, and select the case from the list of available cases:

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

Restructuring the Operations

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.

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

The engineers themselves dealt with the suppliers, handled logistical needs and managed routine personnel functions. Since these engineers were not experienced in these activities, H-D failed to cultivate good relationships with the suppliers. Often, the engineers selected the wrong supplier as they focused only on the technical aspects while choosing suppliers...

The Results

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...

A Long Way to Go

Such performance from a company which was at the brink of bankruptcy in early 1980s was viewed as one of the best examples of corporate turnarounds in the world. In the early 21st century, H-D was the only American motorcycle brand in the US, while the market was flooded with imported motorcycle brands from companies such as BMW, Honda, Kawasaki, Yamaha and Suzuki. Despite being dominated by imported models, which were technologically well advanced and more sleek and stylish, H-D remained the market leader in the US motorcycle market...


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