TRANSFORMATION OF TRANSFORMATION OF HARLEY-DAVIDSON HARLEY-DAVIDSON - - A CASE ANALYSIS A CASE ANALYSIS REYNALDO ROBLES PROJECT MANAGEMENT, MAINTENANCE & QUALITY
TRANSFORMATION OF TRANSFORMATION OF
HARLEY-DAVIDSONHARLEY-DAVIDSON - - A CASE ANALYSISA CASE ANALYSIS
REYNALDO ROBLES
PROJECT MANAGEMENT, MAINTENANCE & QUALITY
Short- Term 1. A. Growing Production Backlog of almost a
year B. If need to Export Production Abroad
Long-Term 1. Renewed efforts by Japanese firm (Kawasaki ) 2. Europe as the new battleground for
heavyweight motorcycle segment.
STATEMENT OF THE PROBLEM
CAUSES OF THE PROBLEM
STRENGHTSMajor US motorcycle maker
Nation’s number one seller of motorcycles (heavyweight)
Has greatest market share(49%) of heavyweight segment
Excellent brand recognition
Superior customer loyalty. High repurchase intent
Quality engineering of motorcycles unit
Low turnover rates
STRENGHTSSold through a strong dealer network, which also provides service and sales of parts and accessories
Excellent and long lasting relationship with its dealer, suppliers and employees
Promoting motorcycle club
With licensing activities which is a great source of advertising
Large quantity of patents and trademarks deposited
WEAKNESSESHas not been able to fully meet the demand allowing other entrants to penetrate the market
Foreign competitors have lower manufacturing cost
Products not desired by younger motorcyclist
OPPORTUNITIESIndustry Expansion
International demand expansion
THREATSRenewed attempts by leading Japanese firm to gain share of heavyweight segment
Possible emergence of Europe as the new battleground for heavyweight motorcycles
Foreign motorcycles companies focusing their sales on younger riders
DETAILED ANALYSIS
Increase in production
capacity = quality problem
Big demand=backlog of nearly one year or
81,000 units
Exporting Production
International Sales
1992..$263 million..28% of net income
1993..$240 million..29%
of net income
Problem 2 & 3Threat-Kawasaki entering in
heavyweight segment
Threat-new battleground for heavyweight motorcycles
REEBOK ( shoe industry )
45 & above…..strong market
strategy….enter in 12-35
segment to compete with Nike
- Almost closed down when Honda enter in their strongbase
Need to improve quality of the firm’s distribution system,
dealer network and customer support activities
DELL COMPUTER CORP.
Strategy…adopt “Build-to –Order Manufacturing model
( product-focused to increase market share)
DECISION CRITERIA AND ALTERNATIVE SOLUTION
Problem 1 1. Adopt a Six Sigma Approach Rationale : In an attempt to address the
backlog orders, a total package of statistical measure, a goal and system of management
PROS - Genuine focus on the customer - Data and Fact Driven Management - Processes are where the action is - Proactive management - System of management - Applicability as it originated from US firm - Reduces cycle time - Reduces defects CONS - Investment in training
2. Transform from a Job Shop Approach to a Cellular Process
Development
PROS
- Rework will be lessened
CONS
- New sets of training
- Additional sets of control and possible errors might be encountered
Problem 2 1. Strategizing the Reebok’s concept of
entering into other segment of the market
Rationale: To expand the share of the market
PROS - Market share will increase - Capture the demand of the larger
market - Answer the need of the customer
( focus ) CONS Niche will somehow erode Out of concentration
2. Concentrate on the heavyweight category
Rationale: To defend their expertise segment of the market
PROS -Preserving the pride of Harley-
Davidson CONS -Lost opportunities in the market -Can’t cope up with the demand -Will not answer the need of the
customer ( focus )
Problem 3
1. Implement a Dell Computer Corporation “ Customer Focused Products”
Rationale: To customize certain parts prior to its order
PROS - Orders will be addressed - Inventory will be controlled - Will eliminate problem in mass
customization - Secure a 12% premium through add-
on and upgrade CONS - Additional hold over area - Increase manufacturing cost by 5%
( based on Dell’s account)
RECOMMENDED SOLUTION, IMPLEMENTATION & JUSTIFICATION
Problem 1
- “Employ Six-Sigma Approach” Ultimate solution to address backlog as it is a customer
focus Manpower are trained and open-minded Originated from American culture First pilot project will then form another sets of group Six sigma level means 99.99966 or 3.4 dpmo
Problem 2
“Conceptualize Reebok’s Idea or Diversification” Enter into other segment of the market “Jack of All Trades”-defending “your cream of the crop” and
increasing the share on lightweight category Reebok was able to defend its 45 years and above category and
getting a lion’s share of 12-35 years category because of its buying power
Problem 3 Strategize Dell Computer Corp. “Customer Focused Products” Idea of Dell’s offering a customer a means of choice and then
assemble the individual computer to the precise specification is applicable to motorcycle industry
Market demand is inevitable and needs a customization to have control of the process
Customer’s feeling of satisfaction as they were highly regarded Provides a specific products both quickly and cost-efficiently
SUMMARY
In summary, Harley-Davidson has to consider the following
1. Increase the market share by including lightweight category to their stronghold base
2. Employ the Six-Sigma concept to make sure that production backlog and quality problems will be addressed.
3. Customize to precise customer specification thus reducing the fear of big inventory
Gantt Chart
Qtr 1 Qtr 2 Qtr 3 Qtr 4
1. Identifying and selecting GM Black Belt seminar, project the project
2. Forming the team Sponsor seminar, manpowerImplementation
3. Developing the charter Leader
4. Training the team HR seminar
5. Doing DMAIC and Team access to operation implementing solution
6. Handing of the solution Six Sigma Team
RemarksActivities Responsible Resources Target Date
Thank you !!!