Policies, Processes, and Methods of Operations Management at Harley-Davidson Motor Company

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Policies, Processes, and Methods of Operations Management at Harley-Davidson Motor Company
September, 2012

Introduction The role of operations management (OM) requires a great deal of responsibility. No matter the size or type of business, the technique and knowledge applied by an operations manager when planning, organizing, staffing, leading and controlling, can make or break a company (Heizer & Render, 2011). Harley-Davidson Motor Company is a prime example of a goods producing organization with a history of unstable performance and successful achievements all affected by OM role. The following paper is an overview pertaining to policies, processes, and methods of OM at Harley-Davidson and acknowledgment of how todays’ OM
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Performance Improvement of the Supply Chain
Not long ago HD’s supply-chain was an imbalance of separate departments not focusing on their core competencies. Engineers were hiring suppliers when they should have been designing and while production was jeopardized by suppliers unable to meet commercial demand. Not only were purchasing and inventory costs increased as result of inadequacies but operations went from 11% of revenue in 1990 to 17.7% in 1993 (Klamath, 2008).
Recognizing the downward spiral, Harley switched to an integrated purchasing program complete with knowledgeable buyers, e-procurement, and strengthened supplier relationships. As of 1990, HD reduced an excessive 3,000 MRO suppliers to a concentrated group of 3 and hired a critical group of OEM suppliers for 80% of its purchases (Kamath, 2008). Consciously eliminating suppliers has significantly improved cost, quality and timing.
Maintaining Competitive Advantage Harley-Davidson does not compete on cost because a Harley almost always costs more than a competitors model. Instead, HD’s competitive advantage based on value and differentiation. Described by Heizer and Render (2011), differentiation is a product or services’ ability to achieve above expected characteristics and elevate overall consumer value be it through convenience, features and / or

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