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°°
þ History
þ The problems of plenty
þ A Bike, A Culture, A Legend
þ Restructuring The Operations
þ Suppliers Relationship
Management
þ Use of IT in Supply
Management
þ MRO Management
þ Logistics Management
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þ To meet the expansion cost, the company increased the
price of its vehicles which made many customers unhappy.
þ Quality of H.D. motorcycle began declining as American
Machine And Foundry Company(AMF) kept pressing the
company to increase sales volume. As AMF wanted to
make the most of the booming demand for motorcycles in
the market.
þ Thus against 14,000 units in 1969 they had to produce
75,403 vehicles in 1975.
þ Quality scarified for the quantity.

Problem intensified when Japanese companies entered in to


the market with high quality and low price.

By 1980 H.D. was on the brink of bankruptcy.


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In the mid 1990 H-D restructured its operation related


to the supply chain to focus on three elements

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complete one cycle of an operation.
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þ 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.
þ Engineers themselves dealt with suppliers, handled
logistical needs and managed routine personnel functions.
þ Since the engineers were not experienced often they used
to select wrong suppliers.
þ H-D decided to integrate purchasing with design.
þ H-D felt that it was important for the purchasing
executives to be involved in the product development
process.
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þ Purchasing executives were more capable to meeting
the design according to requirement.
þ H.D. purchasing division performed two different
function-
è Operation and
è Development
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þ H.D. establish product development center to foster closer
interaction between the purchasing people and suppliers from very
beginning of product development process.
þ Reducing cost and improve quality.
þ Set up SAC(supplier advisory committee).
þ Created master suppliers agreement.
þ Built relationship strategy, helped it procure better technology,
innovation of product and achieve the objective.
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è Reduce transportation ° %  
costs è Capacity balancing issues.
è Improve supply chain è Potentially higher costs
coordination. due to low efficiencies
è Did not promot resulting from lack of
competition among supplier competition.
suppliers by reverse è Decreased ability to
auction. increase product variety.
è Flexibility as suppliers
suggested the designs to
reduce cost
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þManugistics¶ supply chain software.
þPro-E computer aided design and
manufacturing software.
þProduct data management software from
metaphase.
þ These solutions enhanced the supply chain by
helping in product design, data transfer and data
management at both H-D¶s and supplier¶s levels.
þEnabled H-D supplier to access new product
designs and drawings.
þ As a result manufacturing costa were reduced since
any defects or changes in the product were
identified at design stage itself.
þHarley-Davidson supplier network ("
 $), provided electronic data interchange
services such as planning schedules, shipment
status, etc to suppliers
þ H-D saw a decline of 90% in supplier phone calls to
the company after the launch of H-sn.com .
þ Used Data mirror transformation server to transfer
data such as information on inventory levels .
þ H-D deployed £ $ #(  
!+  to
increase efficiency in managing inventory and MRO
purchasing which reduced cost from $1 billion to $70
million annually.
þ
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0#3provided suppliers
access to critical business transaction information at
H-D such as supply delivery performance, financial
transactions and quality performance.
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H-D restructuring operation are


1.)Involvement of purchasing in design
Performed two different function-
þ Operational purchasing
þ Development purchasing
BENEFITS*-
-Cost reduce
-Reduced suppliers
ü   
£ 

þ / $(   to foster closer


interaction between the purchasing people and
supplier.
þ   ° (  conducted
three month training program for suppliers

BENEFITS*-
-Improvement in manufacturing skills.
-Maintaining relationships with suppliers.
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