Table of Contents
Harley-Davidson, Inc is an American motorcycle manufacturer company which was founded in 1903 at a place called Milwaukee (Hill & Hill, 2012. P. 727). The founder members of the company were Arthur Davidson and William Harley and they were the first people to build the first three motorcycles at Milwaukee. During the First World War, the demand for the company’s products grew overseas this made the company to be the biggest manufacturer of motorcycles in the world by 1920s. However, after the Second World War the company faced a strive competition from Japan which almost lead to downsizing of the company. But later on, a group of Harley-Davidson came up with strategies which helped the company to rise again economically. This paper will discuss the role of HD’s operations team in ensuring HD’s turnaround as well as discuss about if HD’ operations are customers centric by providing critical justification. The paper will also discuss the importance of continues improvement for HD’s business success.
Role of HD’s Operations Team
Harley-Davidson’s operations team played a significant role in turning around the business of the company. Firstly, HD’s operations team brought a strategic plan which could be used to revive the business operations of the company. The operations team decided that it could be good for the company to turn left when competition was turning right. This was to be achieved by applying the strategy to the company’s basic product of marketing which included price, company product, promotion, place, and the people (Fessler, 2017). Also, the operations team’s decision that the company should offer products and service as well as a culture which their competitors were not offering helped the company to turn around. By doing this, the company could be viewed as an alternative by customers hence its success in business.
Additionally, HD’s operations team focused on product quality improvement thus the team suggested that the company’s manufacturing and engineering personnel should travel to Japan to study how the Japanese were making motorcycles (Fessler, 2017). This helped the Harley-Davidson to turnaround since the knowledge which the personnel came with helped the company to introduce employee involvement in production process as well as the formulation of statistical operators’ control. By doing so the company was able to cut high production costs and reduce its high inventories which tied up cash. Moreover, the company’s act of turning left from completion helped the company to implement evolutionary designs for its motorcycles than producing new models every year like their competitors.
The issue of price was part of the turnaround strategy of Harley-Davidson Company. In order to counter their competitors, Harley made a decision to retain their motorcycle’s residue value though in some areas there was an increase of the value over years while their competitor’s motorcycle depreciated for the first two years. This helped the HD Company to increase its value for two year hence its turnaround in business. Moreover, by using the strategy of place HD’s operations team suggested that the company should redesign its store with its dealer network in order to create a business environment where customers could come to Harley’s store and use it as a business convergence centre. Later on, the dealership program emerged as an award winning due to its ability to generate in store revenues for many dealers. Additionally, the issue of promotion which was suggested by HD’s operations team helped the company to come with the Harley Owners Group where its members have raised $70 million as a support to Muscular Dystrophy (Fessler, 2017). Promotion did not only help Harley to get closer to its customers by riding alongside them but is also helped the company to come up with events which could allow the customers to show off their motorcycles thus the gaining of customer’s trust. The company used people through anniversary celebrations to advertise its products across the globe. This was the best avenue to market the company to advertise the products since the celebration events were attended by many people who could help to spread the message about the products which the company offers to the market.
Moreover, in 1984 HD’s operation team convinced President Reagan’s Administration to impose five year tariffs on Japanese manufactured motorcycles which were flooding American market (Bieber, 1988, Hill & Hill, 2012). The Japanese motorcycle were easily affordable to customers hence threatening the prices of America motorcycles therefore the imposing of tariffs helped Harley-Davidson Company to regain its value in the market since the tariffs monopolized the company. Moreover, the act of the operations team whereby they convinced investors to fund the restructuring of the company’s new plan which was based on management principle, manufacturing techniques and market strategy helped the company to make a great turn in business. The money which donated from investor helped the company to reorganize itself in terms of manufacturing techniques by acquiring new production techniques from Japan. Moreover, the operation team made a decision to cut off the number of the workforce so as to reduce the company expense. This helped the company to minimize the little revenue it had thus directing it into production process. The company’s act of involving its employees in production played a significant role in its turnaround. This made the company to come up with a job training program whereby works were trained about new methods of production hence workers were able to gain new skills of production which helped the company beat their competitor. Generally, the strategy which the HD’s operations team comes up with helped the company to rise again in its production process.
HD’s Operations’ Customer Centric
Harley-Davidson’s operations are customer centric. Customer-centric means that a company or an organization is able to deliver products and services which meet the consumer experience. During the turnover of HD, the company took a new direction in its operations when it decided to offer unique products and experience which were not offered by their Japanese competitors (Hill & Hill, 2012, p.726). The company took a new direction in production in order to satisfy their customers. By doing this, HD was able to gain the trust of their customers thus the essence of being customer-centric. For example, HD came up with Harley Owners Group (H.O.G) as a way of gaining more customers for their products. The main aim of H.O.G was to enable customers “get the most out of their ownership experience” in terms of membership benefits and company events (Clark, 2011). Additionally, Harley used programs like Jumpstart to convey bikes to social occasions like the music celebration in order to permit individuals to ride completely working motorcycles (Beulah, 2015).
Additionally, after HD improving its production process, the company realized that it had customized its motorcycle models which were grey in color. In order to operate on a customer centric circle, the company decided to produce motorcycles which made the life of customers easier. The company then increased the number of product options to over seven thousand accessories which had more than four hundred combinations of bars, pegs, and controls (Hill & Hill, 2012, p.729). Keeping in mind the end goal to engage a more youthful and more various group of onlookers, Harley presented a totally new line of cruisers without precedent for a long time. The cruisers were sleeker, more fuel productive and lighter (Beulah, 2015). Also, Harley offers financial services in form of loans and credit cards which help customers to buy the company products.
In terms of information technology, HD has launched projects in marketing, sales and production lines which have assisted the company to gain access to customer contact information and product line performance. This information has helped the company to increase the supply of products to areas with high demand. Moreover, HD’s use of SAP Community Network has helped the company to gain information about the market trends and the capabilities of its products (Clark, 2011). Also, the company developed online trading tools such as ‘chrome consulting’ which customers could use to order for the company products. This has made trading between the Harley and customers easier since customers do not have to go to the dealers in order to purchase the motorcycles. In addition, Harley-Davidson is keen on clients’ conclusions and it regularly solicits its online group’s sentiment from bikes being produced. This is done keeping in mind the end goal is to have a superior feeling of what individuals fancy in its products.
Harley-Davidson embraces the use of sales and operations planning in order to determine the current and future market demands as well as remain focused on future plans of the company. The essence of planning enabled the company to make a monthly review of product demand in the market thus this helped the company to determine the appropriate supply plans which can be employed to deliver more products to the market. Sales and operations planning helped the company’s departments to effectively coordinate its activities in order to achieve a customer satisfactory thus the essence of customer-centric. For instance, planning helped the company to come with new motorcycle models which had different colors thus meeting the customer’s desire. In addition, operations planning helped the company to offer high customer services which entail offering the right product at the right time and at the right place (Backer, n.d).
Harley-Davidson also has two models which have assisted the company in moving its products closer to the customers. The first model which the company uses in its operations is known as allocation model (Backer, n.d). Under this model, sales stock made available to a dealer network where customers go to purchase their motorcycles. This model does not offer sales stock to the distribution warehouse thus the model ensures that bikes are delivered to customers faster. However, the disadvantageous aspect of this model is that it provides products to customers which are not of their choice. The second model which is used by HD is known as pipeline model whereby a large stock is put under distribution warehouse while the dealer network acts as a showroom of stock to customers. The advantageous aspect of this model is that it gives customers a hundred percent choice of bike models and colors. The model also ensures that the company has a better point of view of customer’s demand thus this helps the HD to work towards the direction of attaining customer satisfactory. Therefore, this model ensures that the HD’s operations are customer-centric since it gives consumers what they desire to have or experience.
According to the demographics, Harley-Davidson increased motorcycle sales to customers who originally owned no bike by 33 percent. Moreover, in 2015 HD Company emerged number one seller of motorcycles to women, African Americans and Hispanics. This shows that was producing products which were satisfying customers. Usually, if a product or service is below the required standards nobody will have an interest in it. The fact the company increased its sales in 2015 shows that its products were admirable to customers. From the table of motorcycle product performance, it is clear that the Harley-Davidson had an increase in sales revenue from the year 1985 to 2006 (Hill & Hill, 2012, p.728). The same trend also is experienced by gross profit and cash. The company was able to make these increases of profit and cash after formulating new strategies of operation which entailed production of a new product which can improve the performance of customers. Also, the company’s decision of coming up with an operating vision which included everybody in production shows that the company was more concerned with customers than anything else. By doing so, HD Company was able to regain its earlier status of dominating in the market.
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Importance of Continuous Improvement for HD’s Operations
Continuous improvement can be defined as a process of coming up with a strategic plan which will identify and eliminate the root causes of problems in a business (Tuner, 2017). Usually, continuous improvement involves making small improvement steps in business rather than huge innovations. Many businesses like Harley-Davidson embrace the use of continuous improvement in order for their products to remain effective in the market trends. During the turnaround of HD Company, the operations teams figured out a supply chain strategy which could help the company to remain competitive in the market (Ben, 2017). The supply chain strategy entailed restructuring of the company’s manufacturing operations in order to produce products which could meet the demand of customers. Therefore, restructuring of manufacturing strategy enabled the company to focus on continuous improvement process which could help the company to save costs as well as respond to the market demands.
Another importance of continuous improvement for HD’s operations is that the process enabled the company to focus on the quality of products and services. The aim of Harley Davidson was to offer life styling products and not transportation products thus the company had to develop products which satisfy the needs of customers. Usually, the products and customers are the primary major focus of any business organization which is under production. Therefore, perfecting the quality of products will increase the market demand of such an organization and this is what Harley-Davidson did. In order to achieve product quality, the company had to look at the age bracket of the customers as well as their gender. This enabled the company to manufacture bikes for older and younger people thus the booming of its business.
The company’s effort in providing training courses and trip planning to its workers was also one of the continuous improvement strategies. Training courses helped to reduce the level of intimidation that HD culture had in its workforce thus permitting newcomers to get comfortable with the new smooth riding of riding bicycles (Ben, 2017). Harley Davidson had to determine how their competitive manufacturers were making their products thus the company decided to send some of its manufacturing and engineering personnel to Japan to learn more about production tactics. Later on, the group came with the knowledge which helped the company to manufacture high-quality products thus attaining a competitive market in America. This made the company to gain a good reputation due to its product brands that were satisfactory to the consumers.
Additionally, the company’s use of Just in Time inventory (JIT) and employee involvement in manufacturing operations contributed to its continuous improvement (Gross, n.d, p.4). JIT helped the company to reduce wastes by making use of quality raw materials to produce high-quality products which were needed by customers for immediate use. With JIT, the company could increase inventories from twenty to thirty times in one year but Harley-Davidson was able to do so four times in a year. Also, the JIT program helped the company to embark on savings on storage which in turn reduced inventory costs thus leaving HD with more money accessible to meet debt payments. Later on, the company was able to come with a brand of JIT known Materials as Needed (MAN) which did not only help Harley to cut its stock by 75 percent but it also allowed two assembling plants to work without stockrooms (Gross, n.d, p.4). Moreover, the idea of involving employees in the production process helped the company to manufacture a variety of motorcycle models which could meet the market demand since each employee was given chance to propose a model which could be welcomed warmly by customers.
Continuous improvement process also helped the Harley Davidson to achieve a high level of self-confidence in their products (Fishman, 2017). The production of bikes which were of high quality enabled the company to gain customers in the market share. This, in turn, increased the company’s confidence in what they were offering since when a company offers a product which satisfies the customer, the company becomes even more confident with the brands it is offering thus this increases production process of that particular company. The company’s self-confidence in its products helped the Harley to gain good reputation thus more customers were willing to purchase the motorcycles from the company. Therefore, the company was able to make more profits and this indicated its progress. For instance, HD closed the year 1987 with sales worth $295 million which made a profit margin of $4.3 million (Gross, n.d. p.6). This profit was a double increment as compared to the year before.
In addition, continuous improvement process is cyclical thus the process never ends. This implies that the process does not operate on a single goal. Continuous improvement does not only require goals to be set but the process also requires the formulation of the step which should be taken to achieve the goals set (Chapter 7.1: The importance of continuous improvement, n.d). This process helped Harley-Davidson to set new goals which the company needed to achieve during its turnaround. Also, the process contributed to the formulation of operational strategies which helped the company to improve on quality products as well as make profits. Usually, the main aim any business organization is the issue of profits other than customer satisfaction. Therefore, Harley’s strategies like chain supply management, just in time program and employee involvement were all practiced by the company in order to improve quality production of bikes thus make profits in return. Moreover, the continuous improvement process helped Harley to emerge as a company which is driven by performance rather than the essence of making a lot of sales. Faced with competitive motorcycles manufacturers from Japan, Harley had to improve its performance in order to enjoy the market monopoly of America. This forced the company to understand the desire of their customers concerning the type of bikes they were willing to ride. Therefore, continuous improvement process contributed to the company’s improved performance through the production of high products.
Reflective Piece
I failed the original assignment because of I did not get right the topic of the assignment. This contributed to the submission of a research paper which was somehow out of topic. Moreover, the failure to follow the instructions of the assignment on how the assignment was to be done also contributed to my failure. The issue of time management as well contributed to my failure since I did the assignment at the last minute thus there was a possibility of omitting key ideas which could have given me more marks. I have learned some important lesson from the experience of failing in assignment. Firstly, it is of great importance to do the assignment early before the dateline since this allows more time for research hence writing an assignment which addresses the key areas of the topic. Secondly, before embarking on writing I will always make sure that I have an understanding of the topic in order to avoid writing an essay which is out of the topic. In the future, I will make an effort to go through the instructions before writing answers to the assignment as well as adhere to time.
Conclusion
In conclusion, Harley Davidson’s operations team played an important role in the turnaround of the company. It was the decision of the operations team that led to the formulations of operation strategies which helped the company to regain its reputation in the market after its downsizing. Some of the strategic plans of the company entailed making use of supply chain management, Just in Time program and employee involvement. These strategies helped the HD Company to improve in performance due to the production of high-quality products. Also, the operations team made an effort to convince President Reagan to raise tax for Japanese motorcycles which were flooding the American market in order for HD to get a market share for its products. Moreover, Harley Davidson was customer centric since during the turnaround the company decided to give customers products which were not offered by their competitors. Therefore, the company had to develop new bike models which were easier to use by both the young and older people. Also, the company’s launching of the online trading tools made it easier to access information about customer’s priorities thus this increased the production of bikes which were satisfying fully. Furthermore, continuous improvement process has helped Harley-Davidson company to focus on the production of quality products which meet customer’s demand. Also, continuous improvement helped Harley to embrace the use of supply chain management as a way of delivering desirable products to customers. Continuous improvement process has also helped the company to gain confidence in its products as well as to gain the trust of their customers. Generally, the strategies which the company employed during the turnaround contributed to its continuous improvement in terms of production, marketing, and profit making.
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