KIT709: Analysis of Harley-Davidson's SCM and ERP Implementation

This report provides a comprehensive analysis of Harley-Davidson's Supply Chain Management (SCM) and Enterprise Resource Planning (ERP) implementations. It begins with an examination of the company's business and technical environments, including competitor analysis, customer base, financial condition, IT infrastructure, and internal IT skills. The report then delves into the drivers and challenges that influenced the formulation of Harley-Davidson's Supply Management Strategy in the late 1990s, highlighting factors such as customer service, competitiveness, and financial issues. Furthermore, the study details the strategic approaches the company took towards implementing the ERP system, including business process mapping, project team composition, and technology rationalization. Finally, the report discusses the critical success factors for ERP implementation, categorized into strategic, tactical, and cultural elements, providing a well-rounded understanding of Harley-Davidson's journey in enhancing its supply chain and enterprise resource planning capabilities.

A Case Study of Harley-Davidson

Executive summary
This report includes a critical analysis of the supply chain management though considering the
technical and environmental business aspects of Harley-Davidson. Moreover, the internal skills
of a business regarding skills of Harley-Davidson included in this report, that will elaborate the
IT infrastructure of the organization. In addition to that, a discussion of the strategic
accomplishment of Enterprise Resource Planning or ERP system of the company is also covered
with proper justification. The strategic implementation of ERP will elaborate the organizational
structure of Harley-Davidson that critically reflects the successive factors of the organization.
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Table of Contents
1.0 Introduction................................................................................................................................3
2.0Technological and Business environment..................................................................................4
2.1 Environment of business for SMS.........................................................................................4
2.2 Environment of Technology for SMS...................................................................................6
3.0 SMS Drivers and Hindrances....................................................................................................7
3.1 Supply chain strategies..........................................................................................................7
3.2 Challenges of supply chain management..............................................................................8
4.0 Strategic Implementation...........................................................................................................9
4.1 “As Is” Mapping process.......................................................................................................9
4.2 “To Be” Mapping process.....................................................................................................9
4.3 Choice of Suppliers................................................................................................................9
4.4 Technological rationalization..............................................................................................10
4.5 Project Team........................................................................................................................10
5.0Success factors of ERP.............................................................................................................11
5.1 Strategic elements................................................................................................................11
5.2 factors of tackle....................................................................................................................11
5.3 factors of culture..................................................................................................................11
6.0 Conclusion...............................................................................................................................12
References......................................................................................................................................13
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1.0 Introduction
The report is going to discuss the critical investigation of the technical and industry atmosphere
of Harley-Davidson in the event of implementation of Supply Chain Management System
(SMS) project. This report will discuss the industry atmosphere including domestic as well as
international rivals, customer segment, company finance, and the technological atmosphere
include support structure, internal IT skills, and IT infrastructure. The report will also describe
the rationale and confronts intended for the formulation of SMS within Harley-Davidson in the
in 1990s along through the strategic implementation of the Enterprise Resource Planning (ERP)
system. Moreover, the significant victory aspects for the accomplishment of ERP system in
Harley-Davidson is also going to depict with the help of case study about “Harley-Davidson:
Enterprise Software Selection”. The company was founded in 1903 by Arthur Davidson and
William Harley. After its foundation, the organization became the biggest motorcycle
manufacturer throughout the world in the year 1920.
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2.0Technological and Business environment
2.1 Environment of business for SMS
This portion has described the technical and industry atmosphere of Harley-Davidson after
implementation of the system of Supply Chain Management. The industry atmosphere in Harley-
Davidson is related to the mixture of external and internal factors, which influence the operating
solution of the company. The technical environments are related to the external elements in
technology, which impact the overall business operations (Christopher, 2016).
The industry atmosphere of Harley-Davidson includes global and domestic rivals of the
company, client analysis and the financial condition at the time of the implementation of SMS.
Competitor analysis of Harley-Davidson
The major domestic and international rivals of Harley-Davidson are Triumph Motorcycles,
Royal Enfield, Viper Motorcycle Company, Yamaha Motorcycles, Royal Enfield, Kawasaki,
Ducati, Victory Motorcycles, Polaris, BMW motorcycle, Honda, BRP (Bombardier Recreational
Products), Gibson, Suzuki Motor Corporation and Arctic Cat. In order to analyze the rivals of
Harley-Davidson, Porter's five forces can be described, which includes the following five forces:
Competitive Rivalry of Harley-Davidson: The performance of Harley-Davidson is depended
on the competition and this force is considered as the most effective competitive force among
others. The external factors that generate a strong force of competitive rivalry in the motorcycle
industry are high availability of firms, high convenience of surrogate, and enough range of firms
(Hugos, 2018).
 Bargaining Power of Harley-Davidson’s Customers: Customers are also considered as
an important factor in the performance of Harley-Davidson. The external elements that
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subsidize the strong negotiating power of the customers are a high value of information,
huge substitute availability and enough switching costs.
 Negotiating Power of Harley-Davidson’s Suppliers: The aspects that influence the
weak bargaining power of the suppliers are High supply steadiness, adequate size of
suppliers and Low forward integration.
 Threat of Substitutes: The external elements, which lead to a modest threat of
substitution against Harley-Davidson are a moderate variety of substitutes, high
availability of substitutes and restrainedswitching costs.
 New Entry in contrast to Harley-Davidson: The client base of Harley-Davidson can be
reduced by the entry of new entrance. The Threat of new entry is related with factors
such as the higher cost of brand development and adequate economies of scale.
Customer Base
The customer base is strongly related to the industry atmosphere of Harley-Davidson, as it is the
number of selected customers within the organization who buys their products repeatedly.
Moreover, Customers are considered as the major source of the revenue of the organization. In
order to analyze the customer base, the STP (Segmentation, Targeting and Positioning) model
can be described. The organization mainly focuses on psychographic segmentation to understand
varying requirements of the customers especially since the company is a way of life brand.
Moreover, the Differentiated targeting strategy is utilized by the organization. The main targeted
customers of Harley-Davidson are high-income group along with the age group of 25-40 years.
The positioning strategy of this organization is very strong as it manufactured its products with
innovative technology and designs (Costa et al. 2016).
Company Finance
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The company has faced financial problems and quality issues in the mid-1980s before realization
of the Supply Chain Management System project. At the time of implementation of SMS in the
year 1999, the organization earned a gross profit of $835686 and interest of $8014. In the year
1998, the gross profit of Harley-Davidson was $690670 and interest was $3828 and the gross
profit and interest of the organization were $586217 and $7871 respectively in 1997. The gross
profit of the organization was $490094, $411399 and $358339 in the year 1996, 1995 and 1994
respectively. Therefore, it has been noticed that the financial condition of the company was
raised after the implementation of the SMS project (Shen, Chen and Wang, 2016).
2.2 Environment of Technology for SMS
Technologies are an important part of the corporate operations and products of Harley-Davidson.
Furthermore, the technology is measured as the most significant tool in the SMS project. Supply
chain management is driven by approximately 5-10 % by technology. The organization builds its
fuel economy strategy based on the technology exploration roadmap and resulting innovation. In
some cases, the technology is basically not transferable to a motorcycle and in other cases,
creating the technology work would cost expensive. The innovation and technologies that are
explored by the team of Harley-Davidson involve design optimization, flexible valve systems to
lessen friction and weight along with downsized direct boosted and injected engines among
others (Johnsen, Howard and Miemczyk, 2018).
In the event of implementing entire Supply Chain Management system, Harley-Davidson started
to invent new Information technology infrastructure to grab the attention of the customers. The
organization was established a new piston engine technology, weight-saving, innovative engine
technology, and other techniques compared to its rivals. From the early 1990s, Harley-Davidson
has sharpened the desire of eco-minded, technology-loving riders still now by illuminating the
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Livewire model. The model is designed in such a way that it can gain and accelerate speed.
Moreover, internal information technology skills are coding, communication, time management,
project management, and appropriate planning strategy. After the implementation of SMS, the
major technologies that have been used by Harley-Davidson are Anti-lock Braking System
(ABS), Ride-by-Wire, Slipper Clutch, Airbags, and Wheelie Control or traction control. The
organizational structure of Harley-Davidson includes Produce Products Group (PPG), Create
Demand (CDC), Information technology Circle (ITC) and Provider Support (PSC).
3.0 SMS Drivers and Hindrances
3.1 Supply chain strategies
Harley-Davidson started the expansion of a corporate Supply Management Strategy (SMS)
intending for leading the organization as of a transactional, site-detailed attitude towards a long-
standing center on relationships with the suppliers (Jin, Ji and Gu, 2016). In late 1990s, there are
certain reasons for the strategy formulation of Supply management by Harley-Davidson. The
actual causes are to develop customer service and satisfaction, developing competitiveness
compared to other motorcycle organizations. The organization also intended to formulate SMS
as an active supply chain management strategy that offers higher customer service through
responding or answering quickly top flexibility, promptness of response to the needs of the
customers and unstable conditions (Brusov et al. 2015).
The main reason for formulating SMS by Harley-Davidson is that the implementation of SMS
offers better assurance to their consumers. Harley-Davidson implemented a Supply Chain
Management strategy to make its entire manufacturing procedures more responsive and agile to
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their riders. In the mid-1980s, the organization was faced with financial issues as well as quality
problems and that is also an important reason for formulating SMS in the late 1990s. Moreover,
the buy price and account price were expanded rapidly and operating expenses also developed to
17.7 % from 11% in 1990-1993. Due to these all reasons, in the 1990s, the company decided to
invent the Strategy of Supply Chain Management.
3.2 Challenges of supply chain management
The two major challenges that have been faced by the organization after the implementation of
Supply Chain Management Strategy has depicted below:
 The first hurdle was the overriding concern of Harley-Davidson with the unsatisfied order
and a consequential suspicion of any alteration, which could influence the overall
production.
 The second hindrance that is a frequent issue confronted through the venture teams was
the natural tendency to improve the condition of the organization rapidly rather than
transforming business functions.
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4.0 Strategic Implementation
4.1 “As Is” Mapping process
Harley-Davidson has adopted effective strategic approaches for the implementation of Enterprise
Resource Planning (ERP) for example, Mapping “To Be” procedures, Mapping “As Is”
procedures, and supplier selection. ERP is industry practice management software, which
permits the company to utilize a structure of combined submission to control the entire industry
(Giannakis and Papadopoulos, 2016).
For the accomplishment of the ERP structure within the business, Harley-Davidson created
Supplier Information Link (SiL’K) team. At the end of March 1998, the SiL'K team was
developed the enterprise-based procedure map of successively incorporating processes of the
P&A (Parts and Accessories), OE and MRO buying units along with procurement by utilizing
developed maps of the OE (Original Equipment) and MRO (maintenance, repair and operations)
procedures from every site. Despite the variety of their procedures, the SiL’K team was capable
to recognize numerous commonalities across sites by this process.
4.2 “To Be” Mapping process
In the year 1998, the squad started to expand the “To Be” procedure that represented the
potential mission for buying at Harley-Davidson. By the implementation of this process, the
team members solved to request a few full point possessions, which would be certified by the
remaining group members to describe future procedures (Li et al. 2016).
4.3 Choice of Suppliers
Harley-Davidson organized a provider conference for disclosure to the team who would make
the selection decision. The supplier selection process was generated on October 16, 1998
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Request for Quote (RFQ) and sent to probable suppliers of software arrangements. According to
this process, eight suppliers finished the self-evaluation checklist and acquiesced response to
Request for quote. 5 suppliers are eradicated because of small size, architectural incompatibility,
and capability to meet the future requirements along with anyone who self-rated below 90
percent fit.
4.4 Technological rationalization
Technology rationalization is the reduction, review, redistribution or virtualization of software,
infrastructure, and technology to confirm the maximum flexibility and operational capability for
the lower cost.
4.5 Project Team
A project team is a group of members who basically belong to various groups, have various
functions and are allocated by the project managers. The project team holds a significant part
within the implementation of ERP systems within the organization as all group members of
SiL’K contribute to entire project objectives, finish individual deliverables, provide expertise and
work with workers to meet and determine the business needs (Ginther et al. 2017).
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5.0Success factors of ERP
The critical achievement elements which are related to the implementation of Enterprise
Resource Planning (ERP) can be divided into three specific groups such as tactical elements,
cultural elements, and tactical factors. The factors are as follows:
5.1 Strategic elements
 Top executive support by the administration team of Harley-Davidson
 Appropriate ERP strategy
5.2 factors of tackle
 Change management and venture team which is SiL’K team for Harley-Davidson
 Recollect the experienced employee
 Vendor and consultant support
 Evaluation and monitoring of performance
 Business Procedure Reengineering
 Commitment by the top management
 A great execution team
 Data accuracy
 Outstanding project management
5.3 factors of culture Organizational culture Cultural diversity Effective communication
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6.0 Conclusion
Finally, it can be concluded that the report has described the business as well as the technological
atmosphere of Harley-Davidson after and previous to the implementation of the Supply Chain
Management system (SMS). It has also been noticed that the organization has faced many
financial and quality issues before the implementation of SMS and for this, the company decided
to implement SMS. Moreover, the report has depicted that, in the late 1990s, management faced
difficulties to formulate effective Supply Chain Management Strategy. Furthermore, the
organization implemented Mapping "To be", Mapping “As Is", and the selection procedure as
the strategic execution of entire ERP system at the workplace. All significant success elements
intended for successful execution of the ERP system are also very crucial parts of this report
along with proper argument and justification.
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References
Brusov, P., Filatova, T., Orekhova, N. and Eskindarov, M., 2015. Modern corporate finance,
investments and taxation (pp. 1-368). Berlin: Springer.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Costa, C.J., Ferreira, E., Bento, F. and Aparicio, M., 2016. Enterprise resource planning adoption
and satisfaction determinants. Computers in Human Behavior, 63, pp.659-671.
Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management
approach. International Journal of Production Economics, 171, pp.455-470.
Ginther, B., Lomonaco, J.P., Kolesnikov, M. and Fulmer, B., Harley-Davidson Motor Co Group
LLC, 2017. Variable ride height systems and methods. U.S. Patent Application 15/248,901.
Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.
Jin, J., Ji, P. and Gu, R., 2016. Identifying comparative customer requirements from product
online reviews for competitor analysis. Engineering Applications of Artificial Intelligence, 49,
pp.61-73.
Johnsen, T.E., Howard, M. and Miemczyk, J., 2018. Purchasing and supply chain management:
A sustainability perspective. Routledge.
Li, L., Li, X., Wang, X., Liu, Y., Song, J. and Ran, X., 2016. Transient switching control strategy
from regenerative braking to anti-lock braking with a semi-brake-by-wire system. Vehicle System
Dynamics, 54(2), pp.231-257.
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Shen, Y.C., Chen, P.S. and Wang, C.H., 2016. A study of enterprise resource planning (ERP)
system performance measurement using the quantitative balanced scorecard
approach. Computers in Industry, 75, pp.127-139.
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