Harley-Davidsonmanufactures high-end motorcycles and sells them worldwide. The company sells more than $4 billion in motorcycles and related products each year, and has one of the most recognized brands in the world. However, business was not always so good for the company. In the 1980s, the company was on the brink of bankruptcy. Facing increasing competition from Japanese and German manufacturers, Harley-Davidson had allowed its quality standards and cost controls to slip. In a legendary business turnaround, the company rebuilt itself. Harley-Davidson completely changed its supply chain to fulfill the expectations of its brand-aware customers.
Over a period of several years, Harley-Davidson reduced its number of suppliers from 4000 to fewer than 350. More important, it began to work with those suppliers to reduce costs throughout the supply chain. Each supplier is expected to find ways (with the help and cooperation of Harley-Davidson) to reduce manufacturing costs and improve quality every year. This was the only way Harley-Davidson believed it could avoid moving its factories to lower-cost locations in other countries. The efforts paid off and the company still manufactures its motorcycles only in theUnited States.
In 2000, the company decided to focus its cost reduction and quality improvement efforts on its information technology infrastructure. Because it had been so successful in working with its suppliers to reduce manufacturing costs and improve quality, Harley-Davidson wanted to do the same thing with information technology. By using Internet technologies to share information throughout the supply chain, the company hoped to find opportunities for efficiencies and cost reductions at all stages of the process of creating motorcycles.
When the company first talked with its suppliers about its information technology initiative, those suppliers noted that each of Harley-Davidson's main factories used different invoices, production schedules, and purchasing procedures. The suppliers explained that this created difficulties for them when they dealt with more than one factory and increased their cost of doing business with Harley-Davidson. Thus, one of the first things the company did was to standardize forms and procedures. Then it moved to require all suppliers to use EDI. For smaller suppliers, the company set up a Web site that had Internet EDI capabilities. The smaller suppliers could simply log in to the Web site and conduct EDI transactions through their Web browsers.
This Web browser interface grew to become a complete extranet portal called Harley-Davidson Supply Net. All suppliers now use the portal to consolidate orders, track production schedule changes, obtain inventory forecasts in real time, and obtain payments for materials shipped. The portal also allows suppliers to obtain product testing information, part specifications, and product design drawings.
Key elements in both EDI and the Web portal systems have been bar codes and scanners. Most individual parts and all shipments are bar coded. The bar-code information is integrated with the materials tracking, invoicing, and payment information in the systems and is made available, as appropriate, to suppliers. Harley-Davidson uses bar-code standards developed by the Automotive Industry Action Group.
Required:
1.When Harley-Davidson implements RFID, it will likely use the technology to help manage its relationships with its main customers, which are the local dealerships that sell motorcycles and use replacement parts in their shops. Outline the issues that will likely arise when Harley-Davidson begins requiring RFID tracking of spare pears inventories at is dealers.
2. In a report of about 250 words Develop and present an approximate timetable for the adoption of RFID technology with specific recommendations about where Harley-Davidson should first implement it. RFID tags could be installed in motorcycles as they leave final assembly, in various parts before they are shipped from suppliers, or in subassemblies as they are created at various Harley Davidson manufacturing operations. Justify the time delays you propose in the adoption of RFID at each stage of the supply chain.