Leadership Styles Of Harley Davidson Management Essay

Leadership Styles Of Harley Davidson counsel EssayIntroductionThis bailiwick study is approximately Harley-Davidson a prestigious American Motorcycle manufacturer situated at Milwaukee U.S.A, with a full year 2009 revenue of $4.29 billion and income of $70.6 million from continuing operations. (Press sprain www.harley-davidson.com)This analysis has its focus on a brief history of H-D, which includes the manufacturing issues and the problems it had, the various strategic changes made by H-D in the manufacturing process to achieve its goals. The implementation of JIT and its notion on the kit and caboodle and the product, the provider development, Supplier relationship and the efforts towards Supply Chain Management.It also includes the Risks, costs and benefits of Supplier development, the Key learning which we take away from the encase study and lastly it concludes with the future trends in SCM.A brief HistoryIn 1970s heavy weight motorcycle market was in the pass of H-D. The Corporate parent AMF wanted to take advantage of this market dominance by production of more bikes at a faster rate.In the process they helpless the focus on Quality and Supply Chain Management. In 1974 the quality of the product was at its bottom. Harley-Davidson holded a desperate change to overcome these issues, in 1981, a group of local management was put together to rebuilt the order.Key theories, Strategic changes and Implementation at H-D1. Inventory, Inventory Turns and Cash Flow A downslope in sales due to the quality problems increased their inventory level to $24 million. H-D worked on Inventory Management.Inventory TurnsThe number of times a social club rolls over its inventory per year is defined as its Inventory Turns.Calculation Most commonly used method is to divide the annual sales of the companion per year by the average inventory level maintained per year. For example, if the average sales of a company is $2,000,000 per year and the average inventory mainta ined for a year is say $50,000 than the inventory turns for that particular company is 8 ( ref. Supply twine metrics.com)The increase in the Inventory Turns of a company, generates more free funds flow. Free cash flow is an asset, as it can be used for other advantages rather than blocking the money in Inventory Stock. (Ref.Marie Leone CFO.com, Supply chain metrics.com)At H-D an inventory turns of 4.5/year was increased up to a level of 28.Consequently the inventory came down to $4 million.2. Shift of manufacturing strategy from Push to Pull and JIT pressure and expressPUSH is the traditional style of manufacturing in which a product is manufactured irrespective of its demand. The process then Pushs to the next step. It may be the sell of the product. This leads to unnecessary inventory, over stock because the production goes on without the actual demand of the product.PULL is the lean style of manufacturing in which a product is manufactured on demand. If there is no demand, th ere would be no production. This saves money as unnecessary production is avoided. Lesser inventory is maintained because what is produced is consumed. The customer will PULL the product from the manufacturing facility.Manufacturing facility is in tune with the market dynamics. (Ref.leanmanufacturingconcepts.com)Lean Thinking is an articulation of the core principles behind the Toyota Production System (TPS), acknowledged to be the close efficient in the world today. (Manufacturing Operations and Supply Chain Management the LEAN approach David Taylor and David Brunt)Just in meter Manufacturing (JIT)Just in Time ManufacturingJust in Time (JIT) manufacturing is a Japanese management philosophy applied in manufacturing which involves having the even off items of the right quality and quantity in the right place and at the right time.The priggish use of JIT manufacturing has resulted in increases in quality, productivity and efficiency, remediated communication and decreases in cos ts and wastes.Goals of JITFinding customer require and responding to it Production is tuned according to the customer demands.Cost effective quality standards quality should and must be the topmost priority, but it should be cost effective.Work for a minimum wastes Elimination of wastes which are of no use for the production.Trust development in relationships with the suppliersSupplier relationship is of last-place importance specially in the case of single sourcing, it is a strength of company to have strong supplier relations, both in terms of materials, inventory and deliveries on time.Plant designing for utmost efficiency and easy manufacturing Plant design must ease the production process with least labour involvement. It must ensure to use the full plant potential.Striving hard for improvements on a continual basisThis makes organization competitive and committed to the needs of the costumers, as customer demands are always volatile.(Ref.Just in Time Manufacturing, T.C.E C heng and S Podolsky Curtin University of Technology, Australia Institute for Manufacturing University of Cambridge)Changes and Quality development at H-DH-D shifted from PUSH (anticipating demand) to PULL (responding to orders).Set up times were reduced drastically, it made smaller full-size feasible.H-D moved towards Just in Time manufacturing and Supply Chain Management.It invested in group problem solving program, like Quality Circle and made a policy to respond to any of the problem issues within two weeks.Employee involvement at H-D made them even more commited.An Example To me every transmission and engine bolted is going to my motorcycle, Doug Tearney, Final Inspector Harley-Davidson.Supplier Selection and DevelopmentSupplier SelectionJIT emphasis on single sourcing.Single Sourcing is a sourcing strategy in which the company buying is dependant on a single company for almost all of the particular item or service.Suggestive qualitative aspects used for supplier evaluationDes ign, development and process capacity.How capable the management is?Financial know-hows and structure of cost.Environmental Regulation Compliance.Longer-Term Relationship Potential.(Ref. Introduction to Operations and Supply Chain Management, Cecil C. Bozarth and Robert B. Handfield)Supplier developmentSupplier development can be defined as any activity that a buyer undertakes to improve suppliers performance and/or capabilities to visualise the buyers short-term, long-term supply needs.Or in other words, Supplier development can be loosely defined as the process of working collaboratively with suppliers to improve or expand their capabilities.(Ref. http//www.nist.gov/mep/manufacturers/supplier-development.cfm)A supplier development program must aim for improving the performance of a supplier and helping them to get what they need to be successful in supply chain.Important functions of supplier development programsProviding information about products, expected sales growth, etc. Su ppliers need to run short extensions of their customers. provision in the application of lean and quality tools.If suppliers had more information about the entire supply chain and had a true lean transformation underway, they would become more profitable and provide a better quality and lower-cost product, on-time.(Ref. http//lean-supply-chain.blogspot.com/2006/10/what-is-supplier-development.html)(Ref.Avoid the Pitfalls in Supplier Development Robert B. Handfield, Daniel R Krause, Thomas V .Scannell and Robert M. Monczka)Supplier Management at H-DSupplier OptimizationH-D cuts its supplier base from 320 to 120 and established performance requirements. Suppliers must have MAN, JIT, Statistical Operator Control and Employee Involvement.Supplier problems and SolutionsH-D need JIT at Supplier end, but suppliers had problems with it as they deal with different types of customers. They ended up with Just in Time warehouses, which leads to quality problems.For JIT at supplier end, proper advance scheduling was given by H-D.Piston supplier KSG adapted to H-D requirements. It changed from producing to two months inventory, to producing as per the requirement.KSG did the entire process from bowing to packaging in just a space of 35ft with two-three operators, with unbelievable throughput time. Previously the same work was done with fifteen operators scattered all over the plant.Ultra Tool the metal stamping company, a supplier of H-D, had great success with MAN program. At Ultra tool for a number of operations on a part it required part movement. A cell was designed at Ultra Tool that reduces the part movement to just 10 feets.The parts were taken to a particular area in this cell and it included tooling as well. It made the process fairly quick.Commonality of purposeHarley improved the processes at Ultra Tool in return it had no price rise from this supplier for 3-4 years.(an example of mutual benefit to customer and Supplier).Risks, cost and benefits of Supplier De velopmentSupplier development involves the cost which is incurred by the Customer company and no immideate returns are visible for it.This depend upon the need and the value of the product that the funds are allocated for the trainings and development of suppliers