TRANSFORMATION OF

HARLEY-DAVIDSON
- A CASE ANALYSIS

REYNALDO ROBLES
PROJECT MANAGEMENT, MAINTENANCE &
QUALITY
 STATEMENT OF THE
PROBLEM
Short- Term
1. A. Growing Production Backlog of almost a
year
B. If need to Export Production Abroad
Long-Term
1. Renewed efforts by Japanese firm (Kawasaki )
2. Europe as the new battleground for
heavyweight motorcycle segment.
CAUSES OF THE PROBLEM
 STRENGHTS
Major US motorcycle maker
Nation’s number one seller of
motorcycles (heavyweight)
Has greatest market share(49%) of
heavyweight segment
Excellent brand recognition
Superior customer loyalty. High
repurchase intent
Quality engineering of
motorcycles unit
Low turnover rates
 STRENGHTS
Sold through a strong dealer network,
which also provides service and sales
of parts and accessories
Excellent and long lasting relationship
with its dealer, suppliers and
employees
Promoting motorcycle club
With licensing activities which is a
great source of advertising
Large quantity of patents and
trademarks deposited
 WEAKNESSES
Has not been able to fully meet the
demand allowing other entrants to
penetrate the market
Foreign competitors have lower
manufacturing cost
Products not desired by younger
motorcyclist
 OPPORTUNITIES
Industry Expansion
International demand expansion
THREATS
Renewed attempts by leading Japanese
firm to gain share of heavyweight
segment
Possible emergence of Europe as the
new battleground for heavyweight
motorcycles
Foreign motorcycles companies
focusing their sales on younger riders
 DETAILED ANALYSIS

 Increase in production  Exporting Production

capacity = quality International Sales
problem 1992..$263 million..28%
Big demand=backlog of of net income
nearly one year or 1993..$240 million..29%
81,000 units of net income
 Problem 2 & 3
Threat-Kawasaki entering in
heavyweight segment
Threat-new battleground for
heavyweight motorcycles
REEBOK ( shoe industry )
45 & above…..strong market
strategy….enter in 12-35
segment to compete with Nike
- Almost closed down when
Honda enter in their strongbase
Need to improve quality of the
firm’s distribution system,
dealer network and customer
support activities
DELL COMPUTER CORP.
Strategy…adopt “Build-to –Order
Manufacturing model
( product-focused to increase
market share)
 DECISION CRITERIA AND
ALTERNATIVE SOLUTION
Problem 1  2. Transform from a Job Shop
 1. Adopt a Six Sigma Approach Approach to a Cellular Process
 Rationale : In an attempt to address the
backlog orders, a total package of statistical Development
measure, a goal and system of management
PROS
 PROS
- Genuine focus on the customer - Rework will be lessened
- Data and Fact Driven Management
- Processes are where the action is
- Proactive management
CONS
- System of management - New sets of training
- Applicability as it originated from US firm - Additional sets of control and
- Reduces cycle time
possible errors might be
- Reduces defects
CONS
encountered
- Investment in training
 Problem 2
 1. Strategizing the Reebok’s concept of
entering into other segment of the
market
 Rationale: To expand the share of the
market
 PROS
 - Market share will increase
 - Capture the demand of the larger
market
 - Answer the need of the customer
( focus )
 CONS
 Niche will somehow erode
 Out of concentration
 2. Concentrate on the heavyweight
category
 Rationale: To defend their
expertise segment of the market
 PROS
 -Preserving the pride of Harley-
Davidson
 CONS
 -Lost opportunities in the market
 -Can’t cope up with the demand
 -Will not answer the need of the
customer ( focus )
 Problem 3

 1. Implement a Dell Computer

Corporation “ Customer Focused
Products”
 Rationale: To customize certain parts
prior to its order
 PROS
 - Orders will be addressed
 - Inventory will be controlled
 - Will eliminate problem in mass
customization
 - Secure a 12% premium through add-
on and upgrade
 CONS
 - Additional hold over area
 - Increase manufacturing cost by 5%
( based on Dell’s account)
 RECOMMENDED SOLUTION,
IMPLEMENTATION & JUSTIFICATION

 Problem 1
- “Employ Six-Sigma Approach”
 Ultimate solution to address backlog as it is a customer
focus
 Manpower are trained and open-minded
 Originated from American culture
 First pilot project will then form another sets of group
 Six sigma level means 99.99966 or 3.4 dpmo
 Problem 2
“Conceptualize Reebok’s Idea or Diversification”
 Enter into other segment of the market
 “Jack of All Trades”-defending “your cream of the crop” and
increasing the share on lightweight category
 Reebok was able to defend its 45 years and above category and
getting a lion’s share of 12-35 years category because of its buying
power
 Problem 3
 Strategize Dell Computer Corp. “Customer Focused Products”
 Idea of Dell’s offering a customer a means of choice and then
assemble the individual computer to the precise specification is
applicable to motorcycle industry
 Market demand is inevitable and needs a customization to have
control of the process
 Customer’s feeling of satisfaction as they were highly regarded
 Provides a specific products both quickly and cost-efficiently
 SUMMARY
 In summary, Harley-Davidson has to consider the
following
 1. Increase the market share by including
lightweight category to their stronghold base
 2. Employ the Six-Sigma concept to make sure
that production backlog and quality problems
will be addressed.
 3. Customize to precise customer specification
thus reducing the fear of big inventory
 Gantt Chart

Activities Responsible Resources Target Date Remarks

Qtr 1 Qtr 2 Qtr 3 Qtr 4

1. Identifying and selecting GM Black Belt seminar, project

the project

2. Forming the team Sponsor seminar, manpower

Implementation
3. Developing the charter Leader

4. Training the team HR seminar

5. Doing DMAIC and Team access to operation

implementing solution

6. Handing of the solution Six Sigma Team

Thank you !!!