ERP ASSIGNMENT

REPORT ON HARELY DAVIDSON CASE STUDY

SUBMITTED BY:- Group 10

NAME PRN
ABHIJEET PAWDE 19030141002
IVA RANJAN 19030141023
AMEY RANE 19030141055
VRUSHALI SONAVANE 19030141071

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Table of Contents
1. Observations on HD’s business outlook, business strategy and challenges. ...................................... 3
Introduction ........................................................................................................................................ 3
Business Strategy ................................................................................................................................ 3
 Just-in-time inventory (JIT): .................................................................................................... 3
 Employee involvement (EI): .................................................................................................... 3
 Statistical operator control (SOC): .......................................................................................... 4
2. Merits of the strategy that influenced the selection of ERP ............................................................... 4
 Problem Statement ..................................................................................................................... 4
 Supply Management Strategy ..................................................................................................... 5
 Project Scope .............................................................................................................................. 5
 Project Execution ........................................................................................................................ 6
 Alternatives ................................................................................................................................. 7
 Provider 1 ................................................................................................................................ 7
 Provider 2 ................................................................................................................................ 7
 Provider 3 ................................................................................................................................ 8
3. Process and business integration related issues, cultural issues, etc. ................................................ 8
4.Comments on the overall ERP selection process ............................................................................... 10
5. Comment of related issues such as, project monitoring, post implementation tasks, etc. ............. 10
 Project Monitoring Task :-......................................................................................................... 10
1. Monitor and Control Project Work ....................................................................................... 10
2. Perform Integrated Change Control ..................................................................................... 11
3. Verify Scope .......................................................................................................................... 11
4. Control Scope ........................................................................................................................ 11
5. Control Schedule ................................................................................................................... 11
6. Control Costs ......................................................................................................................... 11
7. Perform Quality Control........................................................................................................ 11
8. Report Performance.............................................................................................................. 11
9. Monitor and Control Risks .................................................................................................... 11
10. Administer Procurements ................................................................................................. 12
 POST IMPLEMENTATION TASK :- .............................................................................................. 12
Recommendations ................................................................................................................................ 13
Conclusion ............................................................................................................................................. 13

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1. Observations on HD’s business outlook,
business strategy and challenges.
Introduction
 Harley-Davidson is an American motorcycle manufacturer with a rich history and cultural
tradition. Founded in 1903 in Milwaukee, WI, Harley just celebrated its 100th anniversary
with a series of events around the world that culminated in hundreds of thousands of
motorcyclists rallying last summer on the shores of Lake Michigan.
 In 1929, there were 241 motorcycle manufacturers in the US. After the Depression, only two
remained: Harley and Indian. By 1953, Indian went out of business, leaving Harley-Davidson
as the only American motorcycle manufacturer.
 A financial difficulty in the 1970’s led to the parent company, AMF putting the motorcycle
division up for sale. Without a buyer, a group of Harley managers bought out the company
and rescued it with a business turnaround that included brand extensions into licensed
goods, such as apparel and related accessories.
 Now a publicly owned company, Harley has scored double digit growth for eighteen
consecutive years.
 Harley transformed itself into a strong marketing company with a focus on lifestyle image
and product quality. The company specializes in the production of motorcycles which makes
sale worldwide.

Business Strategy
 Just-in-time inventory (JIT):
 Just-in-time inventory "was the driving force of Harley's quality-improvement program.
Suppliers of Harley had to implement JIT into their production process in order to
compliment Harley's system. Previously, Harley utilized a complex, computerized
inventory system, Material Requirements Planning, which was based on maintaining
high levels of stock, to offset any manufacturing problems, so the assembly line would
not be halted.

 Employee involvement (EI):

 Successful implementation of any company program occurs when there are a
commitment at all levels of the organization. Top management must not only direct but
take direction from the lower level employees. Harley has set the following nine
guidelines to follow for successful employee involvement.
 Management must take a actions about continuous improvement of quality and
efficiency of the employee.
 Management must be should be encouraged the employee to develop and
grow.
 There must be a mutual trust between employees and management.

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  Employees must be thoroughly trained in specific problem solving and quality-
control techniques.
 Managers must encourage participation from everyone.
 Employees must be given responsibility and authority for production, quality,
preventive maintenance, and other aspects of their jobs.
 Individual employees must help each other develop and grow.
 Employees must attack problems, not each other-that is, there must be no
finger-pointing when things go wrong.
 Creativity must continuously be encouraged through a free, non-threatening
atmosphere.

 Statistical operator control (SOC):

 In the beginning Harley-Davidson believed that their present machinery was unable to
produce quality products. But, with the implementation of the Statistical Operator
Control (SOC) process they soon realized that it was not their equipment but their
methods. "SOC involves using simple statistical techniques and control charts to monitor
the variation in a work process". Harley realized that this process would only work if the
responsibility of quality was placed upon the persons who had direct contact with the
materials (operators).

2. Merits of the strategy that influenced the selection

of ERP
 Problem Statement
 This case occurred in from 1997-1999. The purpose of the case was to critique the way of
choosing a modular ERP machine to assist supply chain management for this massive
production corporation.
 Recognizing that the purchasing system for acquiring materials and components was out of
control, coordinated a mission to acknowledge its shopping system and sports, solicit
comments from the 800 people that might be suffering from the new device, and make an
entire transformation in thinking and action regarding the procurement and management of
incoming elements.
 In addition, management wanted to move the employer from a brief-time period transaction
buying foundation to a long-time period courting with providers.
 In addition to picking an ERP machine, Harley Davidson was curious about developing
supplier relationships with key companies. They desired the new device to facilitate this
development.
 In the case, the managers went as a long way as making the difference between dealer and a
supplier indicating that a seller is someone selling on the road nook and a dealer was an
extension of the amount one commercial enterprise.

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 Supply Management Strategy
 The company had extremely patchy purchasing functions. Albeit all development and
manufacturing remained within the US, materials represented nearly 75% of product cost.
They used different invoices, schedules and procedures in every facility. Suppliers
complained that they were handling three different companies, sometimes receiving orders
from various facilities within the same day. Harley had many suppliers and no system of
coordination or relationship management. Because the corporate was steeped in cultural
traditions of gradual improvement and quality ideology, dramatic change was an unlikely
outcome.
 As in any major software project, the corporate faced three sorts of risk with this endeavour;
size, experience, and structure. The dimensions of the project determined what proportion
risk was involved in terms of cost, time, and supplier relationships. Switching over to a
centralized purchasing system may have resulted disruptions in supplies and production
flow, costing the corporate in lost sales and dealer/customer relationships. Failure of the
system to satisfy the expectations of users would cost the management credibility with
employees and suppliers. We don't know the choice process cost. Because this project
consisted of only two ERP modules together and delivery management, it had been not as
large in size and posed only moderate organizational risk. Harley employees had experience
with many various software systems to support various activities.
 They didn't have an ERP system, so there was some risk involved within the coordination of
all purchasing activities among facilities under one program. Because the managers
understood the strong culture and history of the corporate, they structured the project
carefully to make a change in thinking before creating a change in software. The methods
they wont to survey purchasing people, involve representatives from all areas of the
corporate , understand the method , work with suppliers, and choose an ERP provider to
grow with company and its future needs. All of those components helped to scale back the
danger of the project

 Project Scope
 To get a far better understanding of the scope of their problem and to plan the project,
managers decided to survey those that were liable for purchasing. They intended to get
what activities purchasing people administered and the way much time and energy went
into procuring materials. Everyone was surprised to find out that 85% of buying time
was being spent in non-strategic activities, like counting inventory, data entry and
expediting. While the corporate had 200 purchasing staff, the survey revealed that over
2,000 people were issuing purchase orders. Quantitative estimates provided a possible
savings of an ERP implementation for purchasing at $34 million. Data like these helped
to urge people committed to creating the project a hit. The project scope had to spot
the purchasing activities, the stakeholder groups (owner, driver, or participant), and
therefore the audience (800 people). Additionally, the scope had to fine tune the small
print needed to make a software quote request and an inventory of supplier selection
criteria. This helped to answer the following questions:
 Who will use the system?
 What will the system have to do?
 How can we make the implementation a success?

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  Which vendor can best provide the functionality, support, and scalable potential?

 Project Execution
 Even though the method took over two years, Harley managers did a comprehensive job
of choosing the ERP solution. It appears that the Silk team did an honest job preparing
for the project evidenced by the careful mapping of the “as is” process and of the “to
be” process. This helped to scale back and manage project scope creep. Typical of lower
risk, low technology projects, the small print in planning generally pay dividends within
the sort of reduced implementation time at a cut over to a replacement system. Poor
planning can cause huge cost over runs and delays in system implementation. More
serious problems can occur if the system cannot deliver on promises made in initial
project justification. These are the sorts of problems over which project managers can
lose their jobs.
 We expect that external consultants could have helped with the initial assessments. This
might have helped Harley Davidson get a broader picture of the purchasing organization
and allowed for the utilization of best practices from other industries. They'll have done
this—we don't know from the case. Great planning that's myopic doesn't necessarily
cause the simplest solutions. The time Harley Davidson spent on the initial phase of the
project is far longer compared to either Tektronix or Cisco. Within the case of Tektronix,
they were happy throwing extra money at implementation problems to remain on
schedule. Tektronix also suffered from their lack of designing with previous
implementation failures. Cisco succeeded in meeting the short, implementation
schedule through the utilization of a really standard, off-the-shelf system. Less
customization of any ERP system results in lower costs and quicker implementation
schedules. A typical system is simpler to upgrade also. Customizations are often required
to make sure systems can meet a company’s requirements. More complicated
businesses enjoy a mixture of re-engineering and ERP customization when implementing
an ERP system.
 The successful ERP selection at Harley Davidson wasn't a result of planning alone. The
case paints the image of the culture of HD well. This culture is brought call at the design
of management and therefore the previous the approach to the project and the
selection process. Their use of their internal business integration (BI) of process, people
and technology was consistent. It might send an honest message to the organization.
Their definition of full time members as a Tuesday through Thursday was interesting.
This is often contrary to our experience of Monday through Friday being full time. The
rationale they gave does have merit. Full time members can lose track of the day-to-day
business and not realize the impact of pending changes. Seemingly small obstacles can
end up to be the most important problems of system acceptance.
 There are some folks that think a replacement ERP system can fix all of an organization’s
ailments. This is often simply not true, as bad processes are often the basis explanation
for many ERP installation failures. The last paragraph of the case mentions the question
of linking the availability Management Strategy (SMS) and procurement system. Without
the link, this process could have failed. The risks of not linking were above with linking
because the procurement system should be checked out as an enabler of the SMS
process.

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  Alternatives
 Eight suppliers submitted a response to the RFQ and self – evaluation checklist. Harley
Davidson team used the checklist as quantitative measures of the initial functionality.
Evaluation of written proposals, presentations and notes from each provider was done.
Elimination was done narrowing the potentials providers to only three.
 The SiL'K team already had determined that Harley-Davidson was in need of a modified ERP;
it also was adamant in the beginning that it was "not seeking a full ERP solution, that the
scope was well defined and those suppliers shouldn't waste time pitching additional
functionality" (Sole, Cotteleer and Austin, 2003; p. 9). Harley's Architecture Integration
group reviewed all possibilities to ensure compatibility with existing systems. Of the eight
potential suppliers responding to Harley-Davidson's RFP, the company narrowed down its
choices to three.
 Provider 1
 Provider 2
 Provider 3

 Provider 1
 Scored 93.4% on self-evaluation
 Written proposal tailored to requirement document in RFQ
 Functionality wasn’t good enough
 Their package didn’t provide web enablement (directly)
 Provider1's "representatives asked appropriate questions, they clearly acknowledged Harley
Davidson's values, and seemed comfortable with the casual but competent Harley Davidson
style" (Sole, Cotteleer and Austin, 2003; p. 11). Provider1 addressed every issue raised in
Harley Davidson's RFQ, and tailored its solutions perfectly to the requirements set out by
Harley-Davidson. Provider1 did not offer the highest form of functionality, and did not offer
"'web enablement' directly but its team proposed integrating a partner solution" (Sole,
Cotteleer and Austin, 2003; p. 11). On the other hand, Provider1 was comfortable with the
change management issues that would arise in making the changes that the company
sought.

 Provider 2
 Scored 98.7% on self-evaluation
 Major ERP supplier
 Functionality was perfect (web-enabled interface)
 Extremely professionals, even more formal than what Harley Davidson are used to.
 Their presentation was flawless and comprehensive
 They provided package for writing training documentation
 They didn’t emphasize methods or processes for assessing organizational needs & preparing
people for change
 More expensive than other providers
 Provider2 was a major ERP supplier in the industry and also was an early leader in the
selection process. Provider2 offered a higher functionality score. Its team also was quite
formal and in that sense did not "fit" with Harley-Davidson, and it also maintained a heavy
"consultant" attitude. Further, Provider2 did not "emphasize methods or processes for

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 assessing organizational needs and preparing people for change" (Sole, Cotteleer and Austin,
2003; p. 11).

 Provider 3
 Scored 96.8% on self-evaluation
 Also a major ERP player
 Functionality wasn’t fully demonstrated
 Already engaged by Harley Davidson to provide systems in different functional area
 Boilerplate used that some questioned whether they have even read the RFQ
 They were late for the presentation
 Presentation was a disaster
 Harley Davidson felt antagonized by condescension of the supplier representatives.
 Provider3 also was a major ERP supplier and recently had worked with Harley Davidson in
another area. Provider3's team was unprofessional to the point of being disrespectful, but it
did score high on functionality. Even so, the Sil'K team believed that Provider3 could offer
"potential political and economic advantages" (Sole, Cotteleer and Austin, 2003; p. 11).

3. Process and business integration related issues,

cultural issues, etc.
 Harley-Davidson’s Issue are based on the current limited focus of the business. This element
of the SWOT analysis tackles the internal strategic factors that prevent the company from
maximizing its performance.
The following are Harley-Davidson’s most notable issue:
• Narrow product mix
• Limited market reach
• Limited supply chain

 Harley-Davidson’s narrow product mix is a weakness because it prevents the business from
reaching more market segments. For example, the company focuses mainly on chopper
motorcycles. Harley-Davidson is also weak because most of its sales are generated in North
America. The company has insignificant or nonexistent sales in developing countries. In
relation, Harley-Davidson has a limited supply chain that hampers potential expansion in the
global motorcycle market. In this element of the SWOT analysis, it is shown that Harley-
Davidson must overcome its weaknesses to support global growth and expansion.
 The issue facing Harley-Davidson are based on market trends and legal structures. This
element of the SWOT analysis covers the external strategic factors that could reduce the
company’s performance.
The following are notable issue against Harley-Davidson:
• Aggressive competition
• Imitation
• Increasing preference for electric vehicles

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 Aggressive competition threatens Harley-Davidson. For example, Toyota and other
motorcycle manufacturers are aggressive in selling low-cost products. Harley-Davidson also
faces the issue of imitation, especially now that other companies are also offering
custom/chopper bikes. Moreover, the environmentalism issue has a negative impact on
Harley-Davidson, whose products and brand are known for internal combustion engines. In
this element of the SWOT analysis, Harley-Davidson must implement product innovation
strategies to address the issue to its business.

Factors that create Issues:-

•Political Factors that Impact Harley-Davidson, Inc.
Political factors play a significant role in determining the factors that can impact Harley-
Davidson, Inc.'s long term profitability in a certain country or market. Harley-
Davidson, Inc. is operating in Recreational Vehicles in more than dozen countries and
exposes itself to different types of political environment and political system risks. The
achieve success in such a dynamic Recreational Vehicles industry across various countries is
to diversify the systematic risks of political environment.

• Economic Factors that Impact Harley-Davidson, Inc.

The Macro environment factors such as – inflation rate, savings rate, interest rate, foreign
exchange rate and economic cycle determine the aggregate demand and aggregate
investment in an economy. While micro environment factors such as competition norms
impact the competitive advantage of the firm. Harley-Davidson,
Inc. can use country’s economic factor such as growth rate, inflation & industry’s economic
indicators such as Recreational Vehicles industry growth rate, consumer spending etc. to
forecast the growth trajectory of not only --sector name-- sector but also that of the
organization.

• Social Factors that Impact Harley-Davidson, Inc.

Society’s culture and way of doing things impact the culture of an organization in an
environment. Shared beliefs and attitudes of the population play a great role in how
marketers at Harley-Davidson, Inc. will understand the customers of a given market and how
they design the marketing message for Recreational Vehicles industry consumers.

•Legal Factors that Impact Harley-Davidson, Inc.

In number of countries, the legal framework and institutions are not robust enough to
protect the intellectual property rights of an organization. A firm should carefully evaluate
before entering such markets as it can lead to theft of organization’s secret sauce thus the
overall competitive edge.

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4.Comments on the overall ERP selection process
 Harley-Davidson developed ERP selection process. They made a framework and operational
strategies which had a high possibility of functionality and statically differences among other
competitors. They put some measurable attributes (low, medium, high) that was possible useful
to implementation, technical support and long-term relationship.
 According to the SiL’K strategic road map, the availability management strategy is driven 50-75%
by people, 20-40% by process and 5-10% by technology. Let this be the guideline in selecting the
integrated procurement system provider. Each potential supplier offers advantages and
drawbacks. However, Provider 1 clearly paid the foremost attention to Harley values and
represented the simplest cultural fit Harley-Davidson. This may be absolutely critical for a
successful implementation, training, roll-out, and adoption throughout Harley-Davidson.
Provider 1’s only drawback is that they might only meet all of the specified functionality by
employing a partner solution for web enablement. Provider 2 offered the simplest functionality
with a 98.69% fit, but presented a really formal, consultant attitude that didn't mesh well with
Harley’s culture. Provider 3 offers a possible technology advantage since they're engaged in
another Harley-Davidson project at this point. However, their boilerplate functionality was
unimpressive, and therefore the team was very poor at recognizing the social culture at Harley
Davidson.
 Overall, in our opinion, that they had a superb approach to the entire process. They took the
time to try to it right. They spend almost a year indoctrinating the strategy, creating enthusiasm
and commitment around it, within the corporate. As for the method selection, they made sure
that each one department or groups that might be subject to the change, made a part of the
method. There’s, however, one thing were they lacked in our opinion. They made a really rigid
set of functionality requirements. One may wonder if they didn't neglect functionalities that
they didn’t need at the instant, but might need within the future. We expect they didn't pay
much attention to the longer term trends of the industry. They might even have done some
benchmarking, watching companies on an equivalent sector or similar.

5. Comment of related issues such as, project

monitoring, post implementation tasks, etc.

 Project Monitoring Task :-

1. Monitor and Control Project Work
 This includes tracking, reviewing, and reporting progress to meet the performance
objectives defined in your ERP project management methodology.
 Regularly assessing progress related to scope, benchmark goals, timeline, and budget, which
will help ensure there are no unpleasant surprises as the project unfolds.

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2. Perform Integrated Change Control
 Even well-planned projects are going to require change from time to time. Therefore the
following processes are essential: reviewing all change requests, approving changes,
managing changes to the deliverables, and organizing process assets, project documents and
the project management plan.

3. Verify Scope
 Verifying the scope includes monitoring the status of the project and managing changes to
the scope baseline.
 This phase also requires a re-visiting to other process groups to be sure all objectives have
been met. If this is not the case, reflecting any changes is part of the follow-through needed
as the project continues toward completion.

4. Control Scope
 If there have been adjustments to budget, timeline, or the desired end-product, it is
important to re-visit the documentation related to scope and mitigate any unresolved
challenges.
 Controlling the scope also entails maintaining effective communication with stakeholders
and related stakeholders, which will keep everyone updated and engaged in the project’s
success.

5. Control Schedule
 Schedule control involves controlling project progress adjustments and addressing any
unforeseen circumstances in relation to the project schedule baseline. Monitoring the
project properly to decrease the chances of schedule issues becoming major setbacks.

6. Control Costs
 Since there is the potential for many factors to affect cost throughout the project timeline,
this group must keep track of any changes in budget so communication around cost control
is clear and accurate.

7. Perform Quality Control

 This group must quantify and report any and all quality control issues. This action is
necessary and ongoing to support the accuracy and responsiveness of the project. Make
process adjustments based on findings during monitoring.

8. Report Performance
 It is imperative this group collect and report performance data in order to complete proper
forecasting with regard to timeline and phasing.
 To support positive relations, it is necessary this project group keep stakeholders aware of
team progress toward benchmark goals.

9. Monitor and Control Risks

 Tracking risk, responding to documented risk, and evaluating response to risk is all part of
ensuring the project progresses effectively through each phase of the timeline.

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 10. Administer Procurements
 Because team needs will change throughout the project, additional items may be required
while other items and services may not be needed at all.
 In order to deliver the project within or as close to budget as possible, it is necessary to keep
track of all paperwork that documents any changes in contracts.

 POST IMPLEMENTATION TASK :-

 A successfully implementation ERP system will not automatically produce results. As
technology advances, new software with more features and capacities will emerge. This
requires continuous improvements, continuous learning and an ongoing implementation.
 Most of the companies treat ERP implementation as projects, with the assumption that
someday the projects will but the ERP system cannot end with the implementation. Once
the implementation phase ends and staff have started using the ERP system, the real
benefits of the ERP will be soon.
 Employee Relocation and Re-Training, Continuous Training

Break-Down Maintenance: This is a reactive approach, i.e., dealing with break-downs or problems
when they occur. Preventive Maintenance: This is a proactive approach, i.e., reducing break- downs
through a programme of lubrication, adjustment, cleaning, inspection, and replacement of worn
parts.

Success Factors: Project planning , Align the Organization on the true destination. Architectural
Design , Transition project roles to a way of life. Data Requirements

Organizational Impact: Enterprise Resource Planning (ERP) is one of the most popular' software
technologies for 'supporting operational organization, it emphasizes business transformation which
will lead to process change in its effort to maximize the company's benefit.

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Recommendations
 First, they could have researched the literature on what types of problems mechanistic
manufacturing organizations face when they try to implement an ERP system in a highly
inflexible environment. There was enough research and case analysis available to do
this. While they were clearly aware of potential change resistance and the need to get
all stakeholders involved, the amount of time their search and selection process
required was ridiculous in today’s business environment. We speculate that the sheer
demand and high prices of their product allowed them to wallow in their inefficiencies a
few more years before they had to bite the bullet.
 Second, obtaining the advice of experienced software and supply chain consultants
earlier in the process probably could have saved some time and created a defined focus.
Often, managers use the discipline and recommendations of consultants to reinforce the
need for organizational change. With the purchasing process out of control, they could
have brought in some purchasing expertise to clean up some of the mess before
selecting a software system to help organize the process.
 Third, we questioned the research methods and bias of the data. However, if Harley
eventually got what they wanted and it turned out to be a success for them, then
perhaps their methods were valid. We do not know final cost figures and messier details
of implementation (schedule, support, etc.). There are many technical details that we
also know nothing about. Three out of five comments in the making the decision section
suggest the people side was more important that the functional side. In reality, the
functionality of any finalist should not be questioned. To get to the final round, the
product has to work. It is analogous to having to have a certain quality level to sell
products. The team was looking at the project from the implementation and buy-in
standpoint of the end users, which was appropriate. They tried to remain close to the
end users from the start.

Conclusion
 The most important aspect in evaluating the providers is the functionality and the
related training. However, from the beginning, Harley-Davidson's management had
stressed that proposals should not strive for greater functionality than the company
asked for, but then it graded the finalists on functionality. This was a mixed signal point
of confusion, but other points were not.
 Even so, assigning weights to selection points and ratings to each provider returns
Provider1 as the most appropriate choice for Harley-Davidson

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