Harley Davidson’s Customer-centered supply Chain Essay

1. How can Harley Davidson marketing and sales, personnel interact with its purchasing personnel to further strengthen the supply chain and improve customer loyalty? To further strengthen the supply chain and improve customer loyalty. Harley Davidson marketing and sales personnel must interact with its purchasing personnel to integrate the supply chain from supplier of raw materials and getting the product delivered into the hand of user at the right time, cost and quality user need it. Harley integrated effort must focuses on people, process and technology to improve supply chain development by enhance quality, reduce cost and improve delivery time to make sure every stage of supply chain reach their objective and satisfy customer need and wants. People The Supply chain improvement effort involves participation from all Harley productions such as marketing, sales, supplier, engineers, transporter and other involver with Harley. All of them must have the knowledge about customer need and wants. Marketing and sales personnel must have a good knowledge about customer need and wants. This is to ensure the best information can be transferred to purchasing personnel for making purchasing material that can suite customers need and wants. Harley marketing and sales personnel make a community marketing; they don’t just sell a motorcycle but also selling an ownership experience. Harley Davidson delivers membership in a community, arranges adventure tours and sells a lifestyle for the Harley purchaser, it can be concluded total product far exceeds the motorcycle. All activities are to make sure the marketing and sales personnel kumpulkan data about the customer need and want, and easily transfer to purchasing personnel to make development about the material. Marketing and sales personnel also must make market-based assets, such as strong branding, strong customer base and strong partner networks, when product development from the customer’s information database launches the new product introduction. It will help maintain firm performance and greater chance of success, as customers are more willing to try a new offer from a strong brand. This supply chain development through enhance quality, reduce cost and improve delivery time can easily be done if the people in the Harley fully participate to achieve it and indirectly improve customer loyalty. Process Harley-Davidson is known for delivering a consistently high quality product. There are a number of different areas in the process that affect their quality, starting with product design. They work to design quality into the products they develop, and they do this through a concurrent pride methodology, which is very specific for both product development and the input that they get on design from marketing and sales people, engineers, manufacturing people, and suppliers. They involve everyone in the early stages, and everyone effectively designs products together to suite customer need and wants and indirectly improves customer loyalty. Technology. Fast information from marketing and sales personnel is important, so Harley use communication technology via web portal to transform customer buying habits through their dealer and supply chain control for their demand on material. It makes all the material came to factory just in time and safe a lot of money. Just in time inventory was driving force of Harley quality-improvement program. As they operate with lower inventories, it becomes essential that all inventories are usable and it all have to be a good one. Harley-Davidson could not compete on price against the Japanese motorcycle producers, so it had to establish other market values and improve quality. Harley had to change from a company which dictated what its customers could have to strategies based on direct input from customers. A marketing philosophy was developed based on the customers desires, gathered through surveys, interviews and focus groups. For example Harley image promotes: a mystique appearance, individualism, the feeling of riding free, and the pride of owning a legend. Harley customer relations give a free 1-year membership to the Harley Owners Group (HOG), which was developed in 1983 as a program to keep people active with their Harley and community advertising campaign. 2. What is the role of technology in Harley’s supply chain? What additional uses of technology can you identify that might be useful to Harley focus on dealer and ultimate customer? The role of technology in Harley is to cut on communication and administrative time via their department, suppliers, dealers and customers. Harley use Harley-Davidson Suppliers Network (www. hdsn.com), the portal with web base technology to let all department, suppliers and dealer view purchasing order, inventory and material information order in real time. This should make Harley buying system more efficient, reducing time and reducing the amount of inventory in plant in other worth it enhance quality, reduce cost and improve delivery time. From the technology Harley can easily identified which dealer have a problem from their database. The company implemented a program to concentrate on helping its dealers develop the up-to-date business skills they need to sell motorcycles more effectively. The headquarters sponsored training programs that call â€Å"Harley-Davidson University† via this technology. The dealers are considered to be business partners and the headquarters plays an active role in developing programs, financing improvements, implementing support and management consultants. The dealers also invest their own money into these programs which allows them to feel like apart of the company. Harley-Davidson treats the dealers not only as partners, but also as customers. Harley has developed a very effective marketing strategy, but it is the responsibility of manufacturing to produce high quality and reliable motorcycles. 3. Some of Harley’s suppliers also supply key Harley competitors. How can Harley be sure these suppliers will not share competitive information with its competitors? How important is trust between suppliers and business buyers? Global business environment has become more unstable, supplier negotiations have taken important new role on helping improve corporate competitiveness. The goal of most supplier negotiations today is no longer just to get the lowest price. It is also to find new and innovative ways to meet a wide variety of business challenges, often by tapping into the knowledge and expertise of the supplier community and a good relationship. Harley can be sure their suppliers will not share competitive information with competitors on 3reasons. i. Harley is focused on building closer relationships with suppliers. The company does not use contracts but has instead begun to use the master supply agreement (MSA). The MSA is a list of guidelines for the relationship, rules to follow, and resolutions should problems arise, used with ?strategic’ suppliers with whom they anticipate having long-term relationships. Harley is just beginning to formalize the process of certifying suppliers as strategic, the cycle maker has such relationships with about 250 of its 350 suppliers. These suppliers command special attention from Harley and are invited quarterly for business planning meetings (BP). BPs are thematically organized meetings designed to help supplier understand Harley’s strategic issues. They give suppliers an opportunity to provide input and feedback, as well as coordinate on new projects. Strategic suppliers are brought in early to the design phase. They are brought in house, and many even have desks at Harley’s Capitol Drive research and design facility. Their input is solicited at the idea phase so that there do not have to be many revisions during the development process. They are also kept informed of the latest Harley strategies through a company newsletter, Harley World. ii. Supplier Management & Procurement Strategies of Wisconsin OEMs- Instead of purchasing all the parts for its brake systems and then assembling them in-house Harley would purchase an assembly that it would integrate with other purchased assemblies. Now, entrance into the Harley supply base will increasingly be secured through possession of the technologies and capabilities to build whole systems. Even if a supplier still supplies discrete parts directly to Harley, they will increasingly need to be able to apply new processes to those parts in order to continue doing business with the company, and new suppliers are added yearly as Harley pursues new technological capacities. iii. Suppliers have opportunity to have direct business buyer with full effort to help them to meet demands through its continuous improvement team. Harley good relationship makes them think twice to share competitive information with its competitors. For example Unisource Com. Supplier to Harley has grown from RM1. 5million in 1998 to between RM15-20million on 2001. This opportunity is like a gold mine to let go and broke master supply agreement that they have promise. Trust between suppliers and business buyer have advantage and disadvantage: i. Trust between suppliers and buyers generates significant benefits including motivating better performance and reducing negotiation time ii. Breaking apart, a trusted buyer-supplier relationship can be a significant barrier to entry for competitors. iii. The negative side of trust is that it can blind you to opportunities that arise outside established relationships The important of trust depend on both relationship, are those relationship have the objective to help each other to reach their objective. If yes the trust is most important thing between supplier and business buyer in other word they must have win-win situation.