Harley Davidson's Customer-Centered Supply Chain

Harley Davidson been in business for over a hundred years. The company operates in several related markets. They sell motorcycles, motorcycle parts and operate a financial component. Additionally the company operates in Europe, North Africa, the Middle East and Asia. All Harley-Davidson business segments operate internationally.

The Bargaining Power of Suppliers (Moderate): Most of the industry’s products are sourced and manufactured by a network of third parties. The supplier group is diluted compared to the industry; KMD alone has over 45 suppliers. There is credible threat of suppliers adopting forward integration resulting in loss of major suppliers and emergence of new competitors for the industry. Highly effective and specialised products will pose high supplier switching costs for industry firms.

Bargaining power of supplier: High levels of competition among suppliers act to reduce prices to producers. This is a positive for Ford Motor Company. Standardization of parts allowed Ford to reduce dependency on fixed supplier/vendor which goes into producer’s favor.

Bargaining Power of Suppliers: A producing industry requires raw materials - labour, components, and other supplies. This requirement leads to buyer-supplier relationships between the industry and the firms that provide it the raw materials used to create products. Suppliers, if powerful, can exert an influence on the producing industry, such as selling raw materials at a high price to capture some of the industry's profits. Tesco maintains direct professional business relationships with all their suppliers of organic food and non-food product worldwide. They also conduct supplier viewpoint surveys to find out what their suppliers think of Tesco.

Harley-Davidson's mission statement is to "fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments." (Harley Davidson, 1999). The company's main objective for the entire organization s is to have happy and satisfied stakeholder; this includes their customers, employees, suppliers, investors, and the entire society in general. Harley-Davidson makes the customer's experience with their products the core of their business and every effort is made to make this experience as enjoyable as possible. It is this strategy that has helped Harley Davidson meet its current level of success.

Then in return, these stakeholders will continue purchasing their products throughout their life time due to their unforgettable experience they have doing business with Harley-Davidson. Harley-Davidson believes the backbone in their business is their strong brand name and their loyalty with customers.

Since the founding of Harley-Davidson in 1903 by Arthur and Walter Davidson and William Harley, the company has a rich heritage and a loyal following. The company has proven to be resilient and innovative throughout the years. They have made their fair share of mistakes, especially while under the ownership of AMF, whose decisions almost destroyed Harley-Davidson. They have also made an inspiring come back, recapturing their share of the market and more. Harley-Davidson has managed to attract all sorts of riders including motorcycle “rebels”, women and blue and white color workers. In fact, in our church small group there are two

Harley-Davidson has managed to dominate the U.S. market by investing in research and development, experimenting with its designs and

Since Harley Davison Motor Company started in 1903, they have been successfully “taking the work out of bicycling” better than any other motorcycle manufacturing company. They have experienced great success recently with growing numbers in their percentage of motorcycles shipped, up 14 percent from 1997, and their target market size, up 13.8 percent from 1997. Their brand has also grown so strong over the years that customers are willing to wait up to two years for a motorcycle. The problems that Harley Davison is faced with are how to improve their existing purchasing process, how to integrate their existing procurement methods together, and how to develop longer term

Honda always tries to maintain relationship with suppliers. It is hard to communicate effectively in Honda’s four trade zone but Honda always pays attention to it. As Mr. Morita says, “Honda places value on maintaining relationships, so we do not enter into them lightly.” Different from companies which focus on the immediate benefit of low cost rather than long-term benefits of maintaining relationship, Honda values suppliers and tries best to maintain

Excellent customer service is a way to set the organization apart from its competitors. Differentiation can be achieved through fast and correct execution of product ordering. To improve on the order process it is important to have the correct information provided in a timely fashion to all divisions. For integration to be successful information must be available throughout the entire supply chain.

The success of Harley Davidson (HD) is due to the American motorcycle icon’s effective Strategic Management. HD’s vision, mission, goals and objectives strive to exceed the requirements of its main stakeholders. Although these needs are not always met, the company has unique relationships with is stakeholders. The company stays on course with its strategic plan, despite the economy and the decline of American manufacturing and what might be considered its dwindling U.S. consumer base.

During its period of peak demand, the company expanded the number of dealerships throughout the country. At the same time, its current dealers typically had waiting lists that extended up to a year for some of the most popular models. In August 2009, Harley-Davidson announced plans to enter the market in India. The company established a subsidiary near Delhi, and began the process of seeking dealers.[6]

3: How can supply chain strategy help John Wolf reduce investment and space requirements while maintaining adequate service levels?

The company uses target pricing for the parts they purchase from suppliers. To Honda, customer satisfaction is top priority which they accomplish through suppliers competitiveness in quality, cost, delivery, development, and management. Honda gives its suppliers target costs and it reduces the cost through own ideas, technology, and improved productivity. Exhibit 1 illustrates Honda’s supply chain.