Any time the company is looking into software project, there are areas associated with risk such as cost, time and relationship with suppliers. However, for Harley-Davidson, “collocation of suppliers with production facilities and their integration into company’s development process was the essential part of long-term relationship development”. Through a continued focus on collaboration and strong supplier relationships, the company could position itself to achieve strategic objectives and deliver cost and quality improvement over the long-term. Since, at that time company had no centralized system in place to handle relationship with suppliers and consequently, most of company’s time was spent on supplier management activities. For example, reviewing inventory, expediting and data entry. Furthermore, each supplier had different information systems for “Maintenance, Repair, and Operations (MRO), Original Equipment (OE), Parts and Accessories (P&A), and General Merchandising (GM) purchasing activities”. The systems, already provided by supplier, had to be further modified to meet individual need at each location, such as “the OE system at Harley-Davidson’s York, Pennsylvania site was different from the OE system in Kansas City”. However, due to long-standing tradition of gradual change implementation and focus on quality, quick transitions were unwelcome and did not come easy for the company. The size of the project determined how much risk was involved in terms of cost, time, and supplier relationships. The idea of switching to global purchasing system was seen as a threat not only in supplies and production flow interruption, but also in damaged dealer/customer relationships and lost sales. Furthermore, failure of the system to meet the expectations of users could potentially cost the management credibility with employees and suppliers.
Major issue in purchasing process for procurement and management of incoming supplies
In 1995, Garry Berryman recognized the purchasing process for supply chain management was out of control and supplier’s relationship was undervalued, resulting in long manufacturing times, product being expensive and more to be desired in terms of product’s quality. For example, all Harley-Davidson’s product development and manufacturing was based in U.S. and represented nearly 60 percent of a motorcycle cost. Additionally, although the product line has evolved within time, the longevity of the product life cycle wasn’t changing as frequently resulting in same models being sold over and over again.
For better understanding of company’s issues, management decided to conduct a stakeholder survey among such departments as Accounts Payable, Human Resources, and Logistics, who would be affected by the new system. This survey revealed areas with some redundancies and the need to consolidate commonalities across the site. Everyone was surprised to learn that over 80 percent of purchasing time was spent in...