The series of activities that are enacted by a firm that add value to a product beyond the cost of the production are referred to as the value chain. Harley Davidson offers a combination of superior performance and unique attributes within its value chain that promotes their core competencies and provides them with a competitive advantage.
Harley Davidson’s approach to the manufacture of motorcycles creates value as raw materials evolve into sellable products. The 40,000 square meter plant in Kansas City, Missouri is laid out in a fashion that permits the backward integration of components within the production facility. From the fabrication of parts to the production of engines onsite, a single V-Rod is built by the 1,100 employees of this factory in less than 3 hours from start to finish.
The 2,100 square meter engine assembly area of the factory is capable of building the liquid cooled V-Twin for the V-Rod in approximately 2 hours from 370 components. Each of the 10 individual workstations takes approximately 7.5 minutes to complete its task. Building the engines onsite permits the firm to save on transportation costs of having the engines built at one location and shipped to another and decreases the carrying costs of inventory by using Just-In-Time production.
Fabrication at the factory utilizes a mix of robotics and manual labor to produce the body of the V-Rod. Robots that are designed to cut pipe are capable of completing a single operation within 3 seconds. Other fabrication robots utilize 1800 watt lasers that can perform cutting operations at the rate of 100 inches per minute. Where robotics can be used to perform high speed cutting and welding operations, skilled workers are able to provide necessary touch up work to provide the necessary quality of output to meet product specifications.
By having painting operations performed internally, the firm is able to control quality by maintaining restrictions on workers in this department. Workers within the paint area are prohibited from performing their job functions with the usage of specific foods, colognes, or fabric softeners due to imperfections that result within the completed finishes. Completed assembly of a standard production V-Rod is completed in less than 3 hours using 450 components, with onsite testing and quality assurance departments to test for visual and performance imperfections. An onsite repair crew allows the firm to save on outsourcing the costs to another organization while minimizing production downtimes within the plant.
Workers within the Harley Davidson factories are cross trained to be responsible for multiple areas of production. The Kansas City plant is capable of producing 50,000 V-Rods per day as a result of tight operating procedures, worker flexibility, and vertical integration. Triumph Motorcycle, one of Harley Davidson’s direct competitors is capable of producing 50,000 motorcycles per day which is...