Harley Davidson 2010 Annual Report Download - page 10

So what’s actually happening to become customer-led
in manufacturing?
Matt In the last 18 months, we’ve moved on a lot of fronts.
There’s transformation in our plants, culture and
workforce. The opportunity is bigger than any one plant,
too. Being customer-led in manufacturing is leading us
toward a common build process, with standard sequences
and standard equipment wherever you go across our
factories. It’s unprecedented for us.
Karl We have four plants and 300 direct suppliers who
we need to have on board in this transformation.
There are work systems that need to be “rewired,” new
labor agreements that need to be implemented to enable
these changes, and employees who need to be retrained
so that they have greater expertise at more things. We’ve
had cooperation and success in all those areas.
Our York plant was the rst location to take on the
transformation, and what’s happening there will give
you a pretty good picture of the future. We’re going from
a 1.5 million-square-foot factory to 650,000 square feet,
and consolidating our footprint into one building. We are
focusing in-house on the core activities of paint, assembly
and metal fabrication — all the things we excel at and
that make the plant better than the competition. Part of
our workforce will consist of exible workers who we
can deploy depending on production needs. We reduced
the number of job classications from 62 to ve and in
the process are removing boundaries to work assignments.
/ continued
Matt It’s one part philosophy and one part discipline.
It’s knowing what our customers value — and don’t value —
in our products and acting on that. Even though most of
us are riders, we can’t be satised with just our own
knowledge or the way we have always done things. We’re
doing more than ever to have the right conversations
with our customers and get their voice in the up-front
product development work. Then we’ve got to make sure
our production systems can deliver on that product
promise by getting the right bike to the right customer at
the right time. The motorcycle business is a seasonal
business, and a manufacturing model like we’ve had until
now — one that’s built for constant, level production — can’t
respond well to changes in demand or customer needs.
Karl And that’s meant a change for us, across the board.
You’ve got to remember that manufacturing processes in
any business are designed to make the same thing every
day, year-round. Doing that provides a certain level of
productivity and predictability for us and our suppliers
and employees who are skilled at certain things. But in
today’s world, that system is not nearly as agile in terms
of dialing production up and down when we need to.
And it’s not an efcient way to support the sales channel
and dealer network, either.
Matt So we needed to swallow hard and step away
from a manufacturing approach that worked for us
when demand outpaced supply, but wasn’t very exible.
With our historical manufacturing model, we were
producing motorcycles in the fall that probably wouldn’t
have been sold until the spring. And that forced
us to make three bets on the future: how many bikes to
produce; which models to produce; and where those
motorcycles were going to be sold at retail as we shipped
them to our dealers. We expect our new production
system to alleviate these issues.
Q&A with Matt Levatich, President & Chief Operating Ofcer, and Karl Eberle, Senior Vice President, Manufacturing, Harley-Davidson Motor Company
Why is Harley-Davidson transforming its
production and what does it mean to be
a customer-led manufacturer?
16 Customer-led Manufacturing 17Harley-Davidson, Inc. 2010 Annual Report
Matt Levatich (left)
and Karl Eberle