Harley Davidson - Just in Time Technology - Case Study Example

Harley Davidson - Just in Time Technology Introduction: The concept of Just in time technology has been popular among the business houses since a decade. The technology of Just -in -Time aims to increase the return on investment of the business by decreasing the process inventory and other carrying cost in the business. As a result the overall production cost of the business decreases considerably and it also enhances the quality of the product. The paper analyzes the case of Harley Davidson and focuses how the incorporation of the Just in Time technology enhanced the overall productivity of the business and helped it to overcome the business from the challenges it has faced in the last few years. Background Note: Harley Davidson is one of the leading manufacturers of motorcycle based in US. The company has a worldwide network and deals with heavy weight and custom made motorcycles. However the global brand in the motorcycle industry faced tough challenge in the market from motorcycle producers in Japan. The motorcycles produced in Japan were of better quality and involved lower cost than Harley Davidson in the production of the motorcycle. Besides the recession in the US economy also hampered the overall sales of the company and the organization also decided to curtail the number of the overseas shipment of motorcycles. JIT in Harley Davidson: After facing serious challenges from the Japanese motorcycle companies, Harley Davidson investigated the reason of success for the Japanese company and they found out that the Japanese company had incorporated the concept of the Just in Time process in their production technology. As result of the incorporation of the Just in Time, the Japanese firms were able to decrease their operating cost by 30% in comparison to the Harley Davidson. The study encouraged Harley Davidson to opt for the Just in time. Just in time evolved to be the driving force for gaining overall improvement in the quality of their products. The concept of Just in Time specified that in keeping a lower quantity of inventory in the production process, it is mandatory to keep all the inventories in a usable condition. In order to implement the concept of JIT in the system the suppliers of the Harley Davidson also had to implement JIT in their production process. The success of the JIT environment depended heavily on the delivery of appropriate quantity of the right materials at the required time. Thus the supplier relation with Harley Davidson also became a crucial factor for the overall success of the process. The supplier selection process was done by the organization after a complete evaluation of the supplier’s ability to fulfill the expectation regarding cost, quality and delivery (MATERIAL FORECASTING AND REPLENISHMENT). In the process of implementation of Just in time another factor was considered by Harley Davidson. Harley Davidson realized that the success of the implementation of the process will also depend on the level of the employee involvement and their acceptance of the new program. The participation from all levels of the organization is necessary for the process to be effective. Keeping this factor in mind Harley Davidson set guidelines for the process of employee involvement, which aimed at promoting the mutual relationship of the management and the employees and encouraged employees to undergo the training regarding the process and come up with their new set of creative ideas and suggestions. Benefits out of JIT: The implementation of JIT brought substantial benefit to Harley Davidson. Just in time along with the employee involvement process improved the quality and productivity and proved economical for the organization. Through the incorporation of the Just in Time process, the overall lead time in the production reduced and also helped in decreasing the number of defects in the production process which ultimately helped in reducing their overall cost for the organization. Harley Davidson achieved a continuous production process within a short period of time. The concept of the Just in Time also enabled the engineers to improve other methods in production process at a faster rate. A subsequent increase in inventory turnover was also attained by Harley Davidson because of the Just in Time. The introduction of Just in Time also helped Harley Davidson to analyze the market demand and the needs of the customers and produce accordingly, thus reducing the threat of a product being obsolete. The reduction in the waste associated with the production process decreased the unnecessary cost of storage and maintenance which also contributed in the overall decrease of the cost of the production. Just in Time also prevented Harley Davidson in fixing a high proportion of its working capital towards the stock as Just in Time involves the ordering of stock only when required. Moreover the competitive position of Harley Davidson was attained in the market and the overall sales in the market increased significantly. The Road Ahead: The overall growth of Harley Davidson was hampered yet again in the period of 2008. The organization failed to reach the estimated sales quota and the sales figure declined considerably in comparison to the previous year. In order to revive the situation, Harley Davidson can align the various operational strategies. It can review the operation of the Just in Time and investigate whether the Just in Time implemented by the organization is being maintained properly. The effectiveness of the supplier and the commitment of the employees also need to be studied in this respect. Other than the focus on the Just in Time, Harley Davidson should also consider other aspects in order to improve the overall sales. The organization needs to review the marketing strategy and analyze the features in motorcycle demanded by the customers. The overall economic condition also needs to be considered in forecasting the annual sales of the organization. The organization should also consider a comparison between the technology and the management strategy with the other organization in the same line of business so that it can understand the shortfalls. The thorough analysis of every aspect of Harley Davidson will enable them to identify the problem and devise a solution. However the organization should not deviate from the use of Just in Time. References MATERIAL FORECASTING AND REPLENISHMENT, h-dsn, 1999, April 29, 2011 from: http://www.h-dsn.com/genbus/PublicDocServlet?docID=40&docExt=pdf Read More