Harley-Davidson's Just-in-Time (JIT) Journey

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Case Details:

Case Code : OPER098
Case Length : 14 Pages
Period : 1981- 2011
Organization : Harley-Davidson Motor Company
Pub Date : 2011
Teaching Note :Not Available
Countries : US
Industry : Automobiles

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction cont...

In the 1990s, the company was credited with achieving a remarkable turnaround by adopting various operational strategies including Just-in-time (JIT) manufacturing. Harley-Davidson faced fierce competition from the Japanese companies with the entry of Suzuki⁵ , Yamaha⁶ , Kawasaki⁷ , and Honda⁸ into the American market in the 1960s. The Japanese manufacturers were able to provide better quality bikes at a relatively lower price. Reacting to this, Harley-Davidson filed a dumping case against the Japanese competitors, claiming that they were dumping the bikes in the US at unfair prices. Though Harley-Davidson lost the case against these companies, in the process it got to understand the different processes and practices of these companies because of which

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their operating costs were 30% less than its own. Harley-Davidson found that there were three most important practices of Japanese companies which differentiated their production process from that of others: JIT manufacturing, employee involvement, and the use of statistical process control. Harley-Davidson started implementing all these Japanese practices to face the competition. The adoption of these practices was not so easy for the company. The initial reaction of its suppliers to its implementation of JIT manufacturing was disappointing. Walter S. Lutz Jr. president of Signicast (one of Harley-Davidson's major suppliers), said, "We figured it (JIT) would never work."

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5] The Japanese auto manufacturer Suzuki Motor Corporation was founded in the 1920s as a loom manufacturing company. It started producing motorcycles in the early 1960s.
6] Yamaha Motor Co. was set up in 1955. Its first motorcycle was the YA-1 (2 stroke, 125cc engine).
7] Japan-based Kawasaki Heavy Industries was established in 1896. As of 2006, apart from its home country, it was present in the UK, the US, Canada, the EU, South America, Israel, South Africa, Iran, Indonesia, Jordan, Korea, China, and Australia
8] The Japan-based Honda Motor Company Ltd. is one of the leading manufacturers of automobiles and power products and the largest manufacturer of two-wheelers in the world. Globally renowned for its light and utilitarian motorcycles, Honda had over 77 production facilities in 40 countries and sold its products in over 150 countries, as of 2010.

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