Innovations at Harley Davidson|Business Strategy|Case Study|Case Studies

Innovations at Harley Davidson

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Case Details:

Case Code : BSTR093
Case Length : 19 Pages
Period : 1903 - 2003
Organization : Harley Davidson Inc.
Pub Date : 2004
Teaching Note :Not Available
Countries : USA
Industry : Automobile

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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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Manufacturing Practices

As mentioned above, prior to the 1980s, H-D was not able to meet its production targets. The company's manufacturing plants were designed to use a batch process flow of materials on the plant floor. As a result materials (parts) were tooled in large batches at different locations in the plant and workers had to make use of forklifts to move the materials around the factory. This resulted in high set up times; consequently, product output rates were very low...

Making the Organization Conducive to Innovation

In the mid 1980s, the management realized that its traditional command-and-control culture did not foster healthy relationships among employees at all levels. Identifying this as a factor that could hamper productivity and innovativeness, the company decided to make the culture more open and participatory. H-D now began interacting more with the employees at the shop floor and this, in turn, aided the management in implementing new practices. The management shared the importance of the company's values with its employees. This way, it was able to instill high moral values in them and emphasize its commitment towards its employees. As a result of the above, H-D was able to develop a harmonious relationship with its worker unions based on trust, respect and communication...

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New Product Development

All the above changes at various levels of the organization laid the ground for innovation in new product development (NPD) as well. H-D believed that NPD was not just about engineering, but a creative process where consistency in approach was critical. The company also believed that technology should be used only to fulfill this creative process...

Innovating for a Total 'Customer Experience'

H-D's formal approach towards NPD through CPPDM methodology enabled it to introduce successful and innovative products consistently. As a result, the company was able to post impressive growth in earnings and revenue between 1986 -2001 (Refer Exhibit VI). In the early 2000s, 80% of H-D sales came from new products (models less than five years old). According to industry observers, the positive results of H-D's innovation philosophy was attributable to the fact that it used technology and engineering to support the processes that aimed at enhancing the overall customer experience. The company worked on the premise that the customer's experience transcended the product. Products were no doubt the core, but H-D sold its customers a total 'H-D riding experience...'

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Exhibit I: Some of the World's Well-Known Corporate Innovators
Exhibit II: The Process and Barriers to Innovation
Exhibit III: New Product Launches at Harley-Davidson
Exhibit IV: The Swirl Model
Exhibit V: Types of Bins
Exhibit VI: Harley-Davidson - Key Statistics (1986-2002)

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