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In mid-1997, Harley Davidson began the initial planning phase of their Supplier Information Link (SiL’K) project; the company’s integrated procurement system that they hoped would support Harley’s new Supply Management Strategies (SMS). The goal of SMS was to ensure “Harley Davidson is provided with the right product, at the right time, with the best quality, for the lowest possible cost.”1 Under Harley’s new SMS, with the aid of the SiL’K project, the company sought to both design a central procurement system and develop their existing suppliers into full-fledged business partners with collocated facilities. This effort required keen attention to maintaining balance in the strategy-system-structure framework, particularly as success of the SiL’K project required changes in all three cores of the framework.
At the onset of the project, Harley had already established a well-balanced and coordinated approach to strategy, structure and system. Harley’s strong strategic core was comprised of a leadership circle made up of senior managers from different departments. Departments themselves were offered a significant amount of autonomy balanced with a prescribed level of overlap among all the departments to make the organization’s flexible edges and discourage information silos while encouraging business-level understanding. Different Information Systems relating to individual departments evolved over the years to promote independence, which resulted in different systems for handling procurement. Both Harley’s non-traditional organizational structure and their adoption of a culture that embraced Information Systems helped their organization be well-positioned to take on the SiL’K project.
Harley Davidson did an outstanding job planning for the transition from the old system to the new one. Their team did not focus merely on the information technology component of the software selection and implementation, but instead made deep investments in seeking buy-in from all stakeholders, establishing a change in thinking about procurement and supplier relations, 1
SiL’K Newsletter 1998, no. 1
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and continually managing expectations. Additionally, they anticipated pitfalls and adhered to Harley Davidson’s “people, process, and technology” approach to change initiatives.
In the Team Formation phase of the SiL’K project, the SiL’K project managers focused on three equally important ideas: ensuring multiple areas of the company were represented, that they found the best person for the job from each department, and that each person tapped would maintain enough of their existing job duties to ensure that the SiL’K team designed a system that met current requirements. All of these three requirements were centered on the idea that without buy-in and understanding from all stakeholders in the project, SiL’K would not succeed. In choosing the best person, while it was vital that the employee was well-versed in the processes of his or her department, it was equally important that the employee was an opinion leader and could sell the project to others in their group.
As Harley Davidson had multiple legacy systems that were customized for procurement process in many areas of the company, mapping the process “As Is” was crucial to defining the scope of the “To Be” end product. SiL’K managers decided to utilize both an enterprise-wide map of their procurement processes and comprehensive stakeholder surveys to gain complete understanding of the commonalities in their current procurement systems. With that, the team was able to move forward and define the system “To Be”. When the SiL’K team moved into the “To Be” step of the project, after reviewing the results from the stakeholder surveys, it was apparent that their current resources were not going to be sufficient to successfully complete their mission. It was then that Harley’s commitment to the project was truly demonstrated, as team members were allowed to dedicate their efforts nearly full-time to the project, and the team was allowed to take needed time to achieve perfection. By the time the team had reached the
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point of choosing a vendor, a year and a half had been invested in the buy-in and planning phases of the project; time that would later prove a wise investment.
The SiL’K team did an excellent job identifying the critical factors necessary to evaluate their vendor finalists. All the factors in the quantitative assessment described in Exhibit 10 of the case are very well aligned with the factors Dickson identified in his seminal work on vendor selection in 1966 (Dickson 1966)2&3. The SiL’K team also did a stellar job ascertaining the factors crucial for qualitative assessment of vendors.
The vendor’s ability to meet quality standards, their ability to maintain established delivery time, and past performance were the most critical factors of the decision. Among these three factors, the first assures that the vendor has a quality product capable of fulfilling Harley’s need. The second demonstrates the reliability of the vendor. The third metric helps provide confidence in the vendor. In case of Harley Davidson, the potential for long term relationship was a prominent factor in vendor selection.
Among the three vendors, we chose Provider 1 among the finalists as the traits of Provider 1 are the most closely aligned with Harley’s needs. There is a great deal of match between Provider 1 (scored highest, 93.4% on the quantitative functionality checklist) and Harley’s requirements. Qualitatively, Provider 1 is superior in all the dimensions critical to Harley: overall functionality, long-term relationship potential, implementation support, training support, compatible architecture, novel thinking, and technical support. The area where Provider 1 is rated lower than its competitors (self-evaluation score, enabling the SMS, web-enabled software, and out of the box fit) are fungible and can be attended to further down the line. 2
3 G.W. Dickson, An analysis of vendor selection systems and decisions, Journal of Purchasing 2 (1966) (1), pp. 5–17.
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Appendix A
Most Important Factors According to Situation (Dickson, 1966)3
Importance Rank 1 2 3 4 5
Case A Paint Quality Warranties Delivery Performance History Price Case B Desks Price Quality Delivery Warranties Performance History
Case C Computers Quality Technical Capability Delivery Production Capacity Case D Art Work Delivery Production Capacity Quality Performance History Performance History Communication System 6
HarleyDavidsonCaseStudy
