Harly Davidson Case Study

Harley Davidson Inc.

Management 322

Companyўs Overview

In 1903 William Harley and Arthur Davidson made the first Harley-Davidson motorcycle available to the public. It was built in a small wooden shed with the words “Harley-Davidson Motor Company” written on the door. The next year, in 1904, C.H. Lang opened the first Harley-Davidson dealership in Chicago, selling one of the first 3 Harleyўs ever made. In 1906 the company opened a new factory, in Milwaukee, Wisconsin. The next year, in 1907 the company doubled its factory space. Also in 1907 the Harley Davidson Motor Company was incorporated, with the stock being divided among the 4 owners, including William and Walter Davidson (Arthurўs brothers). By 1920 Harley Davidson is recognized as the largest motorcycle manufacturer in the world, supported by over 2,000 dealers in 67 countries. In 1953, one of Harley Davidsonўs competitors, Hendee Manufacturing, which produced an Indian motorcycle line, goes out of business. For the next 46 years Harley Davidson is the only American manufacturer of heavyweight motorcycles.

In 1912 Harley Davidson built a six store building on Juneau Avenue in downtown Milwaukee. This building would become the main offices and factory for Harley Davidson. In 1947, to supplement existing manufacturing facilities Harley Davidson purchased the old A.O. Propeller plant, which the company successively converted from wartime manufacturing into a large machine shop. In 1962, in response to a growing trend of including fiberglass in motorcycle production Harley Davidson purchases a 60% equity share in the Tomahawk Boat manufacturing company. Harley uses the companyўs existing equipment to manufacture its own fiberglass parts, beginning in 1963 with the official opening of the Tomahawk division of the company.

In 1973 Harley Davidson upgraded its production facilities with the opening of a new 400,000 square foot plant in York, Pennsylvania. The companyўs manufacturing operations are now located in York, Tomahawk, and Milwaukee, where the new Capitol Drive factory begins to manufacture engines the same year. Harley Davidsonўs expansion into York continued in 1992, with the opening a new $31 million paint facility to complement the manufacturing facilities already located in the town.

Today Harley Davidsonўs manufacturing base includes those existing plants plus several new plants opened in the late 1990ўs including a distribution center in Franklin, Wisconsin, a development center in Milwaukee, and a manufacturing plant in Kansas City. The manufacturing ability of Harley Davidson was also further enhanced in 1982 by the implementation of the MAN (Materials As Needed) program. Similar to todayўs “Just In Time” inventory management methods the MAN program ensured that parts and raw materials are only built and purchased as they are required. This method helped Harley Davidson drastically reduce its manufacturing costs and improve quality.

In 1909 Harley Davidson developed and marketed the first V-twin powered motorcycle, which would become a staple of the Harley Davidson product until today. The first VTwin was developed in 1909 and boasted a whopping seven horsepower. Since the first V-Twin, Harley Davidson has improved upon the design many times, but the V-Twin engine is still the standard in the companyўs motorcycles. In 1910 Harley introduced its first two-speed rear transmission, but this was quickly replaced by the introduction of the three-speed transmission in 1915. Other important improvements for Harley Davidson motorcycles include the introduction of hydraulic front and rear suspensions in the 1940ўs and 1950ўs, the electric starter in 1964, and Kevlar drive train belts in 1980.

Harley Davidson Motorcycles were used extensively by the United States Military during both World Wars. During 1917 the military purchased one third of all Harley Davidsons manufactured that year. To support the militaryўs use of the motorcycles, Harley opens the Quartermasters School in 1917 to teach military mechanics how to maintain the motorcycles. The Quartermasters School later became the Service School. During the second World War Harley Davidson almost completely suspended civilian production of motorcycles in order to focus on military production. By the time the war ended in 1945 nearly 90,000 motorcycles had been produced for military use.

Over the years Harley Davidson motorcycles have become an American icon, with numerous