Harley-Davidson’s Operations Management & Productivity

Harley-Davidson 10 strategic decisions of operations management, productivity, decision areas, motorcycle business analysis case study
A Harley-Davidson motorcycle at the Voorschotense Oldtimer Vereniging Show in the Netherlands. Harley-Davidson’s operations management in the 10 strategic decision areas supports optimal productivity. (Photo: Public Domain)

Harley-Davidson’s operations management (OM) ensures that the company maintains effective and efficient business activities to support productivity, business resilience, and competitiveness against Ducati, Honda, Yamaha, and other firms. Harley-Davidson’s managers determine the best options for the 10 strategic decision areas of operations management. These 10 decisions cover the key business areas that involve operations management approaches. To optimize the productivity of its facilities, Harley-Davidson continues to develop its operations management practices to suit evolving business needs. Motorcycle designs are regularly tested to determine the satisfaction of customers’ expectations and regulatory requirements.

This evaluation of Harley-Davidson’s operations management in the 10 strategic decision areas highlights brand image and customers’ needs. This focus helps the company manufacture high-quality motorcycles with a strong brand image. The brand and high-quality products support goal fulfillment in relation to Harley-Davidson’s mission statement and vision statement.

Harley-Davidson’s Operations Management, 10 Decision Areas

1. Design of Goods and Services. Harley-Davidson motorcycles are known for their unique and handcrafted designs. In this strategic decision area of operations management, the company’s objective is to support its brand image based on available resources. The brand image emphasizes motorcycle quality and high-end chopper design, which support the objectives of Harley-Davidson’s generic competitive strategies and intensive growth strategies. Also, the design of goods and services considers the interests of stakeholders in the motorcycle business. For example, product features satisfy customers, and engine designs account for environmental concerns, in support of Harley-Davidson’s corporate social responsibility strategy.

2. Quality Management. The objective in this strategic decision area is to maintain operations management practices to maximize output quality that matches the Harley-Davidson brand image and customers’ expectations. The company has strict quality standards, as well as quality requirements for suppliers to ensure high-quality materials for motorcycles. Quality standards reinforce the competitive advantages shown in the SWOT analysis of Harley-Davidson.

3. Process and Capacity Design. Harley-Davidson’s operations management approach for this strategic decision area involves high quality and new technologies. Optimal production processes are an objective in this decision area. At Harley-Davidson, operations managers automate processes for maximum efficiency in producing motorcycles and related products. Also, the company’s production facilities address demand and cost considerations in the global market.

4. Location Strategy. Most of Harley-Davidson’s authorized dealers are located in city centers. Many of these dealers are involved in deciding the location of the dealerships. Thus, Harley-Davidson’s operations management addresses this strategic decision area through partially decentralized decision-making for dealership locations. In addition, the locations of the company’s warehouses are based on the locations of authorized dealers to optimize the transportation efficiency of Harley-Davidson motorcycles and related products. Decisions in this area of operations management affect the productivity and effectiveness of the distribution strategy in Harley-Davidson’s marketing mix (4P).

5. Layout Design and Strategy. This strategic decision area of operations management is concerned with optimal efficiency in the movement of people, materials, and information. For company-owned facilities like motorcycle production buildings, Harley-Davidson’s operations management approach for this decision area involves traditional models adjusted to suit the facility’s purpose. Also, a standardized set of layout design requirements are implemented for authorized Harley-Davidson dealerships.

6. Job Design and Human Resources. Human resource adequacy and capability are the main concerns in this strategic decision area of operations management. Harley-Davidson uses training programs and a participatory approach that empowers employees. To maximize career opportunities and optimally utilize talent, the motorcycle company’s operations management implements a succession-planning policy where leaders share information about employees’ performance. Success in this area of operations management depends on organizational characteristics. For example, Harley-Davidson’s organizational structure (company structure) determines job descriptions in relation to other areas of the business. On the other hand, Harley-Davidson’s organizational culture (business culture) influences workplace productivity and issues in human resource management.

7. Supply Chain Management. Harley-Davidson maintains a Supplier Diversity policy for making decisions in this area of operations management. This decision area is concerned with optimizing the supply chain for the motorcycle manufacturer’s growth. The company’s policy ensures the optimal productivity and capacity of its supply chain based on the availability of a wide variety of suppliers. Success in this area of operations management depends on how policies and strategies address the bargaining power of suppliers described in the Five Forces analysis of Harley-Davidson. Also, decisions in supply chain management account for supply-related industry and market conditions, such as the trends shown in the PESTLE/PESTEL analysis of Harley-Davidson.

8. Inventory Management. In this strategic decision area, operations managers focus on inventory adequacy and timeliness. Harley-Davidson addresses these objectives through automated inventory monitoring in company-owned facilities. The company also has an online system for orders and requests involving authorized dealers.

9. Scheduling. Harley-Davidson has streamlined schedules for its business activities. In this strategic decision area, operations managers focus on maximizing capacity in short-term and intermediate schedules. The company addresses such a concern through automated schedules for the supply chain and orders involving authorized H-D motorcycle dealers. Traditional operations management approaches are also used for scheduling employees’ activities at Harley-Davidson’s offices.

10. Maintenance. Reliability of processes is the objective in this strategic decision area of operations management. Harley-Davidson’s motorcycle production processes are standardized with redundancy measures. For example, the company coordinates the activities of production facilities, which minimize stockouts by supporting each other during demand peaks. Harley-Davidson also has maintenance teams for buildings and equipment.

Productivity at Harley-Davidson

Harley-Davidson’s operations management approaches are partly aimed at maximizing productivity. Operations managers evaluate productivity levels based on a number of measures or criteria. Some of these productivity measures at Harley-Davidson are as follows:

  1. Revenues per sales employee (H-D Dealership employee productivity)
  2. Supply stockout rate (productivity of Harley-Davidson’s suppliers)
  3. Motorcycles per day (productivity of H-D production facilities)