Tuesday, October 2, 2012

Harley the new lean machine

Harely Davidson has embraced lean manufacturing techniques. It has consolidated its production buildings into fewer buildings where robots do most of the heavy lifting. The hourly workforce has been reduced to half and many of its workers are now “flexible” workers. Flexible workers come and go as needed. The company does not have to pay severance costs when these workers are let go during slow periods.
These measures have raised the operating profit of the company by a staggering 16%.
Harley has also started cross training its workers which creates a more productive work environment.  As per article in Wall street Journal [1]
“Kim Avila, 49 years old, who has worked here for more than 17 years, said she saw the concessions as the only chance to preserve jobs. The pace of work is faster now, but she said managers and workers have more mutual respect and work together more smoothly. In the paint department, where she works, people used to do the same chore all day but now rotate through several tasks to avoid body strain and boredom. They are encouraged to fix some minor flaws in the finish themselves rather than kicking them to another department.”
Also, the company has started outsourcing the production of some parts such as brackets and screws.  This implies that the company does not have to stock up ahead of peak selling periods and/or forecast popular models and colors.
All of this restructuring will allow Harley to cut costs by $275 million this year(2012-2013) alone.

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