Harley-Davidson Productivity Triad

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Three things crucial to Harley-Davidson's survival and turnaround in the 1980s were employee involvement, just-in-time production and allowing workers to control quality for themselves. In 1981 Harley-Davidson's central problem wasn't a lack of demand for its bikes, but the way they were made; in other words, inefficiently. expensively and of poor quality. The answer was to use Japanese production methods, of which the Productivity Triadd was Harley-Davidson's interpretation:


  1. Employee Involvement: There was a wealth of knowledge and experience on the shop-floor in Milwaukee and York, but it was being ignored. This came to a head in the AMF days, when production was forced up despite what those on the shop-floor said. Quality circles had already been tried in a half-hearted fashion, but this time they worked, because they (and other employee involvement techniques) had the commitment of management, and employees realized that they really were being heard and could have a genuine influence.
  2. Just-In-Time (JIT) Production: Traditionally, like much US industry at the time. Harley-Davidson had relied on large batch production of both certain components and particular models of bikes. This meant holding large stocks of raw materials and parts, sometimes for months until they were needed, which tied up a great deal of capital and slowed down the production process. Instead, JIT delivered only those parts to the assembly line which were needed to build each bike (see Jelly Bean System). Meanwhile, departments were reorganized to enable them to rapidly switch between making small batches of different parts. rather than large batches. In the ten years after it was introduced. Harley-Davidson's inventory was reduced by 75 per cent, scrap and rework was down by 68 per cent, and productivity up by 50 per cent.
  3. Statistical Operator Control: A much simpler idea than it sounds. Employees were given the training to monitor the quality of their own work. Once they were proficient in this, problems could be rectified at source as soon as they arose because they were detected immediately by the person doing the job, rather than by a quality inspector further down the line after 500 faulty parts had been made or (worse) by no one at all.


These three methods were all inter-related, and it is doubtful that any one of them could have worked without the other two. Together, they transformed the efficiency and effectiveness of Harley-Davidson's production process and turned the company around.