When it comes to mastering supply chains,
Harley-Davidson—the iconic, Milwaukee-based motorcycle company—is among the best.

BRIAN SMITH, Director of Logistics and Indirect Procurement
at Harley-Davidson, serves on the Executive Advisory Board of the Grainger Center for Supply Chain Management.

Smith knows first hand all that goes into the supply chain structure—design and engineering, market demand, sourcing raw materials and components, efficient production, streamlined distribution, and more.

He let us hop on board to explore how the company brings its Softail™ model to market. Along the way, he provided insights into the challenges and opportunities facing today’s supply chain leaders.

Design and Engineering

“Product design and engineering are at the heart of what we offer. We know there is risk when designers are not collaborating with suppliers to ensure feasibility of design and materials, so we make sure we involve suppliers in the design and engineering process.”

Production

“We run our inventory on a just-in-time model, often with only 8 to10 hours of inventory on hand. That means a lack of supply can shut down our assembly line. When we source parts from abroad, we risk longer lead times and customs delays.

If someone orders a Harley-Davidson® motorcycle with a customized paint job, the sheet metal (tank and fenders) are sent from York, Pennsylvania to Wisconsin. After the parts are painted, they are shipped back to York. This adds complexity to our supply chain in terms of inventory, handling, quality, and cost."

Sourcing

“At Harley-Davidson we need to think of the customer when sourcing parts. The customer wants the Harley-Davidson® brand with American production and domestic content. We only source globally when it is appropriate for our products and for our brand.”

Distribution

“Duties and tariffs levied in foreign countries can make the product uncompetitively priced for local markets. One way we mitigate that problem is through postponement strategies. For example, we ship the product in component kits and delay final assembly until they reach Brazil. Doing final assembly in Brazil results in lower import duties. Using this strategy for Brazil reduces duties by nearly 85 percent.”

Marketing and Customers

“Harley-Davidson executives attend hundreds of customer events each year
to connect directly with customers.

One of our challenges is balancing supply chain competitiveness with the customers’ perception of the Harley-Davidson® brand. We stand for American production and domestic content, especially for attributes that make a Harley a Harley, such as the sound of the engine and the look of the chrome.”