Lean increases productivity and profits at Harley Davidson’s York plant

An article in the Wall Street Journal (September 21, 2012) describes the transformation of Harley Davidson’s plant in York, PA, from 41 buildings to 1, with workforce cut by 50 %, using 10 % temporary labor but with an operating profit margin of 16 % now vs 12.5 % in 2009. Production is linked directly to sales and is ramped up or down flexibly. Job classifications are now 5 instead of the 62 earlier, thus providing for a wider range of skills for each worker. Do the changes in Harley’s York plant suggest that flexibility and its ability to match supply and demand will be a key capability for the future ? How much of this change requires product redesign to enable part commonality and to anticipate manufacturing costs for designs ? The report also cites the use of robots and information capture at earlier stages to synchronize later manufacturing steps – is this a case of swapping capital for labor, given the low interest rates, to improve profitability ?

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About aviyer2010

Professor
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