ASQ Milwaukee Section 1202May 21, 2012

Business Process Transformation

at Harley-Davidson

Craig GreenwoodDirector, Business Process Strategy

Topics for Tonight

Business Process Management Defined

Harley-Davidson Business Process Transformation Group Structure

Example of Managing a Process

Answer Your Questions

PlanFunction

Plan

BeginImplement

Function Function

ChangeProcess

ChangeOrg

Plan

ChangeProcess

ChangeOrg

Plan

ChangeProcess

ChangeOrg

Continuous

Improvem

ent

CompleteImplement

CompleteImplement

CompleteImplement

BeginImplement

BeginImplement

• Business processes requirements are not defined before projects begin

• Implementations are costly and do not deliver intended results

•Work is not standardized and improvements are not transferred to other business units

• Continuous improvement in one function can sub-optimize a downstream function

• Opportunities for transformational change are minimal

Issues:

Our History

• To standardize work across functions and business units• To connect internal suppliers and customers in an end-to-end business process• To build a template for ERP implementation across businesses• To deliver high quality implementations cost effectively which deliver business objectives

Function Function Function

Business Process

Plan DeliverPrepare

• Align functions to create a world-class customer

experience• Rapidly deliver new products and services• Respond to the changing market and business

environment • Build transparency into how the business operates• Increase organizational flexibility

Continuous ImprovementWhy Did We Do This? Benefits

Improve Processes

Standardize Processes Develop Metrics

Align Organization

Where we are headed

Aspects of Business Process Management (BPM)

Harley-Davidson’s Process Transformation

BUSINESSES(Business Unit, Region, focused on P&L’s & Markets)Business units own the results

FUNCTIONS(Departments, Centers of Excellence)Functions own executing the process

Business Units owncustomers and profitability

Functions own the people and cost centers

From this …

Global Process Management: A 3rd Dimension in Management

BUSINESSES(Business Unit, Region, focused on P&L’s & Markets)Business units own the results

FUNCTIONS(Departments, Centers of Excellence)Functions own executing The process

PROCESSES(Source, Make, Fulfill, etc.)

Process owners own the process

WORK

Business Units owncustomers and profitability

Functions own the people and cost centers

Process Owners ownwork designs, flow and integration (including managing the white space)

To this …

Provide strategic alignment and prioritization of overarching global processes for standardization and improvement

Lead the development of the Enterprise Capabilities Roadmap (i.e. ERP, PLM, HDDS) in alignment with Company priorities

Define, standardize and improve global processes Prepare business units for implementation Lead and execute ERP initiatives Continuously improve our capabilities and processes for

implementation

Harley-Davidson Business Process Transformation Group Purpose

We provide leadership in process thinking and deliver robust end-to-end global business solutions. Our employees engage our stakeholders to ensure standardized work is planned, designed, and implemented with operational silence.

Harley-Davidson Business Process Transformation Group Mission

• We are responsible for Process Ownership in the following areas:

• Sales and Operations Planning

• Demand Chain Processes– Plan, Source, Make, Deliver

• Data Management

• Global Pricing

• Data Management

• Enterprise Continuous Improvement

More than a “systems” implementationAll Work Centered Around

Integrating the “Four Gears”

New Structure to Support Process Transformation

BPTGGeneral Manager

(Reports to President/COO)

PLANStrategic Vision

PREPARESource/Deliver/

Data

DELIVERImplement

CIContinuous

Improvement

Change ManagementChange Management / Training / Communication

Business Process Transformation Group

Purpose:• Develop and manage the process of mapping the company’s

strategies to major business processes (e.g. Supply Chain, Sales, Finance) and identify a sequence of projects aimed at developing or enhancing the set of capabilities to deliver the strategies.

Areas of Focus: Manage the Enterprise Business Capabilities (EBC) Roadmap process Facilitate the governance process to deliver the EBC Roadmap Provide process ownership for the enterprise process framework

Plan FunctionBPTG

General Manager

PLAN PREPARE DELIVER CI

Change Management

Purpose:• Identify and develop the future state Processes, Data, and

People Skills aligned with Enabling Technologies to deliver or advance the capabilities identified in the EBC Roadmap.

Areas of Focus: Establish global process ownership and governance to drive process

standardization and alignment across regions, business units and functions

Facilitate decision making with Executive Business Process Owners

Ensure the processes, data and people aspects are prepared before the systems work begins

Prepare Function

BPTGGeneral Manager

PLAN PREPAREDELIVER CI

Change Management

Purpose:• Specify, develop and deploy the future-state processes

and information technology specified in a prior Prepare project.

Areas of Focus: Complete detailed design of business and data processes

aligned with enabling technologies.

Lead deployment teams to ensure organizational readiness

Provide oversight of testing processes

Launch and support new business processes

Deliver Function

BPTGGeneral Manager

PLAN PREPARE DELIVER CI

Change Management

Purpose of a Centralized CI Department: Establish common thinking, integration, tools and evaluation to

drive a sustainable CI culture.

Areas of Focus: Provide a foundation for standardized work (ISO/QMS)

Provide support to Global Process Owners & HDMC prioritized strategic initiatives

Embedded support in HDMC SG&A functions to support

projects and drive the CI Culture

Provide CI assessments and action plans

Knowledge management and Six Sigma training

Continuous Improvement Function

BPTGGeneral Manager

PLAN PREPARE DELIVER CI

Change Management

Purpose:

Prepare our people for the change through a comprehensive change

management plan that moves them up the change curve from

awareness to understanding to adoption to ownership.

Areas of Focus:

Change Management

End User Training

Communication

Stakeholders:

Leadership, End Users (people impacted by change) and Project Team Members

Change Management Function

BPTGGeneral Manager

PLAN PREPARE EXECUTE CI

Change Management

Sales & Operations Planning(S&OP) Process

Example

Managing a Process

S&OP Definition and Key Concepts

S&OP is a decision-making process that balances demand and supply and integrates financial and operations plans

• The purpose of S&OP is:– To meet business objectives

– Set/steer the company game plan

– Ensure tactics align with strategy

– Make tough decisions

– Analyze business performance

• Process is not an event or computer program • Gets agreement on sales and production plans• Evaluates whether production rates satisfies sales rate

Demand-side

Supply-side

Fin

ance

Goal: A feasible plan. Bottom-up focus. Wants to minimize risk and disruptionForecast definition: The demand plan

Su

pp

ly

Ch

ain

Operations

Goal: Factory optimization, improve costs and minimize demand uncertainty

Forecast definition: Manufacturing plan

Sales and Marketing

Goal: Maximize revenue & market share, wants guaranteed product availability

Forecast definition: Sales plan

Goal: Make the financial budget. Tops-down Focus. Desires control and wants predictability of operations.Forecast definition: The budget

Balancing Supply and Demand

S&OP Process Management

• Old approach: Had us looking at our jobs in silos• New approach: Encourages a holistic view (e.g., How

are you impacting internal customers and external customers?)

• Managing a process means we need to work horizontally, west to east, manage sideways…

• Process managers understand how all their job activities, in their process, fit together and interconnect with other processes to ultimately serve the customer

• S&OP is a great example of managing the entire process including the “white space”

S&OP ‘White Space’

• The white space is the handoff or connection points in a process

• White space is the area where all too often quality suffers, time slips, costs go up and customer value gets damaged

• S&OP is the glue that keeps accountability and quality in the process, especially in the white space

• S&OP white space examples:– Manage the hand off of the forecast between Sales and

Manufacturing– Facilitate the creation of a common S&OP dashboard for North

American Sales and International– Tie the entire process together to produce an operations

schedule that supports Dealer orders

The Bottom Line …

Business Process Transformation comes to

the table with a bias

toward finding integrated solutions

with common processes

that will make the company

—not just a specific function—

more effective overall.

What questions do you have?