Harley-Davidson Assembly Plant, York, PA
What a privilege of a lifetime to work at the Harley plant! In the 1980s, sales of Harley Davidson motorcycles suffered from the Japanese competition. To improve the quality and rebuild the brand, Harley embarked on a continuous improvement approach modeled after what the Japanese used at Honda and other manufacturers.
The US government imposed tariffs on imported bikes and during this time Harley made numerous improvements. The tariffs were some help, but Harley also helped itself with a number of innovations as well. Much of this is documented in an article in the Motley Fool (https://www.fool.com/investing/general/2016/04/05/33-years-ago-today-tariffs-saved-harley-davidson.aspx).
Quote from The Motley Fool Article
Taking care of business
Ultimately, the RIETI found it was Harley-Davidson’s own initiatives — the modernized factories, the new engines, the better inventory control — that played the biggest role in its turnaround. Indeed, during this time, the number of motorcycles with defective parts Harley produced plunged from around 50% to just 2%.
What the Motley Fool leaves out is the incredible depth of the work that the organization and workers at all levels did to improve their work methods that did not depend on new technology. Jim Lucas was the plant manager. He was dedicated to just-in-time inventory practices (Harley’s name for this was the MAN – material as needed – system.) and statistical process control (SPC) (which Harley named statistical operator control (SOC)) pioneered by Walter Shewhart and promoted by W. Edwards Deming.
I worked at the York assembly plant for the better parts of 3 years. During that time, I taught classes in SPC or SOC with a focus on when to take action on the processes based on the signals shown on the charts workers made. Remember this is the mid-1980s. Workers on an assembly line did not have many devices for collecting data, very little data collection was automated, and for sure every chart was made by hand. One real plus for collecting data and making charts by hand is the personal connection between the process, the data, the worker and the messages. And even better, rarely did they collect data just for the fun of it. What a waste that would have been. All of their data collection was directed to critical characteristics of the motorcycles and the processes that produced them.
Harley loved to give plant tours. These tours were conducted by the workers in the plant. In addition to the production machinery and bikes in various stages of assembly, one could see a sea of bright yellow “stands” the color of vests worn by school crossing guards. Across the entire plant – the 4 quads of the assembly line, the sub processes that fed the main assembly line, the paint area as well as frame forming and paint – workers displayed their data for all to see. They were collecting and analyzing data about the quality characteristics of the parts that were assembled to make bikes. All of the workers attended classes to learn how to make measurements, record the data and update their charts. Could the charts get messy? Of course, but that only added to their value. The messages were there. Anyone could see when issues occurred and how quickly the process was corrected. The emphasis was on keeping the process running well. When this happens, the product quality increases.
Jim Lucas was intent on everyone in the Harley Assembly Plant having training in SPC. The format for each class was 2 5-day sessions with 40 people. When the last 20 people were left, the training manager called and asked, “What can we do? We still have 20 employees untrained, but we cannot afford a class with only 20 people in it.”
“That’s easy,” I replied. “Sell seats to your suppliers.” They did just that. The last class of 40 participants was made up of 20 Harley workers and 20 from various supplier companies. They work in teams – Harley and supplier workers – on projects that involved parts from the suppliers. In so many ways this last class was the best because a number of issues were addressed and resolved, plus the communication between Harley and these suppliers improved.
I sat in on meetings where workers made presentations to the plant manager (Jim Lucas) and the Harley CEO (Vaughn Beals). The pride that front line workers making motorcycles took in their work was apparent for all to see. And to top it off, they did an amazing job of making presentations to their managers.
During this time period, Harley added other work to prevent laying people off. Harley was a union plant; the workers belonged to the United Auto Workers (UAW). The company made rocket engines for Beech Aircraft, wiring harnesses for IBM mainframe computers and practice bombs for the Navy.
The bomb line illustrated how powerful process improvement could be. Supervisors and line workers on the bomb line attended a SOC class that focused on how to collect and analyze their data. At the end of the class, the supervisors assigned one relevant measure to each person working on the bomb line. For example, the person running the process to form the nose cone of the bomb (the first process) kept track of how many units could have the nose cone formed before he needed to lubricate the cavities. Then he decided to see if he could find a better lubricant that would last longer. After a few tries, he was successful. The result was he could form the nose cone on 10 times as many bombs before lubricating the cavities. The time saved was instrumental in increasing the number of bombs they could produce. Obviously, this first process had to coordinate with the next processes in line and not cause a bottleneck somewhere. Consequently, people who worked on all of the downstream processes kept tabs of their work in a similar manner.
The upshot of the work at Harley during this time period was that many small improvements were made, resulting in a major reduction in defects (nonconformities) and quality issues. Production increased overall, costs went down. When they rebid on the bomb project with the government, they could lower the price without losing money and had no trouble winning the bid.
While the bomb line illustrated how to use SOC when a process has a high volume of units, the rocket engine area was a challenge. Each order was for a small quantity, for example 15 rocket engines. Testing the finished units was not realistic. Once you fired the rocket, it was done. This is destructive testing at its finest. Their approach was to make 1 more unit than the customer ordered. When all rocket engines were completed, the team selected one unit to fire. If that one fired, they shipped the others.
But, what to do when you can’t collect data on the final product? You collect data on the components. For example, in one operation more than 30 angled hole were drilled into the thrust place for each rocket engine. So, the people who worked on the rocket engines measured the angle, diameter and depth of these holes. Measuring the critical characteristics of the individual components was key to analyzing the processes and assuring that the final product would work as expected.
Lastly, employees who worked in the office were not excused from working on their processes. This included all of the sales force, purchasing agents, and the people who worked in accounting. One improvement project was successful in fixing a problem with smudges on copies of documents. Using data collected by the office workers, they discovered a pattern – every sixth page was smudged – and investigated the cause. After proving the root cause, they found a solution and implemented it.
Empowering employees to make improvements in their work can make a huge contribution to profitability, growth and customer satisfaction for any organization. Harley employees demonstrated how this can work during the 1980s.
What contributed to success at Harley?
- An upper management team that and was committed to – and participated in – activities associated with quality and process improvement throughout the organization.
- A dedication to training all employees and then requiring them to use the new techniques.
- Following up to make certain people were using the new techniques regularly and correctly.
- Recognition and celebration of successes – large and small – anywhere in the organization.
Unfortunately, these successes rarely last past the leaders who put theHarm in place. Almost 15 years after I did training, coaching and assisting with implementation of SOC, I returned to work on a specific issue that required some really advanced statistical methods. I found a plant where the entire focus was on making motorcycles – the other products were no longer part of the picture. All data were being collected electronically – no yellow stands – and the production workers did not have charts visible to help guide them in assuring the quality of their work. One worker from the past, Benny who polished chrome parts, was still there. We talked briefly and he said that they no longer used the charts I taught them. He also said that he missed the charts because they could tell him how well his process was working. Empowerment busted!!!