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ASQ Milwaukee Section 1202 May 21, 2012

ASQ Milwaukee Section 1202 May 21, 2012. Business Process Transformation at Harley-Davidson. Craig Greenwood Director, Business Process Strategy. Topics for Tonight. Business Process Management Defined Harley-Davidson Business Process Transformation Group Structure

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ASQ Milwaukee Section 1202 May 21, 2012

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  1. ASQ Milwaukee Section 1202May 21, 2012 Business Process Transformation at Harley-Davidson Craig GreenwoodDirector, Business Process Strategy

  2. Topics for Tonight Business Process Management Defined Harley-Davidson Business Process Transformation Group Structure Example of Managing a Process Answer Your Questions

  3. Our History Plan Function Function Function Issues: Plan Plan Plan • 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 Begin Implement Begin Implement Begin Implement Continuous Improvement Change Process Change Process Change Process Change Org Change Org Change Org Complete Implement Complete Implement Complete Implement

  4. Where we are headed Function Function Function Business Process Plan Standardize Processes Deliver Prepare Develop Metrics Improve Processes Align Organization Continuous Improvement Benefits Why Did We Do This? • 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 • 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

  5. Aspects of Business Process Management (BPM)

  6. Harley-Davidson’s Process Transformation From this … BUSINESSES (Business Unit, Region, focused on P&L’s & Markets) Business units own the results Business Units own customers and profitability FUNCTIONS (Departments, Centers of Excellence) Functions own executing the process Functions own the people and cost centers

  7. Global Process Management: A 3rd Dimension in Management To this … BUSINESSES (Business Unit, Region, focused on P&L’s & Markets) Business units own the results Business Units own customers and profitability Functions own the people and cost centers FUNCTIONS (Departments, Centers of Excellence) Functions own executing The process WORK Process Owners own work designs, flow and integration (including managing the white space) PROCESSES (Source, Make, Fulfill, etc.) Process owners own the process

  8. Harley-Davidson Business Process Transformation Group Purpose • 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

  9. 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

  10. More than a “systems” implementationAll Work Centered Around Integrating the “Four Gears”

  11. New Structure to Support Process Transformation BPTGGeneral Manager(Reports to President/COO) PLAN Strategic Vision PREPARE Source/Deliver/Data DELIVER Implement CI ContinuousImprovement Change Management Change Management / Training / Communication Business Process Transformation Group

  12. 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 BPTGGeneral Manager PLAN PREPARE DELIVER CI Change Management Plan Function

  13. Purpose: Identify and develop the future state Processes, Data, and PeopleSkills 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 BPTGGeneral Manager PLAN PREPARE DELIVER CI Change Management Prepare Function

  14. 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 BPTGGeneral Manager PLAN PREPARE DELIVER CI Change Management Deliver Function

  15. 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 BPTGGeneral Manager PLAN PREPARE DELIVER CI Change Management Continuous Improvement Function

  16. 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 BPTGGeneral Manager PLAN PREPARE EXECUTE CI Change Management Change Management Function

  17. Sales & Operations Planning(S&OP) Process Example Managing a Process

  18. 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

  19. Balancing Supply and Demand Goal: Make the financial budget. Tops-down Focus. Desires control and wants predictability of operations. Forecast definition: The budget Finance Goal: Maximize revenue & market share, wants guaranteed product availability Forecast definition: Sales plan Goal: Factory optimization, improve costs and minimize demand uncertainty Forecast definition: Manufacturing plan Sales and Marketing Operations Demand-side Supply-side Supply Chain Goal: A feasible plan. Bottom-up focus. Wants to minimize risk and disruption Forecast definition: The demand plan

  20. 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”

  21. 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

  22. The Bottom Line … Business Process Transformation comes to the table with a bias toward finding integrated solutionswith common processes that will make the company—not just a specific function—more effectiveoverall.

  23. What questions do you have?

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