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

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 Issues: Plan Plan Plan Improvement Continuous
Function
Function
Function
Plan
Issues:
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
Improvement
Continuous
Change
Process
Change
Process
Change
Process
Change
Org
Change
Org
Change
Org
Complete
Implement
Complete
Implement
Complete
Implement

4. Where we are headed Plan Prepare Deliver Continuous Improvement
Function
Function
Function
Business Process
Plan
Standardize Processes
Prepare
Develop Metrics
Deliver
Improve Processes
Align Organization
Continuous Improvement
Why Did We Do This?
Benefits
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 6 6

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 7

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. Harley-Davidson Business Process Transformation Group Mission
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.
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 9

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

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

12. Plan Function Purpose:
BPTG General Manager
PLAN
PREPARE
DELIVER CI
Change Management
Plan Function
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

13. Prepare Function Purpose:
BPTG General Manager
PLAN
PREPARE
DELIVER CI
Change Management
Prepare Function
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

14. Deliver Function Purpose: Areas of Focus:
BPTG General Manager
PLAN
PREPARE
DELIVER CI
Change Management
Deliver Function
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

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

16. Change Management Function
BPTG General Manager
PLAN
PREPARE
EXECUTE CI
Change Management
Change Management Function
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

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

18. S&OP Definition and Key Concepts
Draft
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
Draft 18

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
Lots of competing forces
Finance – wants control and predictability of operations
Sales and Marketing – wants guaranteed product availability
Supply Chain – wants to minimize risk and disruption
Operations – wants to minimize demand uncertainty
Healthy dialogue between stakeholders
Goal: A feasible plan. Bottom-up focus.
Wants to minimize risk and disruption
Forecast definition: The demand plan

20. S&OP Process Management
Draft
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”
Draft 20

21. Draft
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
Draft 21

22. 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.

23. What questions do you have?