Page 288 - Electronic Commerce

Business-to-Business Activities: Improving Efficiency and Reducing Costs

In 2000, the company decided to focus its cost reduction and quality improvement efforts
on its information technology infrastructure. Because it had been so successful in working with
its suppliers to reduce manufacturing costs and improve quality, Harley-Davidson wanted to do
the same thing with information technology. By using Internet technologies to share information
throughout the supply chain, the company hoped to find opportunities for efficiencies and cost
reductions at all stages of the process of creating motorcycles.
When the company first talked with its suppliers about its information technology initia- 263
tive, those suppliers noted that each of Harley-Davidson’s main factories used different
invoices, production schedules, and purchasing procedures. The suppliers explained that
this created difficulties for them when they dealt with more than one factory and increased
their cost of doing business with Harley-Davidson. Thus, one of the first things the company
did was to standardize forms and procedures. Then it moved to require all suppliers to use
EDI. For smaller suppliers, the company set up a Web site that had Internet EDI capabili-
ties. The smaller suppliers could simply log in to the Web site and conduct EDI transactions
through their Web browsers.
This Web browser interface grew to become a complete extranet portal called Harley-
Davidson Supply Net. All suppliers now use the portal to consolidate orders, track production
schedule changes, obtain inventory forecasts in real time, and obtain payments for materials
shipped. The portal also allows suppliers to obtain product testing information, part specifica-
tions, and product design drawings.
Key elements in both EDI and the Web portal systems have been bar codes and scanners.
Most of Harley-Davidson’s individual parts and all shipments are bar coded. The bar-code infor-
mation is integrated with the materials tracking, invoicing, and payment information in the sys-
tems and is made available, as appropriate, to suppliers. Harley-Davidson uses bar-code
standards developed by the Automotive Industry Action Group.

Required:
1. Become familiar with RFID technology and its potential uses in Harley-Davidson’s sup-
ply chain using the information presented in this chapter and information you obtain
through the Web Links, your favorite search engine, and your library. In about 200
words, outline the advantages Harley-Davidson might gain by replacing its bar codes
and optical scanner technologies with RFID. Be sure to consider the nature of the com-
pany’s product, which includes rubber and metal parts in oily/greasy environments, as
you draft your answer.
2. In about 100 words, compare and contrast the issues that Walmart and other large retailers
faced when they tried to implement RFID in their supply chains with those that a
manufacturing company such as Harley-Davidson will likely face as it moves into RFID
implementations with its suppliers.
3. When Harley-Davidson implements RFID, it will likely use the technology to help manage
its relationships with its main customers, which are the local dealerships that sell motor-
cycles and use replacement parts in their repair shops. In about 200 words, outline the
issues that will likely arise when Harley-Davidson begins requiring RFID tracking of spare
parts inventories at its dealers.

Copyright 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.