PL's Forum Chicago Dispatch 2: Harley Davidson Revs Up Supplier Management and Procurement Skills

Earlier this week, Procurement Leaders' Chicago Forum managed to attract a panel of high-profile CPOs: Dr. Volker Pyrtek, CPO, Deutsche Telecom; Tim McBride, CPO, MSFT; Michelle Kumbier, VP and GM, Materials Management and Corporate Quality, Harley Davidson Motor Company; and Johnathon Baker, VP Global Procurement, Starbucks Coffee Company. Panel discussions are usually up and down and I would have liked a bit more debate, but the panelists were surprisingly open to answering questions about their organizations. It was good to see the topics quickly move away from the areas of basic cost reduction and sourcing and progress into more current topics, including supplier management and supply risk. Harley's Michelle Kumbier shared that their company's oldest supplier relationship dates back to 1929 and they've worked hard to engage their supply base in a collaborative manner counter to the confrontational style of US automotive OEMs.

Kumbier also offered her view that supplier management and engagement requires a process designed around having strategic suppliers choose you as preferred partner to do business with. She was not just revving her procurement engine in saying this. According to others I've spoken with, Harley has a solid reputation among suppliers and a surprisingly large domestic supplier base relative to other industrial and automotive suppliers sourcing similar parts. I suppose one could argue this makes sense on the same grounds as supplier diversity makes sense when it comes to selling into minority groups -- Harley customers definitely trend towards the "buy American" philosophy. Perhaps Harley even represents a case where customers will pay a premium for domestically sourced content.

Aside from actively engaging suppliers in a collaborative manner to drive innovation and savings, Kumbier also shared her views on the importance of attracting the right individuals into procurement management. At Harley Davidson, all procurement staff at or above the management level have production experience. In fact, "they must have been involved in manufacturing before getting into management," Kumbier stated. Clearly, this focus on attracting engineering types into procurement at Harley Davidson is paying off in overall performance. A comparative study we did of Harley a few years ago suggested that they were in the top 20% of automotive, truck and related vehicle companies in overall procurement and supply chain sophistication. On a Geoffrey Moore adoption curve, we considered them an early adopter, along with DaimlerChrysler, Dana, Delphi, Ford, Goodyear, Johnson Controls, Metaldyne, Bosch and TRW, among others.

Jason Busch

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