Loftware Plays Huge Part in Helping Global Icon Harley-Davidson Sustain
The first, and perhaps last, time anyone played fast and loose with the Harley Davidson brand was probably in 1903. That's the year William S. Harley, 23, and Arthur Davidson opened their 10' by 15' ‘factory – a wooden shed – and someone, legend has it, crudely scrawled the words ‘Harley-Davidson Motor Company' on the door. Since then and continuing today, the brand has meant everything to the company in everything it does. If you believe, as most do, that brand name vigilance and financial results go hand in hand, then Harley-Davidson's obsession has paid off handsomely. The company is not only a brand name icon throughout the world, but the company is a financial treasure.For proof that the Company keeps brand vigilance front and center today, you need look no further than its web site landing page. There, Harley-Davidson clearly states at the top of the page: "… our principal objectives are to grow value and further strengthen the brand.” To validate that this strategy has been been associated with spectacular growth and profitability, consider this: Harley-Davidson has delivered 20 consecutive years of record revenues and earnings. In 2004, shareholders realized a total return of 28.6% and a five year total return of 93.1%. In 2005, based on year end results just released in January, the growth continued as Harley-Davidson reported total revenues of $5.34 billion and net income of $959.6 million, up over 2004 across the board. Or look at it this way… a hundred bucks invested in 1986 in the S&P 500 would be worth about $535 today. By contrast, that same amount invested in Harley-Davidson would be worth $18,810. Harley-Davidson, by any measure, brand or financial, is a tremendous success story.
Just how far will Harley-Davidson go to protect and enhance its brand image and reputation around the world? How far will it go to make sure it maintains total control of its product information on its labels? How about all the way from its headquarters in Milwaukee, Wisconsin, to a warehouse in Belgium it doesn't own, operate or directly control. This story goes there because a few years ago, the European Union mandated a set of new product labeling rules and regulations. Labels, for example, needed to be in the language of the region in which a product would be sold. And while a lot of big U.S.-based companies may have given the issue over to their various European-based local distributors or 3rd party logistics partners, Harley Davidson saw it as an opportunity and to safeguard its all-important brand and to maintain the kind of total data control that has made the Company an American icon and a financial legend.
Harley-Davidson might have had a better reason than most to take only a passing interest in the EU labeling compliance issue. Their parts and accessories in Europe are managed by Caterpillar Logistics Services. If the name sounds familiar, it's probably because it is a subsidiary of Caterpillar, Inc. – a $30 billion company in its own right. Formed in 1987 to provide worldwide and world-class logistics services to other companies, Caterpillar Logistics Services today serves more than 65 client companies. Harley-Davidson is one of them. Specifically, out of Belgium, Caterpillar Logistics Services distributes Harley-Davidson parts throughout the Europe Union countries on behalf of the United States' only major motorcycle manufacturer.
To appreciate what Harley-Davidson did in reaction to this change however, it's important to know how big a role spare and replacement parts and accessories play in Harley-Davidson's overall operation? In 2006, Harley-Davidson expects to ship and sell between 348,000 and 352,000 motorcycles around the world. While about 80% of total company revenue will stem from this, parts and accessories will contribute approximately 16% of top line revenue. But not only are parts financially important; as far as the Company is concerned they form another critical component in the total customer experience just like everything else Harley-Davidson sells. It's back to that brand thing again. For Harley-Davidson, there's more at stake than whether or not the right part is available at the right time and place. It comes all the way down to whether or not the needed component carries an appropriately branded label and whether or not Harley-Davidson is providing, as well as capturing, the right customer and part data.
In short, the easy answer might have been to let Caterpillar Logistics more or less independently handle product re-labeling at the point of distribution in Belgium. After all, like a lot of companies in its class, Harley-Davidson manufactures its products at multiple sites and ships its components in various assortments to global distribution points. Obviously, in the manufacturing cycle, it isn't always known where a specific part or accessory may travel in the world. But Harley-Davidson didn't see it that way. They see a proven linkage between brand image and label quality and they have a long history of success driven by maintaining control over the data and content of their product labels.
Thus began a two-year strategic initiative by Harley-Davidson that would ultimately involve more than 30 internal and external experts. Their quest: find a way to integrate worldwide labeling requirements and output with the Company's centralized, Milwaukee-based SAP enterprise system in a way that would give headquarters direct control over label data and content and enable label printing on demand over the web to places like Belgium.
For this initiative, Harley-Davidson's search for a solution eventually led it to Loftware, Inc. which in turn contacted Seattle, Washington-based Pragmatyxs, a long time Loftware partner which became a key subcontractor on this assignment. Founded in 1995 by Paul Van Hout, Pragmatyxs specializes in helping its clients drive their success through the integration and implementation of product labeling, bar coding and related product and material tracking solutions - to meet their unique business needs. Due to this involvement, after a variety of off-the-shelf products weren't able to provide the seamless connectivity the Company wanted to achieve between its Harley-Davidson Enterprise Application Integration team and a web-based solution capable of handling SAP requests, the Loftware Print Server (LPS) solution became the obvious choice. Problem solved.
The Loftware Print Server is a server-based software solution for managing and processing barcode label and RFID ‘Smart Label' requests from corporate applications. An enterprise-class solution, LPS 8.4 is a highly-scalable and fault tolerant system designed to handle thousands of requests targeted to hundreds (or thousands) of printers, whether local or remote, with all of the appropriate queuing, status, and recovery features expected in advanced enterprise systems. Key to its leading market status is the product's seamless integration of Department of Defense (DOD) and EPC specifications via universal interfaces for HF, UHF, and GEN 2 RFID whether printing smart labels or encoding RFID tags.
Ask anyone who knows about these things and they'll readily tell you the SAP enterprise solution is not a trivial software product. But according to Paul Van Hout, in less than 4 months after the introduction of the Loftware LPS puzzle piece, the project was completed by a Harley-Davidson project manager, Cat Logistics, the Loftware/Pragmatyxs team and business specialists in the Harley-Davidson Parts and Accessories department. Van Hout singles out Cat Logistics and the Harley-Davidson enterprise integration team for special notice for their significant role in integrating SAP with the Loftware labeling solution. Today, Harley-Davidson is actually printing labels over the net from its Wisconsin-based data center to the Caterpillar Logistics warehouse in Belgium.
This effort speaks to the passion of a Company that is recognized around the world as a brand admired by young and old alike. Lots of companies speak to this or otherwise aspire to this kind of global recognition. But Harley-Davidson not only says it, but goes the extra mile to achieve things in support of its stated goals. Again, a brief passage from their web site, may provide the best final insight into the drive to seek the best product labeling system at a foreign 3rd party warehouse an ocean away: ‘Harley-Davidson's success will continue to be driven by the power of the brand; mutually beneficial relationships; a seasoned management team supported by an empowered workforce; and a robust worldwide motorcycle market.”