"Technology will play a tremendous role in MRO procurement by reducing leadtimes and transaction costs and providing purchasing with capability to leverage higher volumes," says Albert Keal, director of purchasing operations, powertrain/components and indirect materials, Harley-Davidson Motor Co., Milwaukee, Wis. Still, Keal notes, "There is potential to return to the arm's-length transactional way of doing business—if technology, resources and processes are not well defined and managed properly. It is imperative that technology be used to build and enhance established relationships that continually reinforce and improve the MRO strategy."

Keal speaks from experience: He has spent more than 25 years working in purchasing and materials posts in the automotive and computer industries (he was with Digital Equipment Corp. for more than 17 years).

As the only U.S.-based motorcycle manufacturer, with sales totaling $2.9 billion last year, Harley-Davidson produces heavyweight motorcycles and offers a complete line of parts, accessories, apparel and general merchandise. In 2000, the company won Purchasing Magazine's Medal of Professional Excellence for excellence in supply management.

MRO at Harley-Davidson encompasses all indirect products and service requirements used to support the motorcycle manufacturing operation.

For the buy, Harley-Davidson has developed an indirect materials alliance. Under the initiative, which is called the Harley-Davidson Indirect Materials Alliance (hima), three suppliers —Engman-Taylor Co. Inc., Henkel Chemical Management and Unisource Worldwide—provide the company with a majority of its indirect materials, products and service requirements.

hima is an integral part of the company's materials management strategy. The goal of the alliance is to improve operational integrity, which includes manufacturing uptime and productivity, total lifecycle cost reduction, and end-product quality. Since its inception in late 1999, the initiative has already yielded positive results. Benefits to Harley-Davidson include:

• Onsite representation (24-hour, seven-day accessibility),
• One-stop MRO shopping for customers,
• Increased on-the-floor technical support,
• Reduced supply chain and lifecycle cost,
• Savings through cross-functional involvement, and
• Product standardization.

As Keal sees it, MRO purchasing at Harley-Davidson has gone from an arm's-length transactional process to a total lifecycle supply chain management philosophy. "The relationship between buyer and supplier has evolved into a collaborative arrangement with mutually beneficial goals," he says. "It allows for a more focused, cohesive network of key stakeholders aligned to execute the MRO strategy through shared participation in well-articulated processes."

Long-term cost savings in MRO can be achieved only through alignment between suppliers and the company's materials management strategy, says Keal. "MRO supply chains will have the technical and business performance characteristics capable of effectively supporting long-term business plans," he says. "MRO supply chains must consist of professionals capable of addressing complex business and technical issues with a leadership presence that will produce consistently high achievements." These professionals, he adds, "must integrate and act as an extension of the purchasing operation and of the materials management strategy."