Company Chronicles: Big Things, Small Packages

Harlan Corporation, like many companies, grew from the vision of its founder. Harlan's culture and values are a reflection of that vision and the defi ning challenges in the company's history. Harlan Global consists of two different operations, Harlan Tractor and Harlan OEM and has been certified to the latest ISO standard (ISO 9001:2000) since January 2001.

Harlan Tractor designs, manufactures and supplies towing tractors for airports, military bases, industrial factories and amusement parks, manufacturing all parts of the vehicles except the engines and tires. Vehicles and spare parts that are supplied in over 81 countries have been primarily sourced or manufactured in China over the last 20 years.

FOUNDER'S ROOTS

Jim Kaplan, Harlan's founder, grew up in Sioux City Iowa, where his father owned and operated a scrap yard. At age 11, Jim had already built his fi rst motor vehicle from scrap parts.

After earning his International Business degree from the University of Miami, Jim was accepted into the marine's pilot training program and ranked first in his class through the entire training. He served as captain for three years while living in Japan, Florida and California, where one of his duties included purchasing spare parts.

EARLY HISTORY OF HARLAN In 1958, Kaplan founded Harlan Corporation to rent and rebuild lift trucks. While repairing these lift trucks, Jim analyzed the causes of component failure and found that high failure parts were not available. So he redesigned the parts, developed sources for new designs and bought the parts to repair his customers' lift trucks. This drive to reengineer components to improve reliability and reduce costs remains at the heart of Harlan's operations.

Jim was selling parts all over the world, developing lifelong friendships in over 70 countries, with both customers and suppliers. In 1968, a Venezuelan customer asked Kaplan to make towing tractors. Jim went out, bought a Model E Clark, and reengineered it - Harlan had all of the required parts in surplus inventory. Since they only required the development and production of the frame to prepare for final assembly, the first 25 tractors took two months to design and produce.

Harlan had an entrepreneurial bias toward action. Jim took on projects, and through his personal intervention, accomplished things overnight that larger companies would have pondered for months. It was an exciting place with lots of energy. Harlan was an early adopter of computer technology, having implemented a computer-based perpetual inventory control system by the early 70's. By the early 80's however, there were signs that the business had outgrown its roots. The company needed a more defi ned structure and organization to enable effective delegation.

By 1984, Harlan had successfully bid on and started deliveries for government contracts, which contributed to the expansion of production capacity throughout the next ten years. The company grew from ten tractors a month to 90 tractors a month with both government and commercial business growth, Harlan's future was looking bright.

TRANSITION PERIOD

In 1989, Jamie Kaplan, who had started and operated Harlan Automotive Parts, joined Harlan as President when Jim Sr. suffered a brief illness. Jamie began his tenure by upgrading the computer systems. In 1993, he launched the development of the Low Profile Tractor and initiated a global marketing effort that led to growing worldwide sales of this new tractor. The new tractor was designed around proven components, including the engine, transmission, drive axle, steering gear and steer axle. Many options were made standard, the goal was to set a new standard for driver comfort and equipment reliability. Today, the Low Profile Tractor is Harlan's highest volume product.

It was in 1985 that Harlan began development of its supplier base and conducting business in China. During this time, Harlan has opened a sourcing office in Nanjing, China and a production factory and sourcing offi ce in Nantong, China. Harlan OEM now has the ability to market to other equipment manufacturing companies by offering its services and expertise in cost reduction of the customer's components by sourcing them in China.

In 1991 Harlan adopted a strategy to become an OEM parts supplier to material handling and agricultural equipment manufacturers and to abandon the will-fit parts business. The strategy has been enormously successful, to the point where Harlan's long-time competitor, Clark Equipment, has become its biggest customer. Consisting of two business units, the OEM Parts Division and the Tractor Division, Harlan has now become an expert at machining parts and controlling outside vendors to manufacture parts.

BREAKOUT PERIOD

1995 overwhelmed Harlan's infrastructure. The company could not effectively execute the new products and business. Financial results, which had been erratic, were consistently poor. Deliveries were late, inventories were bloated, and product quality was not meeting Harlan's high standards. Jim and Jamie Kaplan had come to a "fork in the road." Either shrink the business to make it smaller, more manageable and more profi table or bring in an outside executive to establish the infrastructure needed to solve the performance issues and continue growing. In November of 1995 they brought John Revere into the Harlan family to lead the development of Harlan's next period.

Over the next three years, each functional area of the business was improved. The first priority was quality. Harlan always supported its product in the field, but at a very high warranty cost. During 1996, Harlan established a process for the development of a new part or supplier and made certain that parts were fully quali- fied before they are used in production or distribution and also stabilized the tractor design, focusing its design capability on improving reliability and quality. Harlan also set up a new tractor synchronous flow production process. The result of this quality initiative was a 98-percent reduction in post assembly process defects and a 96-percent drop in warranty costs.

In 1997, Harlan established the tractor Master Production Schedule, introduced forecasting for independent demand (replacement) items and setup planning parameters, such as lead-time and lot size, on all parts. It took eight months to get all the planning information to reach a high level of integrity in the production, inventory and control system. Parts shortages have been effectively eliminated, while inventory has been reduced.

Harlan's people were beginning to assert themselves in the late 90's as they developed two new products, the Hybrid Diesel/Electric Tractor and the All Purpose Vehicle. These New Product Development projects were initiated to meet specific customer orders. Again, Harlan started by defining a process that included detailed specifi cations, concept design, design reviews, component testing, system testing, manufacturing process development, first article buy off and more. They also used this as an opportunity to implement Pro-E, a virtual reality design system, which enabled the actual assembly of component parts in the computer before building the first production unit. Design errors and lead-time were minimized, production rework was virtually eliminated and, most importantly, Harlan was able to meet the design specifications in record time and ship a quality product on time.

CURRENT FOCUS

We have now arrived in the 21st century and Harlan Global has created an elite team of personnel. Standing at the forefront of operations is Harlan's new Vice President Sales, Marketing and Customer Service John V. Moore. Moore heads a new class after Harlan shuffled its roster adding several key industry professionals. In doing so, they are able to give customers a more consistent and reliable product and continue to improve services, quality and customer support.

Always on the cutting edge, Harlan's design team has introduced the environment friendly low profile electric tractor. With a new AC powered engine, maintenance is all but eliminated. Its ability to stay charged longer and sleek new design has become the talk of the industry.

Harlan is also in the process of setting up a third company in Nantong, China to assemble Harlan towing tractors, giving Harlan the ability to support its customer's expansion into China and secure some of the China market. They will also assemble other equipment manufacturer's products in this factory.

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