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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 defining challenges in the company’s history.
Founder’s Roots
Jim Kaplan, Harlan’s founder, grew up in Sioux City
Iowa, where his father owned and operated a scrap yard. At the age of 11, Jim built his
first motor vehicle from scrap parts. Jim excelled in everything he did as a child and
took that drive with him to college. He attended the University of Texas and Miami, where
he received his degree in International Business. While attending, he was in the Air Force
ROTC. After graduating from the University of Miami he was accepted into the
marine's pilot training program, and went through the entire training ranked
first in his class. He served as
Captain for three years while living in Japan, Florida, and California, where
one of his many duties included the purchasing responsibility for spare parts.
After leaving the armed forces he met his wife,
Joyce, at the University of Texas and moved to Kansas City, where he acquired, owned, and
operated an eggshell processing plant. Later he rebuilt generator plants and sold them to
Atlas Forklift. He sold this business to Atlas and consulted for them briefly.
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Early History of Harlan
In 1958 Mr. 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. He then went to the Lift Truck OEM and offered to sell
the improved designs. At that time, the Lift Truck OEM was not interested, but later
implemented these design improvements. This drive to reengineer components, to improve
reliability and reduce costs, is at the heart of Harlan's operations today.
Soon, Jim was selling parts all over the world. In the
process, he developed lifelong friendships in over 70 countries, with both customers and
suppliers. Harlan’s key supplier relationships are a strength built over a 35 year
period. During this time, the business was growing rapidly, driven by development of
improved forklift parts for a global market.
In 1968, a customer in Venezuela asked Mr. Kaplan to
make towing tractors. So, Jim went out, bought a Model E Clark, and reengineered it.
Harlan Corp. had all of the required parts in surplus inventory. The first twenty-five
(25) tractors took two months to design and produce, since they only required the
development and production of the frame to prepare for final assembly.
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. The company grew vigorously under Jim’s leadership. 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 defined structure and
organization to enable effective delegation.
Harlan successfully bid on government contracts, which
started deliveries in 1984 and contributed to expansion of production capacity throughout
the next ten years. The company grew from 10 tractors a month to 90 tractors a month
with both government and commercial business growth, Harlan's future was looking
bright.
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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 by upgrading the computer systems. Harlan purchased an AS/400 to replace its aging
System 36 and installed the MAPICS Enterprise Requirements Planning system. 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 during this period that Harlan began development
of its supplier base in China. It was a challenging time, finding and qualifying competent
sources for a broad range of parts. Today, after many years of hard work and the
establishment of a Chinese Alone Venture, we have two offices and seven Chinese employees
managing nearly 50 suppliers. The quality we receive from China today rivals the best in
the world, and brought our parts cost to a competitive level. The development of this important business
capability demanded that Harlan adopt a more disciplined approach. Drawing reviews, part
qualification procedures, source inspection capability, and planning tools which control
material flow more effectively were all required.
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. Most of our will-fit parts business was for Clark brand
forklifts. The strategy has been enormously successful, to the point where our long-time
competitor, Clark Equipment, has become our biggest customer. Today, Harlan consists of
two business units, the OEM Parts Division and the Tractor Division.
We had become experts at machining parts and controlling
outside vendors to manufacture parts for us. The relationships that we had built over 35
years for our own use would now make components for OEM Customers. We marketed this
capability to OEM forklift companies to supply parts we were already manufacturing. We
bought all new machining centers and lathes in 1993 to increase capacity, quality, and
productivity. Harlan reduced costs for OEM customers by $2,000,000 during the past twelve
months alone. By 1995 Harlan was a recognized OEM source.
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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. 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 profitable or bring in an outside executive to establish
the infrastructure needed to solve the performance issues and continue on the growth path.
In November of 1995 they brought John Revere into the Harlan family to lead the
development of Harlan’s next period.
Harlan’s executive team now consisted of three
people: Jim Kaplan, Chairman, John Revere, Chief Executive Officer, and Jamie Kaplan,
President. Jim Kaplan, in addition to his role as Chairman, has played a major role in the
development of the OEM Division and is the primary contact with Clark Equipment.
Jim’s knowledge and experience are also focused on cost reduction and new product
development. Jamie Kaplan provides the leadership for strategy, marketing, and sales for
the Tractor Division. John Revere lead the development of business processes, including
systems, procedures, staffing, and training, as well as management of day-to-day
operations.
Over the next three years, each functional
area of the business was improved. The first priority was quality. We always
supported our product in the field, but at a very high warranty cost. During
1996, we established a process for the development of a new part or supplier. We
made certain that parts were fully qualified before they are used in production or
distribution. We also stabilized the tractor design and focused our design
capability on improving reliability and quality. We also set up a new tractor synchronous
flow production process. The result of this quality initiative is a 98%
reduction in post assembly process defects and a 96% drop in warranty costs.
This, of course, does not include the increased customer goodwill resulting from
high initial delivered quality and improved equipment reliability.
During 1996 the company also focused on engineering and
process documentation, which was required for the quality improvement initiative, and also
for the Manufacturing Resource Planning (MRPII) System. Bill of Material and Routing
accuracy were improved to over 90%. In 1997 we 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. By early 1997 MRP was
being used exclusively to plan the timing and quantity of parts delivery. It took eight
months to get all the planning information to reach a high level of integrity in the
Production and Inventory and Control System. Parts shortages have been effectively
eliminated, while inventory has been reduced.
Harlan’s people were beginning to assert
themselves. 1997 was an even busier year. Harlan developed two new products, the Hybrid
Diesel/Electric Tractor and the All Purpose Vehicle. These New Product Development
(NPD)
projects were initiated to meet specific customer orders. Again we started by defining a
process that included detailed specifications, concept design, design reviews, component
testing, system testing, manufacturing process development, first article buy off, etc. We
also used this as an opportunity to implement Pro-E, a virtual reality design system,
which enabled us to actually assemble the component parts in the computer before building
the first production unit. Design errors and lead-time were minimized because
we were able to order production parts from drawings and avoid producing prototype
hardware to prove out drawings. Production rework was virtually eliminated. Most
importantly, we were able to meet the design specifications in record time and ship a
quality product on time.
Starting in late 1997, Harlan’s people shifted
focus to develop the cost accounting system. In December 1997 cost accounting rolled up
standard costs based on a budget for labor, material overhead, and manufacturing overhead
for the first time. The cost system was refined over the next four months and these new
standards were used to cost inventory, production activity, and sales back to 1996. This
provides the foundation for financial reporting, operating performance management, and
product pricing.
Accounting worked with our public accounting firm for
two years to meet the requirements for unqualified, audited annual financial reports. The
cost system was also a critical success factor to publishing 1997 audited results, an
important step in gaining low cost access to the capital needed to fund rapid growth.
Current Focus
[History]
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We have now arrived in the 21st century and Harlan Corporation
has become ISO 9001 Certified. In doing so, we are able to give our customers a
more consistent and reliable products. As we continue to grow, we continue to
improve our services, quality and customer support.
Always on the cutting edge, Harlan's design team has
introduced the environment friendly HLE (Low Profile Electric Tractor). With its
new AC powered engine, (maintenance is all but eliminated) and its ability to
stay charged longer, along with its sleek new design, it has become the talk of
the industry.
Keeping with the environment friendly theme, Harlan's design
team has also developed a tractor using the Ford ESG 6-4.2 engine. This is a low
emission automotive engine meets EPA regulations for years to come.
During June and July of 1999 Harlan Corporation
installed a
company wide network, which includes global e-mail, an Intranet, an Internet, a
Website, and out bound fax from each desk. The network features seamless intracompany and
intercompany e-mail among employees, suppliers, and customers worldwide over the Internet.
Communications and drawings move to suppliers over the Internet to any point in the world
almost instantly. Quotations and sales information move to customers equally fast. All
this is at a lower cost than traditional methods.
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