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.
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.
EARLY HISTORY OF HARLAN
In 1962 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
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.
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.
Harlan’s executive team now consisted of two people: Jim Kaplan, Chairman, 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, 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.
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.