National Bicycle
Executive Summary
As National Bicycle transitions to the production of a customized bicycle, employing a concept of mass customization, the Company must ensure that its supply chain is responsive enough to handle the characteristics of an innovative product. Demand will be highly unpredictable and the final product, with over 2 million options, will also be unpredictable.
Given National Bicycle’s current high level of automation, the transition to the POS system should be smooth. Its current supplier and delivery arraignments will accommodate the product switch.
The final critical factor to the success of the customized bicycle is a business decision: determining how much order lead time to incorporate into the production of the bicycle that will both match the production requirements and capabilities of the Company and also satisfy the demands of the consumer.
After careful analysis of National Bicycle, examining its production capabilities and business goals of the product, a lead-time of 10 days will help the Company achieve its goals. It is long enough to provide the Company some flexibility in production and delivery without straining its resources. And it will meet customer expectations of providing them a unique product in a relatively short time period.
To meet this goal, National Bike will have to amend some of its supply chain, including requiring all dealers to use fax machines to facilitate bicycle orders. In addition, the Company will have to develop a more robust delivery process to ensure the reliable delivery of its bicycles without straining company resources with regular single item deliveries to the Honsha. In addition, the Company should seek better relationships with its suppliers in an effort to mitigate some of the business risk associated with the imperative of having the right parts available.
However, with these slight modifications to its supply chain, National Bicycle should have few difficulties
As National Bicycle transitions to the production of a customized bicycle, employing a concept of mass customization, the Company must ensure that its supply chain is responsive enough to handle the characteristics of an innovative product. Demand will be highly unpredictable and the final product, with over 2 million options, will also be unpredictable.
Given National Bicycle’s current high level of automation, the transition to the POS system should be smooth. Its current supplier and delivery arraignments will accommodate the product switch.
The final critical factor to the success of the customized bicycle is a business decision: determining how much order lead time to incorporate into the production of the bicycle that will both match the production requirements and capabilities of the Company and also satisfy the demands of the consumer.
After careful analysis of National Bicycle, examining its production capabilities and business goals of the product, a lead-time of 10 days will help the Company achieve its goals. It is long enough to provide the Company some flexibility in production and delivery without straining its resources. And it will meet customer expectations of providing them a unique product in a relatively short time period.
To meet this goal, National Bike will have to amend some of its supply chain, including requiring all dealers to use fax machines to facilitate bicycle orders. In addition, the Company will have to develop a more robust delivery process to ensure the reliable delivery of its bicycles without straining company resources with regular single item deliveries to the Honsha. In addition, the Company should seek better relationships with its suppliers in an effort to mitigate some of the business risk associated with the imperative of having the right parts available.
However, with these slight modifications to its supply chain, National Bicycle should have few difficulties