During the Coronavirus pandemic, bicycle manufacturers ordered so many components from their suppliers that they could no longer keep up. The bicycle industry is still feeling the effects of this. E-Bike manufacturer FLYER is using its experience to make its own supply-chain network more transparent and resilient.
More and more people are using bicycles, not just in cities, but also in rural areas, and traveling longer stretches with them. The reason for this is the runaway success of e-bikes. One out of every two bicycles now sold in Germany has an electric motor. For years, one could scarcely purchase one of these high-end bikes. The reason for this was the pandemic. Because during the entire coronavirus period, companies in the industry like the Swiss e-bike manufacturer FLYER had huge problems with their supply chain networks. “We often felt like we were riding on a roller coaster,” remembers Chief Operating Officer Marco Furter.
Up to a 24-month delivery time for a gearshift
Although demand had already been steadily growing before Covid, it hit “like a bolt of lightning” at the beginning of the pandemic. Furter says, “Sports were suddenly front and center. Everyone wanted to be outside in the fresh air.” But the manufacturers’ delight over their full order books quickly faded. “The suppliers were inundated with global orders and delivery times skyrocketed.” For example, the delivery time for an e- bike frame was 12 months, up to 24 months for gearshifts. Fearing that they wouldn’t be able to keep up with demand, dealers had ordered a much larger number of e-bikes and manufacturers ordered more components than needed from the suppliers. This led to supply bottlenecks and sharply rising prices for e-bikes.
Now, delivery times are slowly swinging back toward normalcy, but the industry is still experiencing aftershocks from the pandemic boom: dealer warehouses are full, models from numerous years are lined up next to one another for sale. Because, after ordering in vain during the pandemic, the dealers and manufacturers then had to take delivery once everything became available again. “We should have planned more carefully and in a more structures way, everyone knew that you can’t ride the wace forever, but not one wanted to descend too early,” says Marco Furter, looking back.
We should have planned more carefully and in a more structured way. Everyone knew that you can‘t ride the wave forever, but no one wanted to descend too early.Marco Furter
Cief Operating Officer, Flyer AG
Automobile manufacturers as an example: generations instead of annual models
Flyer has drawn specific conclusions from the experience gained during the past few years. Together with Staufen.Inova, the manufacturer has begun to optimize its supply chain network. For example, FLYER has gotten rid of its annual models. COO Furter says, “In the bike industry, it has always been customary to bring out new models each year. We are now following the example of the automotive industry more closely and offer so-called generational models, which are on the market for several years and have differing lifecycles.”
Bike component suppliers are primarily located in Taiwan, China, and Vietnam. There is a noticeable lack of related know-how in Europe. Together with a frame manufacturer, FLYER is planning a project in Europe. Through reshoring, the manufacturer hopes to save 6 to 8 weeks on future manufacturing and create more resilience in the supply chain network.
The business model of the manufacturer was also adapted: “make to order” became a hybrid solution with “make to stock” portions, based on a systematic sales & operations planning approach. Monthly inspections ensure coordinated and uniform planning for the next 18 months. “For this, both the situation in our own assembly departments and the delivery performance of the suppliers are analyzed very precisely,” says Thomas Spiess, Senior Manager at Staufen.Inova. Instead of going by gut feeling, market information and data from forecasts are now used to decide which models and configurations are pushed and how to optimally synchronize the phasing in and phasing out of models. The newly established product lifecycle management also provides an overview of the next 36 months. “In the past, our planning horizon was relatively unstructured. Now, we take a structured approach, even to long-term decisions, and consider where we are headed with FLYER and how we reach this goal,” says FLYER-COO Furter. The bike surplus in stores and warehouses is expected to have eased by 2025, at the latest.
Flyer is a Swiss manufacturer of e-bikes, headquartered in Huttwil (Canton of Bern). In Switzerland, Flyer is the market leader for e-bikes. Each year, the company sells between 70,000 and 90,000 e-bikes in Europe, about half of these in Germany.
E-Bikes per day
Request the English Magazine now as a digital or print version
YOU MIGHT ALSO BE INTERESTED IN
AI in the supply chain network
Decentralized growth led to problems in the supply chain network at ABICOR BINZEL: the service quality and margin declined. The company utilizes a software to dismantle existing data silos and restructure data operations. This also benefits ABICOR BINZEL in the current multi-crisis. In addition, the cutting and welding torch manufacturer utilizes artificial intelligence in sales planning.Read more