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 …show more content…
To that end, National bicycle should immediately begin to prepare both its dealer network and its suppliers for the transition. In addition, the Company must begin to develop and implement its own internal process and procedures so that disruptions to production will be kept to a minimum.
It is recommended that National Bicycle’s supplier network be required to purchase facsimile machines to facilitate orders for customized bikes, in addition to the required display samples, fit kits, and other material related to the sale of customized bikes. Such a policy will help ensure the Company meet a reasonable order to delivery time, critical to generating customer demand. While there may be some reluctance to such a large upfront commitment, both the Company and the dealers will be better served in the long run, ensuring the success of the customized bicycle product.
After analyzing National Bicycle’s production facility, the Company should be able to produce 53 bikes per day, within the internal forecast of 250 bikes per week. Given that capacity, National Bicycle should offer an order to delivery time guarantee of 10 days. Such a lead-time should give the Company enough flexibility to respond to the orders while giving sufficient cushion to account for minor disruptions. In addition, the 10-day policy will be viewed as reasonable in the eyes of the consumer, increasing the overall attractiveness of the customized bicycle.
Finally, it recommended that National