Free US shipping on all items! Please call Fred Thomas with any questions: 207 415 3746

Some concrete ideas for a bicycle industry Reformation

How to fix this?

The pandemic ruthlessly exposed the bicycle industry’s dependency on the global supply chain and the weaknesses and vulnerabilities which are encapsulated by N+1 Thought. Professionals and observers have had plenty of time to reflect on how to improve the health of the industry and hopefully avoid the situation that exists today (weak demand, excess inventory, price discounting) from happening again. The only suggestion I have heard about so far is the idea of introducing technology that allows manufacturers and retailers to better communicate with each other about market demand. To me that seems like using a band aid to fix a broken collar bone. 

Climate change is a thing

More fundamental changes are required because the world in which the global supply chain evolved has changed. Climate change represents an existential and measurable threat to humanity. Things have reached a point where governments are beginning to introduce regulatory requirements and industrial policy that provides incentives to reduce emissions produced by the global supply chain. When hurricanes and wildfires destroy cities and towns, governments take notice and act. And when your house gets flattened by tornado in December or flooded in October, climate change becomes something real.

The two most terrifying words: Taiwan Blockade

Meanwhile, China has evolved from a passive supplier of manufactured goods to an economic superpower with regional and global ambitions. The two most terrifying words for anyone in the bicycle industry is “Taiwan Blockade”. So long as the Chinese Communist Party is around, the risk that China’s regional ambitions come to a head in the form of a low grade military confrontation over Taiwan are real. 

Live in the Now. Plan for the Future

So why not start planning for these risks now? The pandemic has demonstrated that there is room for improvement and the timing for structural change could not be any better. I have identified a few changes that I believe would over time improve the efficiency and competitiveness of the  bicycle industry. The bicycle companies that adopt all or some of them are the ones that are going withstand the next shock better than the rest.

Increase domestic production: This will shorten lead times, increase management control and when produced in an electrified facility, reduce greenhouse gas emissions. Domestic production will also create jobs and insulate the industry from future shocks to the supply chain (COVID 28, Taiwan Blockade).

Operate an integrated deproduction division: This will allow a bicycle company to  repurpose or liquidate old inventory, take back End of Life bicycles from existing consumers and develop trade in programs. Using repurposed components will also allow manufacturers to meet mandated emission requirements. 

Retire the model year: This will reduce emissions and waste, encourage innovation and more accurately match production capacity with market demand. The retirement of the model year convention is long overdue.  

Retire A Bike for Every Price: This will make selection for the consumer simpler, allocate production resources more efficiently and reduce waste. 

Customer assembly required: This will lower shipping and storage expenses, increase customer control of  costs and specification selection and create customer connection with retailers.  

Leave a comment

Please note, comments must be approved before they are published