Major Topic at Taipei Show: Bringing Production Back To Europe
APELDOORN, the Netherlands – It is expected to be one of the main discussed topics at the Taipei International Cycle Show; the initiatives for creating more supply chain flexibility by bringing production back to Europe. These initiatives were announced at Eurobike 2014. Since they have has their effect. Even more than expected.
What happened since that memorable meeting at Eurobike 2014, is explained by Accell Group’s Chief Operations Officer Jeroen Snijders Blok in an interview published in Bike Europe’s Taipei Cycle preview (January/February, 2016) edition. Here is a summary of that interview.
More than only Bike Valley Portugal
According to Accell Group’s Chief Operations Officer, ”Even more is happening than expected and faster too. Look at all the companies that are investing in production in Europe. And that’s not only at Bike Valley Portugal with the alloy frame production. There’s much more going on. Accell Group is investing in production in Europe. Pon is investing, such as in the new Gazelle facility. Orbea, ZEG, Decathlon, Trelock, DT Swiss – the list is getting longer and longer. There’s definitely not only talk and planning going on. Some big money is invested. It’ also striking that you no longer hear about companies shifting to Asia. What you (do) hear is companies investing for the long term and not only in Eastern Europe, but in almost all European regions, even in Germany. Nowadays we consider what we can robotize in bike production, which is also a trend reversal. The awareness that we have to get to more supply chain flexibility; that we have to increase our speed to market, has sunk in.
“From our supply partners in the Far East however, less is happening than expected. But I realize that for parts makers in Taiwan and/or China investing in a base in Europe is a fundamental issue when taking into account culture differences, language barriers, staff relocation, etcetera. It is probably out of their comfort zone.”
Aluminum frame production in EU
Snijders Blok affirms that the aluminum frame production now being set-up in Portugal as well as other initiatives will not be sufficient to cater to the demand from the industry in Europe. On this he says, “There’s room for much more when taking the annual bicycle production in Europe into account. That currently is at a level of about 11 million units annually. Some 6 million units of that annual total production is equipped with aluminum frames. Looking at the current happenings in what is to turn into frame producing facilities, we can expect that some 1.5 million will be produced in Europe. That’s only 25% of what is needed. That 1.5 million production includes special frames – for instance for mid-motor e-bikes, for race and sports bikes, as well as small series production. This alloy frame production is not restricted to take place in Europe. Turkey or Tunisia for instance are also suitable production locations.”
Far East partners
When asked what benefits will higher supply chain flexibility and increased speed to market is to bring the Far East partners of the European industry, the Accell COO answers, “Increasing the speed to market of our products will become essential in the coming years when taking consumer behavior into account. Meeting consumer demand is what it is all about. Not where your factory is located. In view of that, lead times must come down; from 26 to 13 weeks and eventually to 8 weeks. Our partners in the Far East and Europe have to meet this challenge.”
Other options to meet demands
Snijders Blok explains further that the European industry supply partners in Asia have other options to meet the demand of an 8 week lead time. He presents KMC’s European HQ and warehouse as a prime example of how to meet that challenge. He says, “KMC not only meets our lead-time demands but also offer us tailored service with chains cut to specific lengths or having it on a roll.”
Current status on creating more supply chain flexibility
On What the current status is with regard to creating more supply chain flexibility, Snijders Blok says, “We are making progress throughout Europe. Next to that I get positive feedback from bigger as well as smaller suppliers from Asia. There’s an understanding for what we are aiming at; they want to know more about it and are open for discussions. They understand our motives and our goal which is to get to a lead time of 8 weeks by 2020. As Accell Group we have our vision on the total supply chain which contains more elements than just bringing production closer to our markets. As you know we appointed Jeroen Both as Chief Supply Chain Officer in April 2015. He is also at Taipei Cycle to share this vision with our suppliers”
For reading the complete interview you can pick up a complimentary copy of Bike Europe’s January/February, 2016 edition at the Bike Europe booth; P0007 on the 4th floor, or click here to read Bike Europe on-line.