Shimano Comments on Delivery Problems
OSAKA, Japan (December 17th) – Shimano Japan issued today a detailed statement about their delivery situation which is currently creating havoc among bike makers around the globe. Bike Europe presents you here the complete statement made by Hiro Hirata, Vice President, Sales Bicycle Components Division: Dear Customer, Thank you very much for your support for […]
OSAKA, Japan (December 17th) – Shimano Japan issued today a detailed statement about their delivery situation which is currently creating havoc among bike makers around the globe. Bike Europe presents you here the complete statement made by Hiro Hirata, Vice President, Sales Bicycle Components Division:
Thank you very much for your support for Shimano during this difficult season. Because of the questions we have received from you, the media coverage and the rumors that began to circulate, we would like to communicate with you directly about the background of the current delivery situation and our plans for the current and future orders.
1. Delivery Situation
Starting the beginning of 2003 we received strong orders, especially for high-end components. We projected a big increase in demand for some new products introduced (XTR, XT, Dura Ace), but we could not foresee the magnitude of the overall market development. For example, the worldwide orders we received for Ultegra components for the shipment in the first half of 2004 have been 5 times larger than the previous year, and the orders for Deore components have been 3 times more than its usual volume. The orders for the new Dura Ace group have been 2.5 times as big as its normal volume for the whole season. The orders for the new XT group are now expected to be 1.5 times as big as the volume of a regular season.
Unfortunately, the speed of the incoming orders is much faster than what we expected and arranged for production, but we tried to increase our capacity to match the increase in demands and to comply with the delivery schedule requested by our customers. Overall, we managed to increase the capacity by 20% to 25% in that short period, but a further increase has not been possible as our factories are already running 7 days a week in several shifts.
We expect the situation to improve drastically by the beginning of the 2004 sales season at the latest because the actual demands and market reactions will become clear by then.
2. Future Planning
In order to improve the delivery performance for the next season and to assure the initial shipment of new products as well as subsequent supplies, we have taken the following steps:
a. Rescheduling of Delivery Dates
The initial delivery timing of some of the new groups of components has been split over several months, in order to have a better resource allocation and smoother factory transitions. However, samples will be sent to you in June in order to allow a better pre-planning at your side.
b. Earlier Start for Internal Processes & Development
The development phase of our new products has started earlier and the related deadlines for design and R&D are considerably earlier than in the previous years. We believe that this will allow a more accurate factory adjustment and a better production quantity allocation and preparation.
c. Information about Discontinued Products
For the first time in years, we announced at a very early stage what products would be discontinued and the last date they could be ordered. We believe that this will allows us a more efficient utilization of our capacity.
d. Increased Production Capacity of Critical Products
We increased the production capacity for some critical products in order to secure their timely delivery. At the same time, we will create larger inventories of continuing products before we start the production of new models that could potentially create delays. This has already been done for the XT disc-brake so that we can catch up with the increased demands and solve the existing delivery delays within this month.
e. Forecast & Planning
We will make every effort to accurately forecast the monthly demand for each individual product. However, please understand that we have to rely on the information we receive from you in order to accomplish this. So we would kindly ask you to discuss your market and production expectations with the relevant Shimano sales representatives. We truly appreciate your patience and cooperation with Shimano. We are also grateful for your confidence in Shimano. We are committed to offering you much-improved services in the coming model year.