OPM National Bicycle Company D1 Section1

8/10/2019 OPM National Bicycle Company D1 Section1

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Case analysis

of


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Mass

Customization

Mass customization allows firms to produce products their

customers want. This approach, make-to-order, brings many benefits to

firms in terms of cost and profit because of lower

inventory levels, maximum sales, elimination of material

waste, flexible production and, most of all, customersatisfaction.


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Company Overview

Subsidiary of Japanese industrial giant Matsushita

NBIC began to manufacture and sell bicycles in 1952

In 1987, introduced Panasonic Order System(POS) to

manufacture custom-madebicycles

Japanssecond largest manufacturer of bicycles in 1992

Marketed under three different brand names- Panasonic,

National and Hikari


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The entire process

1. Order Process

2. Manufacturing Process

Frame and Front fork production

Quality Check

Painting

Labeling and Engraving process

Final assembly and Shipping3. Marketing and Distribution


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Manufacturing Process

Step 1: Frame and Front fork

production

Computer assisted tube cutting,

front triangle assembly andslittingand reamingmachines

Time taken to cut, braze and

assemble the frame was about

25mins


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Completed frame and fork are

placed on a 3D automaticmeasuring machine designed by

the firms parent company

engineers

Less than 1 min

Step 2: Quality Check


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Immersed in special solution to

clean the frame Cleaning process takes about 10 to

15 min

NBIC was the 1st to introduce arobot in the painting process inbicycles

Hard-to-reach areas painted by 2skilled workers

Step 3: Cleaning and Painting


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A skilled worker using a silk

screen process or using a nameengraving machine

Step 4: Labelling and Engraving


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Fixing different components to the

frame. Performed in any one of the 3

main assembly stations and tookabout 30 mins

The entire manufacturing andassembly time required tocomplete a single order wasapprox. 150 mins

Step 5: Final assembly and Shipping


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Significant trends demonstrated by the Japanese

Bicycle industry in the late 1980s

Increase in production till 1990

Decrease in exports

Increase in imports

Increase in production of light cycles, mountain

bikers, track racing vehicles, adults tricycles

Decrease in production of sports cycles, mini cycles,

roadsters


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Key Factors to succeed in the Bicycle

Industry

Innovation

Compete in labor intensive segments1. Move the production to South East Asian

countries

2. Joint ventures with parts suppliersTaiwanand China

Target the right segment of customers


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Strategy adopted by NBIC Mass

Customization

Panasonic Ordering System1. Customer service

2. Appropriate pricing

3. On time delivery

4. Extensive communication5. Dealership selection

Panasonic Individual Customer Systemoverseas markets


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Impact of POS in NBIC

Employed state-of-the-art techniques to manufacture

custom-madehigh quality crafted bicycles within 2weeks of the customersorder

Was able to double the high value added products

sold by accommodating the individual needs of the

customer Clearly differentiated its high-end Panasonic brand

from competitorsproducts


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Benefits of Mass customization

Substantially reduce unwanted work-in-process

inventory Introduce products more rapidly and hence be more

responsive to market trends

Refine existing engineering and manufacturing

capabilities and develop new abilities that promotegreater strategic flexibility


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Observations

Firms that pursue both mass-customization and

mass-production approaches simultaneously will tendto outperform

First-mover advantage was critical for success

A careful blending of computer aided manufacturing

technology and highly skilled labour can provide aviable approach to building capabilities


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Future Expectations of NBIC

Development of Aggressive export strategy

Skilled labor for mass production factory

The firm will market only highend brand

Panasonic and Custom-shop to increase its

revenue Firm increases the size of the custom-market

segment


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Recommendations to MD

Do not turn Mass- production factory into

Custom-shop Use of less expensive bicycle parts from overseas

Customized bicycles should be positioned as a

high-value Niche Market


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THANK YOU !!

OPM National Bicycle Company D1 Section1

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