from mass production to mass customization: the case of the national industrial bicycle company of...
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FROM MASS PRODUCTION TO MASS CUSTOMIZATION: THE CASE OF THE
NATIONAL INDUSTRIAL BICYCLE COMPANY OF JAPAN
Group Members:
Syed Zaki Hassan
Syed Swaleh Ayaz
Syeda Tooba Saleem
Syeda Aiman Ahmed
Talha Bin Irfan
IntroductionNBIC is Located in Osaka, Japan.
It began to manufacture & sell bicycles in 1952.
Introduction
NBIC is Japan’s second largest manufacturer of bicycles and one of Japan’s premier mass customization firms.
NBIC is also a mass producer of bicycles, deriving over 90% of its sales revenues from mass production (MP).
NBIC has two factories located next to each other:
oMass production factory
oMass-custom factory
Introduction• Produces bicycles under three different brand names:
Panasonic - high quality, high-priced sports and fashion bicycles (top of the line)
National – Simple bicycle for daily use.
Hikari - basic transportation bicycles from home to work
• High-end Panasonic bicycles are produced in both the MP and MC factories
MP factory employs more line workers
MC factory employs best skilled workers
COMPETITORS :
NBIC’s Shift to Mass Customization
MC idea originated after NBIC’s president visited a famous department store in Osaka and noticed that women could custom order dresses which were delivered in 2 weeks.
Despite opposition, MC factory was fully operational 7 months after department store visit.
The need of this idea occurs because in japan, the bicycle industry was maturing rapidly & to gain market share it’s a high time to rethink about its strategy.
The company wanted to customize bicycles to individual specifications & for this reason too , they devised the firm’s approach to “MC”.
Production Process at MC Factory
“POS” Layout Factory
Panasonic Ordering SystemNIBC’s Distribution System
Advantages of MC Factory at NBIC
MC workers train MP workers, improving MP processes
Innovation at MC firm adopted by MP firm3-D automated measuring machine software for CAM systems robots for painting
Lot sizes in MP factory have decreased from 50 units to 20 units
Customer feedback through MC process used by MP factory to create new and innovative designs (i.e., “fringe awareness”)
Enjoy first mover advantage: MC = Panasonic
Since Panasonic = MC, Panasonic MP enjoys premium pricing due to brand “image”
Interaction Between MP and MC Factories
Market Share of NIBC
Panasonic Growth
Opportunities: To become the
market leader by strengthen the relationship with their suppliers and third party distributers.
Strengths: all suppliers are near at the drive of
max. 40 min. GPS is attached in Electric bicycles
for the security & safety. No excessive inventory to carry &
low holding cost.
Threats: innovations (new
system, dynamic designs, etc)
New technology in the market.
Weakness: Only distributing by their own
stores
SWOT ANALYSIS
SUPPLY CHAIN STRATEGY NBIC’s Strategies:o The company uses mixed approach as it have mass production &
mass customization.
¤ Mass production:› NBIC is pursuing the low-cost strategy by using it’s different
product lines. MAKE TO STOCK
¤ Mass customization:› NBIC is pursuing the produce-to-order approach by having 8
millions possible variations in the bicycles for a smaller segment of the market. (differentiation strategy) MAKE TO ORDER
Nbic’s customer service
According to the General Manager of sales at NBIC• We could have made the delivery time shorter, but we wanted
people to feel excited about waiting for something special.
Some creative solutions:• Personalized computer- generated drawing of the bicycle with
thanking note • Three month later another note inquiring about the customer's
satisfaction• Finally, a 'bicycle- birthday' card is sent on first anniversary
of the bicycle