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THE NATIONAL BICYCLE INDUSTRIAL COMPONY

IMPLEMENTING THE STRATEGY OF MASS CUSTOMIZATION

Team Members: Abhinav Amresh

Ankit Sushant

Sangram

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Japanese Bicycle Industry It began around 1868

1st time European bicycle introduced in Japan

Japan government modeled their structure after western governments

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Meiji Restoration The Meiji Restoration , also known as

the Meiji Ishin, Revolution or Renewal, was a chain of events that restored imperial rule to Japan in 1868. The Restoration led to enormous changes in Japan's political and social structure, and spanned both the late Edo period (often called Late Tokugawa shogunate) and the beginning of the Meiji Era.

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The Japanase Bicycle industry is in operation since this period

It was done to remove the isolation from the rest of the world

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Arrival of foreign bicycle As foreigners came they brought the cycles

with them For repairs they depended on local

assistance of hunting gun shops Skills acquired to repair guns motivated

shop owners to apply their talent to repair bicycle

This led to production of bicycle modeled after European bicycle

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Bicycle demand grew rapidly in Japan due to strong growth in economy and consumer demand

In 1973 , “Oil Shock” had a major impact on Japan and bicycle production dropped over 18%

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Introduction

NBIC is a 2nd largests manufacturer of bicycle in 1992

Sales close to 20 Billion yen A subsidiary of Japanese industrial Giant

Matsushita Introduced a system Panasonic order System(POS) Gained national & international attention world over Became the envy of competitors

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Marketed bicycles under 3 brands-Panasonic, National & Hikari

Panasonic bicycles for premium consumer which accounts for 20% sales

Began to sell and manufacture bicycle in 1952

NBIC sold its bicycle to 10 sales companies

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Mass production

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Which sold to approximately 9000 retailers which were part of Matsushita group

Regular meeting held to discuss sale trends and manufacturing concern between NBIC and Sales Companies`

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Mass Customization Strategy

Idea introduced by the President of NBIC To custom bicycles the way women

customize their dresses Average unit price for customer was

dropping Average price for sporting bikes were

increasing but the segment was not growing

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Mass Customization Objective NBIC had two objectives – Wanting to double their amount of high value

added products Wanted to devise a system of production and

delivery to differentiate them from competitors In June 1987 they unveiled a strategy in bicycle

industry called ‘Panasonic Ordering System’

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Panasonic Ordering System

Order process- customer orders a high end bicycle to a POS equipped retailer

Notes the requirement by taking measurement and gauging machine

Customer selects color, seat, model type and other features

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Panasonic Order System

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POS Form

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After filling the form dealer sends the information to control room of custom made factory

From there it goes to firm host computer to register and control customer order specification

Host computer assigns a unique bar code level

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Requirements are accessed through bar code level by line workers

Displayed through a CRT terminal at each station

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Manufacturing Process Foundation of POS lies in design and

manufacturing capabilities of NBIC Exclusively built machines for POS Development work carried out by firm own

design and process engineer with assistance from parent company

Software built internally by NBIC engineer

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Production system begins when CAD system located in control scans the bar code level to access customer information

A blue print of bicycle is made in 3 minutes Frame and Front Fork Production-involves cutting of

tubes that form the frame of bicycle Quality Check- complete frame and fork production

is put on a 3D Automatic Measuring Machine

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Checks the actual measurements And corrects the variations if detected any Painting-prevents the early rusting of frame

and improve the surface for paint Then transferred to a preliminary room for

15 mins to be automatically painted by a robot

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Robot receives information through barcode label from host computer

NBIC is the 1st company to introduce robot in painting process in bicycle

After this two skilled workers gives the final touches using electrostatic spray guns

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Labeling & Engraving Process-printing or engraving customer name or any specification.

Done using a silk screen process The frame is ready for final assembly after

this

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Final assembly & Shipping- mating of frame with wheels , chains, gears , brakes and other equipments.

During this Derailleur & Rotation adjustment of bearing section are done

Entire manufacturing of one customized bicycle required 150 minutes

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A year after POS company introduced PICS (Panasonic Individual Customer System)

To offer custom made bicycle to overseas customer.

Delivery time was increased from 2 weeks to 3 weeks in this system

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Marketing & Distribution Appropriate pricing and extensive

communication Guranteed 2 weeks time delivery To make consumers exited about it Under POS factory was given responsibility

to communicate to customers

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Response to POS Competitor copy their system Company like General Motor visits and

study their operation Extensive Media Coverage

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Thank you