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