Cannondale's Supply Chain is Built for Speed

With a 30-year history, Cannondale is a pioneer in the engineering and manufacturing of high-end bicycles, apparel, footwear and accessories for independent dealers and distributors in more than 66 countries. Cannondale designs, develops and produces bicycles at its factory in Bedford, Penn. and operates subsidiaries in Holland, Switzerland, Japan and Australia.

As a leading custom bicycle manufacturer with an extensive and impressive customer list (including 17 athletes that competed at the 2008 Beijing Olympic Games, professional race teams and Tour de France competitors) meeting customer demands and expectations is a mission critical to the success of its business.

"Cannondale has a reputation for delivering a superior product for bicycle enthusiasts of all levels -- from novice riders enjoying a Sunday ride through the park, to the most demanding riders competing in World competitions," says Mike Dower, vice president of IT at Cannondale.


The Environment

Cannondale produces more than 100 different bicycle models annually, 60 percent of which are newly-introduced lines. Working in a cyclical business that is impacted by market and weather conditions, coupled with the international nature of its business, Cannondale is faced with a highly-complex and volatile consumer demand picture. On top of volatile demand and an ever-changing product portfolio, Cannondale's supply chain encompasses all corners of the world with global manufacturing, assembly and sales/distribution sites. 

"Cannondale's mix of make-to-order and make-to-stock models requires us to manage a range of product batch sizes, sometimes with one-of-a-kind orders," continues Dower. "A typical bicycle requires a 150-day lead time with a four-week manufacturing window, and some bicycles have more than 250 parts in their bills of materials (BOM). Cannondale has more than 1 million BOMs and manages more than 200,000 individual parts."

Constrained by specialty vendors with expanding lead times and limited production capability, quickly delivering complex and custom products to meet customers' high expectations can pose significant challenges to Cannondale.

Managing parts availability and variable customer demand requires flexibility in Cannondale's manufacturing operations. As such, the company required a solution with global visibility on all plant inventory levels and supply schedules to better manage changes in product and customer demand.


The Challenge

Cannondale operates a legacy material requirements planning system (MRPII) that produces weekly reports. Due to the dynamics of the environment, by Tuesday afternoon, Monday's reports were so far out of sync, rendering them useless. The supply chain team was being forced to substitute parts to meet demand, causing a cascading parts flow problem. Cannondale's primary objective was to find a solution to improve the accuracy of its parts flow, support the company's need for flexibility and operate within the confines of its existing business systems, all while not breaking the bank.


The Solution

Cannondale turned to Kinaxis for its integrated demand-supply planning, monitoring and collaborative response capabilities. Using a tool called RapidResponse, users could do a full MRP explosion in minutes, compared to the eight hours it had taken previously. Users throughout the organization can access accurate and detailed supply chain information in an easy-to-use spreadsheet interface embedded with MRP analytics and automatically populated live data feeds from Cannondale's MRPII system.

Initially brought in as a MRP support tool, RapidResponse is now used to solve multiple problems and address a number of needs, including sales reporting, forecasting, sending daily inventory availability, and feeding production schedule information to the MRP and order processing systems. Users include buyers, planners, master schedulers, sourcers, product managers, customer service, finance and management. Supply chain participants across sites and functional groups can now model MRP data to instantly simulate, share and score "what-if" scenarios to evaluate and select the appropriate action alternatives in response to changing supply and demand conditions.

Cannondale now receives automatic, incremental data imports multiple times each day and a full import weekly from its MRP system. All users receive up-to-date visibility of all sites, bringing tremendous value to Cannondale. In addition, several members of the management team use RapidResponse daily to examine aspects of the company's backlog.

Cannondale now has a monthly sales and operations planning (S&OP) cycle and can compare old forecasts versus new forecasts in an offline environment and to evaluate the constraints of the new plan.


The Results

Today, Cannondale is able to respond to customer orders quickly, significantly reduce its inventory and avoid the subsequent negative financial implications. Cannondale has seen results in higher inventory turns and reduction in safety stock, improvement in cycle times and reduction in lead times, more accurate promise dates, and faster and more accurate analysis.

Cannondale initially installed RapidResponse in 1997 at its U.S. operations. Since then, the company's European sites and sales office in Japan have been brought on board. Cannondale is in the final stages of its implementation of the latest version, which has improved data update times from approximately 20 minutes to two minutes.

"Considering the cost, complexity and time invested in designing and building custom bicycles, having a solution that makes the process as efficient and responsive as possible provides Cannondale a considerable competitive advantage and thus, is integral to its day-to-day operations," Dower concludes.