High-demand causes Shimano shortages - BikeBiz

High-demand causes Shimano shortages

Hiro Hirata, VP of sales in Shimano's bicycle components division in Japan has written to OE customers, apologising for delays in delivering Ultegra, Deore, Dura Ace and other top-end components. Thanks to a hot summer and a dry autumn in Europe, demand has gone through the roof, especially for road kit. Demand for Ultegra has risen fivefold, said Hirata.
Author:
Publish date:

Here's the full text of the letter:

SHIMANO INC.

77 Oimatsu-cho 3-cho

Sakai Osaka 590 8577

Japan

December 17th, 2003 Dear Customer Thank you very much for your support for Shimano during this difficult season. Because of the questions we have received from you, the media coverage and the rumors that began to circulate, we would like to communicate with you directly about the background of the current delivery situation and our plans for the current and future orders. Delivery Situation

Starting the beginning of 2003 we received strong orders, especially for high-end components. We projected a big increase in demand for some new products introduced (XTR, XT, Dura Ace), but we could not foresee the magnitude of the overall market development. For example, the worldwide orders we received for Ultegra components for the shipment in the first half of 2004 have been 5 times larger than the previous year, and the orders for Deore components have been 3 times more than its usual volume. The orders for the new Dura Ace group have been 2.5 times as big as its normal volume for the whole season. The orders for the new XT group are now expected to be 1.5 times as big as the volume of a regular season. Unfortunately, the speed of the incoming orders is much faster than what we expected and arranged for production, but we tried to increase our capacity to match the increase in demands and to comply with the delivery schedule requested by our customers. Overall, we managed to increase the capacity by 20% to 25% in that short period, but a further increase has not been possible as our factories are already running 7 days a week in several shifts. We expect the situation to improve drastically by the beginning of the 2004 sales season at the latest because the actual demands and market reactions will become clear by then. Future Planning

In order to improve the delivery performance for the next season and to assure the initial shipment of new products as well as subsequent supplies, we have taken the following steps: Rescheduling of Delivery Dates

The initial delivery timing of some of the new groups of components has been split over several months, in order to have a better resource allocation and smoother factory transitions. However, samples will be sent to you in June in order to allow a better pre-planning at your side. Earlier Start for Internal Processes & Development

The development phase of our new products has started earlier and the related deadlines for design and R&D are considerably earlier than in the previous years. We believe that this will allow a more accurate factory adjustment and a better production quantity allocation and preparation. Information about Discontinued Products

For the first time in years, we announced at a very early stage what products would be discontinued and the last date they could be ordered. We believe that this will allows us a more efficient utilization of our capacity. Increased Production Capacity of Critical Products

We increased the production capacity for some critical products in order to secure their timely delivery. At the same time, we will create larger inventories of continuing products before we start the production of new models that could potentially create delays. This has already been done for the XT disc-brake so that we can catch up with the increased demands and solve the existing delivery delays within this month. Forecast & Planning

We will make every effort to accurately forecast the monthly demand for each individual product. However, please understand that we have to rely on the information we receive from you in order to accomplish this. So we would kindly ask you to discuss your market and production expectations with the relevant Shimano sales representatives.

We truly appreciate your patience and cooperation with Shimano. We are also grateful for your confidence in Shimano. We are committed to offering you much-improved services in the coming model year.

Featured Jobs

cycles service promo

Shop Manager/ Head Mechanic

Cycleservice Limited I Sidmouth, East Devon I Salary: £22,000 Plus Share Incentives Available I Date Published Wednesday 30th May 2018

Giant St Paul Logo

Bike Fitter / Sales Person

Giant St Pauls I City of London I Salary: Negotiable Dependent on Experience I Date Published Thursday 21st June 2018

Sigma-Sports

Social Media Executive

Sigma Sports I Hampton Wick, Surrey I £22,000 to £24,000 per year I Date Published Monday 4th June 2018