Supply chain problems in the bicycle industry
Last year's pandemic left hardly any sector of the economy unaffected, and bicycle manufacturers weren’t spared either. The demand for bikes has continued to rise. In Austria, 496,000 bikes were sold in 2020 – the highest market volume since surveys began. While dealers can be pleased about this, manufacturers are left furrowing their brows. Due to repeated lockdowns, production facilities had to close, and this was the beginning of capacity problems along with ever-growing backlogs.
Currently, the short-term exaggerated demand for bikes has improved slightly, but the demand remains very high.
Current challenges for bicycle component manufacturers
The never-ending lockdown in Vietnam
The frames of SIMPLON bikes are manufactured in Vietnam. Despite the high motivation of the employees, it is currently not possible to work at full capacity. The reason: A month-long lockdown has put a spoke in the wheels of production. Despite Covid tests and although no positive case was detected, the site had to be closed. Before the closure, the entire workforce was given the choice of either staying at the plant for the duration of the lockdown or spending the entire period at home.
200 dedicated employees out of a total of 700 showed ultimate commitment during this difficult time. Now the situation has calmed down a bit, and lockdown rules were eased. However, it will probably take until December before all 700 members of staff are allowed to return.
Energy crisis: no power for China
At the site in China, the entire workforce was able to work at full capacity but without electrical support. The reason for this was the energy crisis, which caused the power to be cut off. While initially there were two days a week without electricity, the number of days without power rose to five. As a consequence, diesel-powered generators were purchased as an alternative.
Another problem in China is the lack of carbon. Due to tense political relations in the country, procurement is only possible via complicated detours, which means that longer delivery times have become the norm.
