Nature of Giant Manufacturing

The largest bicycle manufacturer in the world is Giant Bicycles, a Taiwanese firm also known as Giant Manufacturing or Giant. Three ideals served as the company’s compass when it was founded in 1972: innovation, craftsmanship, and inspiration. Giant became a leading provider of bicycles for some of the most well-known cycling brands in the world because to the founder, King Liu, and his team’s application of these ideas.

The business has been successful in expanding over the years to become a major force in the cycling industry. With operations in diverse countries across the world and partnerships with more than 11,000 retail partners globally, the company has been able to cater for the cycling needs of casual and competitive bikers. Their bicycles feature in most international cycling competitions with Giant sponsoring top cycling teams including the Global Giant Mountain Bike as well as Team Giant-Alpecin.

The company has also segmented its products into various categories, mainly by user and then by level. Under user there are men, women and youth and under each user level, the bikes are classified into: On-Road, X Road, BMX and Off-Road. Under every level, the bikes are further classified according to their use, that is, Endurance, City, Racing, Cruiser among others. These segmentations combined with their presence all over the world have guided the company in generating significant revenue margins from bicycles.

In the year 2014, the company became the world’s largest bicycle exporter claiming 10% of the global market. It was able to ship approximately 6.6 million units within the same year generating annual revenue of 1.4 billion USD, which was a 10% increment from the revenue generated in 2013. The company has also been able to secure its going concern status through its strategic location of factories in Taiwan, China and Netherlands where they are able to get skilled workers and readily available raw materials that significantly enhance the time in which a bicycle is manufactured.

Materials Resource Planning

Giant does not apply materials resource planning within its supply chain management. This can mainly be evidenced from the fact that the company manufacturers all of their bike components from scratch and from recycled carbon materials. In this way, the organization does not plan or schedule its inventory combined with the fact that their factories are required to manufacture numerous bicycles. Additionally, machines are rarely used to manufacture the bicycles and almost all the work is done by the employees within the factories. The company manufactures a huge amount of their products in advance which they then use to determine if they are enough to cater for the demand in the market. In this way, the employees own and run their supply chain by ensuring that products are available to the market readily.

The organization, on applying materials requirements planning (MRP), will mainly benefit from enhanced efficiency. This method mainly ensures that the right quantity of inventory moves through the various production stages and this is useful in identify possible shortages and stock outs of inventory. Supervisors and managers are therefore able to track orders through every stage and identify any non-value adding activities, including those that consume more time than necessary. They would also be able to ensure that employees remain keen while carrying out their operations as this system demands accuracy in recording data. MRP would also be beneficial for the company as it is currently used by top manufacturing companies where managers attribute streamlining of operations, labor and space utilization; as well as improved services to consumers on the use of this supply chain concept.

Reverse Logistics

Giant applies reverse logistics mainly through the various after-sale services provided to their consumers. The company aims at ensuring that they connect consumers with the available local retailers near them that the company has partnered with. In this way, consumers are able to visit the local retailer and acquire a bicycle of their specifications. Additionally, some of the local retailers are able to deliver bike to the client’s residence and set it up for them for a nominal charge. Reverse logistics is also evidenced by the use of materials that can be recycled to make more bicycles. The use of carbon fiber as the main material for their bicycles ensures that the bicycles remain durable for a long time. The company strives to use materials that can be recycled so to manage their waste and reduce the amount of disposed materials that pollute the environment. They also aim at employing innovative strategies to ensure that consumers benefit from a unique cycling experience from their competitors. They for example use laser systems to ensure proper wheel alignment.

Reverse logistics has benefitted Giant in the reduction of significant expenses particularly those incurred in the manufacturing process. Through the use of carbon fiber for most of their components, they are able to significantly reduce expenses that would otherwise be incurred in the use of additional materials. Reverse logistics has ensured that Giant is able to provide unique consumer service to their clientele. In this way, they are able to retain most of their consumers as well as benefit from a retained market share. It is also a means through which they can attract new consumers with the assurance that they will receive quality customer service.

Vendor Managed Inventory

Giant Manufacturing applies Vendor Managed Inventory (VMI) by ensuring that their retailers are always equipped with enough bicycles available for their clientele. They use information obtained from regular buying decisions made by consumers on various retail outlets to identify the bicycles that are ordered more in that area. In this way, they are able to ensure that retail stores have enough inventories for consumers. They also use Microsoft Retail Management System to manage stock within various retail outlets. In this way, they are able to communicate directly with the parent organization and interact with the company’s portal. The Microsoft Retail Management System is an example of the application of VMI as the software provides an auto-replenishment program to the retailers. This means that Giant makes replenishment decisions as opposed to waiting for consumers to order.

The company, through this concept, is able to curb against stock outs as well as cater for the uncertainty that comes with demand for bicycles by consumers. Additionally, through the use of Microsoft Retail Management System, the company is able to benefit from accurate record keeping which means that they will avoid errors that occur during data entry. This makes it easier to make forecasts from accurate information about future inventory needs. This is a form of outsourcing for Giant as they will benefit from increased expertise in inventory management allowing the managers to focus on core functions and processes of the company.

It also fosters better relations between the company, its retailers and the end consumer. Consumers are happy when they find the item they desire available at their disposal. The organization therefore is perceived to be an efficient service provider as clients are able to easily obtain bicycles when needed.

Customer Profitability Analysis

Giant does not employ Customer Profitability Analysis in providing goods and services to consumers. The organization provides a diverse number of bikes grouped according to users, level and uses as mentioned earlier above. This means that they aim at satisfying the needs of people of all walks of life, through product diversification. They also pay attention to all their product categories to ensure that they are able to retain consumers in each of their category. This is why each category (On-Road, Off-Road, X-Road, E-Bike and Youth) has various number of bicycles that can be further graded according to their performance or consumer lifestyle. The industry they operate in also ensures that most of their products are acquired by consumers. However, the segmentation of their consumers can be said to a component of customer profitability analysis.

Customer profitability analysis would be useful in eliminating products that are not value-adding to the organization through the generation of significant revenue. An example would be products that do not break even hence unable to generate profits for the company. They also include consumers who incur significant expenses in the product they prefer and yet provide minimal profits in return. By understanding the various margins generated by different product categories, the organization is able to focus on providing personalized advertising and other features including discounts. This will be crucial in the retention of such a consumer group and the organization is able to focus more on their profitable consumers. Employees within the organization will also be highly motivated to provide goods and services to consumers who actually acquire them. This will eventually lead to increased productivity levels to attempt to satisfy consumer demand.

Multichannel marketing systems

Giant has been able to use various channels to market their bicycles. Primarily, consumers are able to acquire bicycles from local retailers all over the world. This means that the organization has been able to maintain a physical presence in most regions in the world. Consumers are also able to purchase bicycles online showing that the organization has also been able to establish an online presence. The company also has several pages on social networking sites including Facebook, Twitter and Instagram among others where consumers are able to obtain more information about product updates. As mentioned above, the company also sponsors international teams and their bikes have been known to win global championships and awards based on their designs. This publicity acts as a marketing channel because current and prospective consumers would want to be associated with a brand that is recognized globally for various achievements.

Through these diverse marketing channels, the company has been able to increase their revenue margins across Europe. This has been evidenced by their sale of approximately 6.6 million units in the year ended 2014. Additionally, with the adoption of E-bikes, the company will be able to reach out easily to more consumers across the globe. This will increase their brand reputation and enable them to maintain and increase their market share. Information received by the company from their consumers particularly through online channels will be useful in strengthening relationships between consumers and Giant Manufacturing. This will lead to increased consumer loyalty and the organization will also benefit from a higher retention rate of their consumers. Diverse marketing channels also provide a means through which the organization is able to reduce expenditure on advertising their products. By adopting conventional online marketing channels, the company will easily face off traditional marketing channels that incur significant costs.

Socially responsible procurement

Giant Manufacturing employs socially responsible procurement by mainly ensuring that their factories in Taiwan, Netherlands and China have safe working conditions for their employees. They ensure that they have provided their employees with the appropriate gear needed to carry out their job that will protect them from any hazardous material. The company also ensures that they provide their clients with bicycles manufactured from durable raw materials. The use of carbon fiber and aluminum as some of their core products ensures that the bicycle remains in use for a very long time. This reduces the instances of disposal that may be taking place if using other material that easily loses its aesthetic value including steel. They have also carried out socially responsible procurement by recruiting people for their factories from the local community. This is mainly the case in Taiwan and China where by the factory workers are local citizens.

This concept has benefitted the company by boosting their brand reputation and image. A company that is perceived to be socially responsible is able to garner the loyalty and respect of the community. This is also a huge factor in the increment of revenue margins as community members are able to have the organization as a preferred supplier of goods and services. Socially responsible procurement aids in ensuring the organization becomes more economical, hence saving on costs. This is because they use materials that will not harm the environment protecting them from various expenses acquired on litigations due to environmental pollution (Nastu, 1).

Benchmarking

Giant Manufacturing has to apply benchmarking since it is a large organization within a competitive industry. They use benchmarking to measure their current progress and compare it with that of their competitors. Benchmarking is also applied where the company managers have set in place budgets that will be used to compare their performance with their set targets. This concept is important as it ensures the company stays in check in its pursuit of its goals and objectives. It ensures that company managers remain true to the company’s goals and objectives and are motivated to pursue them.

Works Cited

Nastu, Paul. “Socially Responsible Procurement - Doing the Right Things for Everyone.” Environmental Leader. N.p., 29 July 2009. Web. 30 Mar. 2017