Supply bottlenecks: How VSC.Bike secures ongoing production

Delivery problems and price increases for primary products are currently causing difficulties not only for companies with international operations. Companies of all sizes and in many sectors are affected - also due to the current geopolitical developments in Eastern Europe. According to a survey by the ifo Institute, around 74 percent of the bicycle trade is currently affected by delivery problems. This is mainly due to the lack of raw materials - especially for wear parts. The sensitive international supply chain system has been significantly disrupted.

Even at the cargo bike manufacturer VSC.Bike, production is hampered by delivery problems, although the order books are very well filled. Whether it's the shift group, brakes or saddle - many parts from the Far East are currently not available. European suppliers of VSC.Bike are waiting for raw materials such as rubber or steel. The situation is particularly critical for electronic components, where delivery times add up to several years in some cases. All this sometimes leads to long waiting times for the desired cargo bike.

To ensure that cargo bikes continue to roll off the assembly line in Allstedt despite the war- or sanction-related supply restrictions, the manufacturer relies on its well-established network of suppliers. Diversifying the supply chain is a good way to reduce dependence on individual suppliers. Even before the crisis, VSC.Bike sourced every component from at least two suppliers. This is now benefiting the company in times of disruptive supply chains. Since the first Corona cases in Germany, delivery times have doubled for many suppliers. If one or the other component is out of stock, VSC.Bike switches to products with shorter delivery times from alternative suppliers.

In order to maintain cargo bike production despite the short supply, demand planning first had to be adjusted. Before the crisis, demand forecasts were only made for a few months in advance; today, purchasing manager Maik Walter is already planning for the next two years. Real-time production and storage times of less than two weeks are no longer possible under the current circumstances. There must always be more components in stock than are immediately needed for production. Four to six weeks before production, standard components should now already be at the production site in Allstedt. For parts that are particularly difficult to organise, such as handlebars or seat posts, even a lead time of six months has to be planned. Thanks to good demand planning, increased stockpiling and switching to alternatives, VSC.Bike has been able to continue to ensure smooth production despite all the difficulties.

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