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Tradition helps turn wheels of fortune for Brompton Bicycles
By Jonathan Moules
Published: June 29 2007 23:34 | Last updated: June 29 2007 23:34
Andrew Ritchie, managing director of Brompton Bicycle, has been smoking cigarettes in the office since he designed his clever folding bike more than 30 years ago.
Little has changed also in the 60-year-old’s manufacturing process since he hand-built his first batch for the friends whose money helped put Brompton on the road.
The factory floor, next to Mr Ritchie’s office, is covered with pallets of metal bike parts, most of which are bent and welded together on hand-operated machines by Brompton’s 75 staff.
The English smoking ban, however, will put an end to Mr Ritchie’s love of a sly fag at his desk. Meanwhile the success of Brompton is forcing him to change the whole way he runs his business.
Sales of Bromptons have surged in recent years as commuters, sick of congested roads and overcrowded trains, seek a faster, healthier way to get to work.
This has been good for the bottom line. Pre-tax profits rose 36 per cent to £567,000 in the 12 months to March, on turnover up 33 per cent at £4.9m.
The trouble is Brompton’s west London factory, huddled under the M4 flyover, cannot build its bikes quickly enough, frustrating its network of hand-picked dealers and customers alike.
Waiting times have stretched from 10 days to 15 weeks or more. The delay is even longer for foreign buyers, which make up about 55 per cent of Brompton’s sales.
“We are a victim of our own success,” says Mr Ritchie, admitting his company has shunned media exposure for fear of stimulating further demand.
A more blunt appraisal of the situation is supplied by Will Butler-Adams, a 33-year-old former manager of £40m chemical sites who joined Brompton as engineering director five years ago.
“If we are still going to be making bikes in five years’ time, we have got to make changes from the top to the bottom of the business,” he says. “Our current method of production is OK if you are only making 1,000 or so bikes. Once you get to 15,000 it is a struggle.”
This year Brompton hopes to raise its production to 20,000 bikes, compared with 14,400 in 2006. “We could sell double that number,” Mr Ritchie says.
Even this expansion has been hard fought since the additional welding staff needed to raise capacity have had to be trained by the existing workforce, denting even the current run rate for several months.
Mr Butler-Adams has reclaimed some production by outsourcing the manufacture of several generic bike brackets and parts. Brompton staff had up until now been bending these parts by hand. But external suppliers, with more advanced machinery, now knock them out at a fraction of the cost.
“We had been making aluminium reflector brackets by hand, but there was nothing unique or clever about our reflector brackets,” Mr Butler-Adams explains. “It was just taking up process capacity.”
He estimates Brompton could outsource as much as 40 per cent of its current production without losing its uniqueness.
“The hinges, and a lot of technical knowledge, are what makes our bikes special,” he says.
“People copy our bike and they screw it up left, right and centre and one of the things they cannot get right are the hinges.”
Mr Ritchie and his management team are currently in the process of deciding what exactly is core to the factory’s production line.
They will then be able to make the most dramatic change to the current operation by reorganising its shop floor from a collection of individual specialists to teams of about seven people, who together work on broader elements of the Brompton’s manufacture.
The plan is also to simplify the production operation from the current split between tooling, welding and assembly into just two departments – one that builds the metalwork and one that puts it together.
The changes will mean far fewer pallets clogging up the factory floor, freeing space to install new machinery, which hopefully will help raise Brompton’s productivity levels to those of a bigger business.
With outsourcing to south-east Asia by companies such as Raleigh, Brompton is never going to revive mass manufacture of bikes in the UK, but it can be a sizeable niche operator, Mr Ritchie notes.
The entire strategy is going to cost in the region of £500,000 to £1m, according to Mr Butler-Adams. The company could finance this from cash reserves in the bank.
Change is not going to be easy, Mr Ritchie says, adding that it will be two years before Brompton can reorganise its production line.
He claims that a lot of his time is now spent “fire fighting” problems with the current supply chain to ensure that every Brompton bike meets his personal high standards of craftsmanship.
Mr Ritchie appears more cautious than Mr Butler-Adams about outsourcing, claiming that he has had his “fingers burnt” on a few occasions. He is also dismissive of the possible cost advantages of transferring production to China or Taiwan, where almost all the world’s bikes are now made.
“One of the advantages of making the bikes here is we can be very responsive to customers’ individual needs,” he says, noting that one of the key selling points of a Brompton is the ability to personalise the bike with different handlebars or gears.
“When you have problems 12,000 miles away it adds significantly to your costs.”
An immediate solution to Brompton’s current problems could be to massage down the demand by raising its bike prices.
Mr Ritchie, however, appears reluctant to do this, noting that even in its basic form a Brompton bike gives little change from £500.
“I don’t want to push the prices into the realms of exotica.”
It seems Brompton still has a way to travel before it moves from a small-scale bike manufacturer to a medium-sized operator. What seems certain is that the company cannot afford now to back peddle.
Accueil 
et Taiwan 
malgré une forte demande qui est le double de la production actuelle 
.
