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Case Study: The Bicycle Association

Case Study: The Bicycle Association

Background:

The Bicycle Association (“the BA”) is the national trade body for the UK cycle industry.  It’s mission is to grow everyday cycling and remove barriers to enable more people to enjoy cycling.  Established in 1890 it counts most of the cycling industry’s most influential and ambitious businesses within its membership. 

Given the high value and awkward size of a bike, delivering them has always been a challenge. With the rise in e-commerce, especially during the pandemic, the power of the couriers increased such that delivery of bikes was refused in some cases (FedEx/TNT withdrew from delivering bikes) and in other cases prices rose even as the service levels fell.

JMCL was tasked with devising a solution against a backdrop of volatile consumer demand for all things “bike” which spiked (in the pandemic) and has subsequently fallen. 

Assignment:  Devise and deliver a solution to reduce delivery costs and improve service quality for all BA’s members. In particular a solution that would serve all BA members – small, medium or large – across all their delivery needs e.g., bulk & individual bicycle deliveries, e-bikes, clothing, accessories etc. 

Objectives: Using our Enlightened Procurement methodology, we developed a solution. It’s based on consolidating and tendering customer demand and then working with a chosen supplier to meet the objectives of the various stakeholders. In particular to change perceptions so that the bicycle market became attractive to Couriers in order that they invest and provide cost-effective, reliable and high-quality services

Stage 1 – Proof-of Concept: Sign-up Members’; Identify & Consolidate Requirements; Analyse & Stimulate Supply Market

At Stage 1 we wanted to prove our Concept and worked with a group of thirty of the most interested and influential BA members to do so. We created a Steering Group, to channel members’ requirements and obtain rapid feedback for ours and our suppliers’ ideas. 

Through this we consolidated spend and developed a simplified, unified specification to approach the supply market from a position of relative power. Not only did this significantly increase members’ leverage with suppliers but made the unattractive – Couriers refer to bikes as “dirty packages” due to their awkward shape and size and unsuitability for automated processes – now attractive. From a procurement perspective it increased the range of suppliers we were able to attract and increased their desire not only to win the work, but also to invest in long-term solutions for the bike industry.  

As well as approaching known suppliers to the industry, we sought expressions of interest from new suppliers through a more novel recruitment approach, placing adverts and articles in trade journals.  This proved highly effective in enabling us to compile a short list of credible suppliers.

Although BA members required competitive costing – margins in the industry are tight – we teased-out that in most cases reliability and quality of delivery was paramount. So, our first Invitation to Tender for suppliers focussed solely on the quality and reliability of their service and willingness to commit to the industry long-term.

We invited this shortened list of credible suppliers to then submit commercial terms. Further analysis and due diligence reduced our choices to two prospects both of whom presented their proposals to the full BA membership. Following members feedback and further negotiation we appointed our preferred supplier.

Solution

Our supplier’s solution includes a free, individual survey of requirements for each member to identify specific requirements e.g., pick-up points, products, volume, spend etc. This is then followed by a dedicated solution with pricing reflecting overall BA demand. 

In addition to providing high-quality, reliable service with highly competitive pricing our chosen supplier is investing long-term in:

  • A Customer Service Team dedicated to the bicycle industry
  • A dedicated, bicycle delivery network for members with medium/large volumes
  • A dedicated, bicycle delivery network for members with small volumes

Stage 2 – Expansion of the Programme

The success of the Stage 1 is enabling us to roll-out the programme to the full BA membership.  JMCL facilitates the entire process to ensure that BA’s members maintain their commitments and the supplier maintains theirs. We meet regularly with all parties which enables us to keep on top of members changing requirements, review market changes and to refine the supplier offering. This working together enables us to maintain momentum, identify opportunities and ensure issues are resolved quickly and seamlessly

Stage 3 – Long-Term Aims

In the long-term, our industry-wide coordinated procurement approach will continue to deliver sophisticated insights enabling further opportunities to drive cost out of the supply chain e.g. using technology platforms to build marketplaces.  This underpins the BA’s strategic goal to transform courier management for its members. 

Not only will this deliver tangible cost savings, but it will also support the industry’s sustainability commitments too.

Results in Summary

  • Couriers – reduced cost of couriers and improved service levels for individual BA members 
  • Straight-forward procurement process saving members time as they do not have to negotiate individually
  • Improved purchasing power with members acting as a cohesive group
  • Supporting BA in its drive for improved sustainability

For further information, please visit www.jmclconsulting.com.  Email Jonny Michael, CEO, j.michael@jmclconsulting.com