Case study on how the supply chain of cannondale got inproved by the implementation of DIS

2. About Cannondale
• With a 30-year history, Cannondale is a pioneer in the
engineering and manufacturing of high-end bicycles,
apparel, footwear and accessories for independent dealers
and distributors in more than 66 countries.
• As a leading custom bicycle manufacturer with an
extensive and impressive customer list (including 17 athletes
that competed at the 2008 Beijing Olympic Games, professional race
teams and Tour de France competitors) meeting customer
demands and expectations is a mission critical to the
success of its business.

3. • Cannondale designs, develops and produces bicycles at
its factory in Bedford, Penn. and operates subsidiaries in
Holland, Switzerland, Japan and Australia.

4. Environment
• Cannondale produces more than 100 different bicycle
models annually,
• Cannondale is faced with a highly-complex and volatile
consumer demand picture.
• On top of volatile demand and an ever-changing product
portfolio, Cannondale's supply chain encompasses all
corners of the world with global manufacturing, assembly
and sales/distribution sites.
• 60 percent of which are newly-introduced lines.

5. • Cannondale's mix of make-to-order and make-to-stock
models requires to manage a range of product batch sizes,
sometimes with one-of-a-kind orders.
• A typical bicycle requires a 150-day lead time with a
four-week manufacturing window, and some bicycles
have more than 250 parts in their bills of materials
(BOM). Cannondale has more than 1 million BOMs and
manages more than 200,000 individual parts.

6. • Constrained by specialty vendors with expanding lead times
and limited production capability, quickly delivering complex
and custom products to meet customers' high expectations can
pose significant challenges to Cannondale .
• Managing parts availability and variable customer demand
requires flexibility in Cannondale's manufacturing operations.
As such, the company required a solution with global visibility
on all plant inventory levels and supply schedules to better
manage changes in product and customer demand.

7. Challenges.
• Cannondale operates a legacy material requirements
planning system (MRPII) that produces weekly reports.
• Due to the dynamics of the environment, by Tuesday
afternoon, Monday's reports were so far out of sync,
rendering them useless.
• The supply chain team was being forced to substitute
parts to meet demand, causing a cascading parts flow
problem.

8. • Cannondale's primary objective was to find a solution to
improve the accuracy of its parts flow, support the
company's need for flexibility and operate within the
confines of its existing business systems, all while not
breaking the bank.

9. The solution.
• Cannondale turned to Kinaxis for its integrated demand-
supply planning, monitoring and collaborative response
capabilities.
• Using a tool called Rapid Response, users could do a full
MRP explosion in minutes, compared to the eight hours it had
taken previously.
• Users throughout the organization can access accurate and
detailed supply chain information in an easy-to-use
spreadsheet interface embedded with MRP analytics and
automatically populated live data feeds from Cannondale's
MRPII system.

10. • Initially brought in as a MRP support tool, Rapid Response is
now used to solve multiple problems and address a number of
needs, including sales reporting, forecasting, sending daily
inventory availability, and feeding production schedule
information to the MRP and order processing systems.
• Users include buyers, planners, master schedulers, product
managers, customer service, finance and management.
• Supply chain participants across sites and functional groups
can now model MRP data to instantly simulate, share and
score "what-if" scenarios to evaluate and select the appropriate
action alternatives in response to changing supply and demand
conditions.

11. • Cannondale now receives automatic, incremental data imports
multiple times each day and a full import weekly from its MRP
system.
• All users receive up-to-date visibility of all sites, bringing
tremendous value to Cannondale. In addition, several members
of the management team use RapidResponse daily to examine
aspects of the company's backlog.
• Cannondale now has a monthly sales and operations planning
(S&OP) cycle and can compare old forecasts versus new
forecasts in an offline environment and to evaluate the
constraints of the new plan.

12. The Results
• Cannondale is able to respond to customer orders quickly,
significantly reduce its inventory and avoid the subsequent
negative financial implications.
• Cannondale has seen results in higher inventory turns and
reduction in safety stock, improvement in cycle times and
reduction in lead times, more accurate promise dates, and
faster and more accurate analysis.
• Cannondale initially installed RapidResponse in 1997 at its
U.S. operations.

13. • Since then, the company's European sites and sales office
in Japan have been brought on board. Cannondale is in
the final stages of its implementation of the latest version,
which has improved data update times from
approximately 20 minutes to two minutes.
• Considering the cost, complexity and time invested in
designing and building custom bicycles, having a solution
that makes the process as efficient and responsive as
possible provides Cannondale a considerable competitive
advantage and thus, is integral to its day-to-day
operations