Name: Venkatesh Krishnamoorthy

National Bicycle Industrial Co.

Question: What are the differences between the new POS & mass
production process? What criteria will you use to decide whether POS
system is right for the new supply chain?

Differences between POS (Panasonic Order System) and the usual mass
production process are as follows:
1. In the mass production process, the bicycle were manufactures in batches
of 50, 100, 150, etc. whereas in the new POS, the bicycles were made-to-order.
The manufacture of the bicycle started only after the order from the customer
was received.
2. The mass production process relied on predictive data analytics on the
type of bicycles that will be sold, but there could be various discrepancies on
such analysis as it would be impossible to determine the exact number of
bicycles of each type to manufacture. E.g. Weather. Therefore, each year the
most popular models are out of stock and the less popular models get
accumulated forcing the sellers to sell them at marked down prices. But in the
case of POS, since the bicycles were only manufactured after the order was
placed, there was no question of unsold bicycles that have to be marked down,
3. Although computers were used extensively in the production process, they
were never used in understanding the customer requirement and design if
custom made bike. In the POS this was introduced. In the order entry section on
the second floor, clerks would use computer terminals to enter the information
defining a customers order into the main computer which would develop and
print a diagram of the bicycle and a bar coded label that would identify the bike
during production.
4. In the mass production process, the customers were given a given a small
set of different set of choices as a package, for e.g. the color of the bike, the
length of the handle, etc. But it would be impossible to manufacture or have in
stock the bicycles with all combinations of customer requirement. But in the case
of POS, the customer was free to choose the specifications of the bicycle in any
combination as per his/ her will.
5. The retailer selling the bicycles had to shell out an additional 20,000 yen
for getting the color samples and the fitting scale for the POS, to show the
customer the various combinations.
6. The POS had a unique idea to print the name of the owner on the bicycle
as a value-add.
7. To decrease the lead time, it was discussed in the POS process to use fax
as a means of communication. In this way, the order-to-delivery time could be
reduced to a week.
The customer attraction over a defined period of time (say, 1 year) will be an
indicator of success for the POS system. It will be important to obtain customer
feedback. Additionally, the quality of the product will be reflected by the number
of times the bicycle comes back for service before its predicted break-down
period.