Santa cruz bicycles bike builder

Santa Cruz Bicycles Case Study

Summary

Santa Cruz bicycles, a sister company of Santa Cruz skateboards, is a company that was founded in 1993 by Rob Roskopp, Mike Marquez and Rich Novak, these founders were all professional skateboarders. The company’s initial revenue was approximated at $6 Million per annum at its initial stages. However, with the company’s abilities to adapt to newer technologies and revolutionizing business methodologies, its recent revenues are estimated to be between $20-$40 Million per annum. The company acquired a special technology for its consumers called the Virtual Pivot Point (VPP), which accelerated the company’s stocks and revenues sharply. VPP is a suspension system designed specifically for bikers who ride bikes on rough terrains or participate in mountain biking. The fundamental goal of this suspension is to absorb hard shocks as riders traverse through rough terrain and ridges without letting the rider waste energy from pedaling up hills. Hans Heim, a partner of Santa Cruz Bicycles mentioned that the initial and the main drawbacks of full suspension bicycles was that they waste energy reacting to the rider’s movements. The goal was to design a system that stops the bike’s pedal-induced-up and down motion without any extra damping or topping out of the rear suspension.

Initially, the company faced a lot of failures and went through a ton of hurdles during the stages of prototypes. One of the frequent problem was that the suspension would break during testing. This failure constantly affected the company, as well as the Research and Development process without a definite solution. It took the company seven months to develop a new design using the Autodesk’s AutoCAD computer-aided design (CAD), and if it failed again, the company would have to start from scratch. Not only was this process time consuming, but it also dented the company’s expenditures significantly. Upon in-depth investigation and substantial research, The Company came up with a solution that consisted of people, processes, and technology. It got the help of a design package called the Pro/Engineer 3D from Parametric Technology Corporation (PTC). This design package became very beneficial for various reasons, it gave the engineers a vivid and in depth research with powerful analysis and modeling capabilities. They had simulation capabilities that could analyze motion of the tire and to gauge the effect on shock absorption. The previous design that Santa Cruz used needed up to seven hours of testing a design, but with this new software it would need less than five minutes to have a simulation completed. The engineers would have ample time and run multiple simulations in a day and nitpick at issues in a more refined manner. This new software was just one of the very components of the new process design.

Santa Cruz bicycles hired a master frame builder Gary Yokota to build and test prototypes in house. Yokota would construct a prototype after an explicit process where a Haas machine would carve a piece of aluminum into an accurate piece. The unfinished product would go through various processes and stages of refinements after which, the engineering team would design a new bike, for which Yokota creates a prototype. Finally these new development of the company was a significant decrease in its design-to-prototype process. Initially, Santa Cruz bicycles would take an average of 28 months for the production of these hefty bikes. This was all due to the outdated design softwares and old-fashioned methodologies that created hinderers from the start of the design to the shipping process. However, coping up with the marvels of modern technologies, it now takes 12 to 14 months for the entire production cycle, literally slicing the time in half.

Discussion Questions and Answers

1. Would you consider this transformation to be incremental or radical? Why?

Response: Incremental innovation changes a firm bit by bit. The firm takes a slow and steady change, this way incremental innovation is less risky compared to radical innovation. When a firm reaches its goals with designing the end product, it has gone through considerable amounts of changes and ideas that were carefully processed. I would consider this scenario a radical transformation because they replaced the old software with the new one. It took Santa Cruz about seven months to develop a new design and they would have to start from scratch if the simulation failed. After selecting the new PLM software which is called Pro/Engineering 3D, the time to process a new design was quickened. The new technology gave detailed results which allowed them to quickly make design adjustments. The simulation process which took an average up to seven hours was cut down to within five minutes allowing engineers to run multiple simulations every day. In a PLM system, product structure is strongly related to all the business activities of the company; the product structure in a PLM system is associated with the business view (design, industrialization, manufacturing, etc.)

2. What, in your opinion, was the key factor in Santa Cruz Bicycles’ successful process redesign? Why that was factor the key?

Response: The key factor in Santa Cruz Bicycles’ process redesign was the new PLM software that allowed the engineers with more powerful analysis and modeling capabilities. They could see the results in detail. For example they watched the VPP suspension let the rear tire move up and see whether the tire hits the frame, and they could see the shock absorption through a gauge. This change was the key factor because this software gave the engineers a quick feedback, and if there were any changes to be made, the engineers could make quick changes and adjustments.

3. What outside factors had to come together for Santa Cruz Bicycles to be able to make the changes it did?

Response: The outside factors that was part of Santa Cruz changes was that they hired a master frame builder to build and test prototypes in-house. Before Santa Cruz made changes they would outsource their prototypes, which was costly and took more time. After hiring the master builder locally they had saved money and time, a process which took 28 months was cut down to 12-14 months.

4. Why is this story more about change management than software implementation?

Response: Overall the components that this company made to make changes were combination of people, processes and technology. Although software implementation might be the key factor of its changes but it was not the only component that changed the company. The company changed its overall production for the end running product, it had people analyzing results and processes and machines in playing part of the production. In order to change a business process a new software has to be implemented, because creating a new business process requires latest machinery, technologies, and efficient ideas.

References

My referencing style is from the Management Information Systems Quarterly journal

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Duvall, M. (2007). Not Your Father’s Bicycle. Baseline, (79), 51

Hjermstad, M. (2002). Santa cruz brings back outland's VPP suspension design. Bicycle Retailer

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Kim and Mauborgne. (2005). Blue Ocean Strategy. Boston: Harvard Press.

Leifer. (2000). Radical Innovation. Library of Congress.

Santa cruz bicycles. (2002). Bicycle Retailer and Industry News, 11(8), 39. Retrieved from http://search.proquest.com.ezproxy.lib.uh.edu/docview/195505260?accountid=7107