Shimano has reported “serious logistical challenges” and a “lower service quality of deliveries” with longer lead times as a result, the company’s warehousing and distribution operations suffering ongoing problems since it was outsourced to logistics giant Kuehne + Nagel last year.
There have been delivery issues reported in its Benelux region (Belgium, the Netherlands and Luxembourg), Shimano starting to deliver from another warehouse in France in response to the problems which have had a knock-on effect for Shimano IBDs (independent bike dealers) across Europe, Bike Europe reports.
It has been an ongoing area of concern since Shimano outsourced warehousing and distribution to Swiss logistics firm Kuehne + Nagel in 2023, the components giant’s communications manager pulling no punches when explaining the less-than-ideal start to the companies’ relationship.
Kim Edwards said they had faced “serious logistical challenges” with newly started warehouse operations subcontracted to Kuehne + Nagel, and admitted that it meant longer lead times and a “lower service quality of deliveries”. She also suggested that the logistics provider’s performance in Belgium “is only slowly improving”.
“Once the problems surfaced earlier this year, Shimano took immediate action,” she said. “We started delivering from another Shimano warehouse in France. We recently scaled up capacity again in France. Although many actions have been taken by Shimano and Kuehne + Nagel in recent months, Kuehne + Nagel’s performance in Belgium is only slowly improving”.
IBDs have been left in the dark over when goods will be delivered, lead times lengthening to more than six weeks as delays are felt across Europe. One told BikeEurope: “In the meantime, we have to hold the repairs, without being able to tell the customer when the bicycle will be ready. This is annoying for us and annoying for the customer.”
It is believed one of the main issues is a “mismatch” between IT systems since Kuehne + Nagel took over the company’s warehousing and distribution, a move which saw Shimano inventory moved from the Netherlands to a Kuehne + Nagel facility in Belgium, and out of the manufacturer’s day-to-day access.
“Lead times vary per item and per warehouse,” communications manager Edwards explained. “Stock availability in both warehouses is regularly shared with our customers through our customer platforms, newsletters and sales representatives. The delivery times shown on the MyShimano website are currently as accurate as possible. The lead times per country are adjusted weekly.
“We expect order lead times to decrease rapidly. As soon as we have more information about this, we will share this with our customers. We are in close contact with Kuehne + Nagel on what steps they will take to improve service levels. We are doing everything we can to achieve major performance improvements as quickly as possible. We apologise for the delays and temporary inability to provide our usual adequate service.”
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It is the latest challenge to hit Shimano, the company in April reporting another significant fall in sales figures as net sales dropped 22.6 per cent in the first quarter of 2024 amid predictions its annual sales in Europe could contract by more than £170 million this year.
At the time, Shimano suggested the German, Dutch and Belgian bike market was strong, but other European countries are still said to be battling high inventories due to a cooling in customer confidence because of inflation and a challenging economic picture. Likewise, the North American market experienced a softening in demand coupled with high inventories.
Last summer, the company set its much-reported crankset recall in motion, recalling Hollowtech II models, including two generations of the popular Ultegra and Dura-Ace cranksets totalling 760,000 cranksets, and affecting over 2.8 million worldwide.
Shortly after, the company was allegedly hit by a massive ransomware attack threatening to release confidential data, before an investigation suggested that workers at its Malaysian supplier were subjected to “slavery-like” exploitation.
The new year began with the news that Shimano’s financial report for 2023 showed it had lost £93 million in sales from its crank inspection programme and total sales were down 30 per cent on the previous year. However, it is worth pointing out that despite the financial blow, labelled in the accounts as “extraordinary losses”, and a further reduction in bicycle-related sales, Shimano still posted a £322 million profit in 2023.
6 thoughts on “Shimano hit by delivery problems across Europe as brand admits “serious” logistical challenges, longer lead times and “lower service quality””
Outsourcing invariably fails
Outsourcing invariably fails to deliver the anticipated savings as the number-crunchers they employ don’t truly understand how the system actually works. IT incompatibility is so widespread and ‘making it work’ is full of pitfalls and expensive bodges which add complexity and opportunities for failure (and the bigger the project they are both more likely and will have a greater impact).
It’s similar to the nightmare of government and council contracts being given to private companies, whose sole concern is making a profit.
No – that’s just bad
No – that’s just bad outsourcing.
Good outsourcing enables companies to focus on core activities, release cash and working capital and re-invest that back into improved products and services.
Outsourcing can also be good for employees e.g. moving employees in specialist functions like transport operations into a new employer for whom that’s their core business – meaning the employee gets better IT and new career devt opportunities.
That sounds great (it sounds
That sounds great (it sounds like a sales brochure) but more often the reality is as I described it. Outsourcing is invariably used as a cost-saving measure, maybe it is sold as about ‘efficiency’ but it’s really about saving money. External contractors and ‘strategic business partners’ are tax-deductable but are not invested in your company’s future while skilled and knowledgeable workers are often seen as a burden, not something to be valued.
It’s why we have offshore call centres for banks, IT back rooms etc. My team was at risk from this back in the 1990s, though we found the idea that some faceless bods in another country or wherever could do & know a fraction of what our team did so preposterous that we laughed. The manager (a bit of a jerk, one of many) left the company not long afterwards.
When HSBC got rid of the Swansea call centre and closed my local branch I closed my account and gave them a piece of my mind. Contrast that with Nationwide (where I bank now), who have moved their Shrewsbury branch to a larger, more prominent location on the main shopping street. It’s a pleasure to walk in and be greeted by a real person. I prefer to give my money to/borrow from an organisation that invests in that kind of service instead of a bunch of crooks.
there is only one explanation
there is only one explanation to everything shimano: they have gone cheap.. they hired suits to maximize profit and lower quality
fixit wrote:
Having just paid £20 each for two Di2 cable adaptors that must have cost at least 10p each to make, I have to disagree.
His point is they are cutting
His point is they are cutting corners on manufacturing costs. Thus the recalls. But they charge more for it. So you pay more, but the underlying product may not be as good. That’s what the suits always plan to do.