How is value built in to a
hand-built, custom bicycle frame?
Built into the price of any product are all of the expenses incurred during its production. This includes mistakes, inefficiency, building payments, machinery, labor, shipping, etc.... The less a company spends on these things, the less they have to charge for the final product. Paying attention to our expenses and investing in good people
has resulted in the ability to sell custom bicycle frames for almost 1/2 the price of the competition.
How'd they do that?
How can R+E Cycles hand-build custom bicycle frames in Seattle for less than $1,000 and full bicycles from $2,000? Believe me, that's a question that our competition is asking as well. I could write a book on everything we did to make this a reality, but I'll try to condense it to one article for now.
Alright competitors, here are all of our secrets. There's no magic.
- Build one bike at a time
- Don't waste money on expensive, automated machinery (it's the bicycle industry after all)
- Don't waste money on a huge facility
- Hire creative, competent people and keep them for decades
This philosophy might sound ridiculous to most bicycle manufacturers. The march to automation and mass-production has been in place for decades (and now the march to overseas production). I submit to you that we can do a better job when we focus on the product one at a time.
Need more details? OK, read on.
"How does this all affect me?" You ask...
Let's back up just a little bit
Most custom bike manufacturers started their shop out just like Angel and Glenn did this one. They learned to build bikes, and started building custom bikes one at a time. The tools were crude, but with lots of elbow grease, they could build a custom bike. Although the price was high, the custom bike offered the rider exactly the bike they wanted and a perfect fit.
Eventually, demand grows faster than the frame builder's ability to hand file every miter, so the hack-saw and file are replaced by the chop saw and vertical milling machine. These tools perform accurate cuts, but the set up takes a lot of know-how and time. Each miter requires a different angle and bit size, so almost all of the time saved cutting is replaced by set up time. The only way to save the time in this scenario is to adopt a Henry Ford approach and start mass-production. This way when the mill is set to cut tubes for a 57cm frame, you can cut 20 of them in about the same time as it would take to cut 1 in the hack-saw and file method. Offering a custom frame requires a lot more set up time, so they charge a lot more for custom. That's what you're paying for when you order a custom bike...extra time.
This is the phase that most U.S. bike manufacturers find themselves in today. It's not profitable to build 1 bike at a time, so they have to guess what models and sizes to build in advance. The drawbacks to this method are many:
- All frames have to be built in advance in batches, thus lots of inventory must be ordered and paid for ahead of time (interest charges cost $$)
- Large batches of inventory have to be moved many times during manufacturing (movement adds no value and costs $$)
- Manufacturer has to guess which models and sizes will sell, then build and store them (stock piled frames must be stored and protected costing $$)
- A mistake made on one frame is also made on every frame in that same batch (mistakes cost $$ and multiple mistakes cost many more $$$$$)
- Guessing wrong, and not having the proper sizes when customers want them causes disappointed customers (letting your customer down is the most expensive problem)
- Less choices for the customer as the bikes are already built and painted (goes to customer service again)
There are plenty more drawbacks to the Henry Ford method when it comes to bicycle manufacturing, but these are the big ones that cost you $$.
Realize, I don't think these to be true, I know them to be true from professional experience. What I just described is the manufacturing method we followed for many years. I, along with all of my employees, didn't see any other way to build. This is the mind set that drives most of manufacturing today. It's very difficult for people to look at things differently than the way they've been doing it for years. I'm no exception to the rule either. I may be the exception that proves the rule.
What the %@#$% happened?
In 2006, a customer, Luke, asked me why we build batches of bikes instead of building them one at a time like we did in the 1970's. I explained about set up time, and machines....Henry Ford...all that stuff. He asked, "Do you have 20 customers come in and order the same size on the same day?" I said, "Of course not." He suggested that we figure out how to better serve our customers by making the bikes one at a time just like they're ordered. Then he brought a book in about manufacturing philosophy for me to read. The book changed the way we make bikes forever. It's ironic that we are now building bicycles one at a time after they're ordered just like we did in the 1970's, and that's an advancement.
What Luke suggested is that we could put our creative minds to work to make a shop that could build bikes one at a time, and have the efficiency of mass-production. "Why should your customer pay for inefficient production methods?" The list of problems for mass-producing with the modern tools is just as long as the one for using inefficient tools. "You're just trading one set of problems for another," he said. He was right. You can replace 'problems' with 'costs passed along to the consumer'.
To read more about the changes we made in 2006, and see a few photos of the 'one-of-a-kind' machines we created, follow this
- Better Quality
- Lower Prices
- More Options
- Better Service
"How's that?" you say? Read on and find out.
One thought here: What if every employee who touched your bike added value to it? In other words, get rid of inefficient inventory movements and procedures that just cost time.
A new way to make bicycles:
The goal was to blend the efficient aspects of mass-production while reverting back to that 'one-bike-at-a-time' method of the old days. At the same time, we didn't want to incur a bunch of debt to the bank. There were also no machines produced that were designed to do what we envisioned. Most machines are enormous, expensive and wouldn't even fit through our door.
Through the years, the bicycle industry has produced some
rare birds with the most innovative minds. Some of these innovators have even changed the world in huge ways. At R+E Cycles, we have more than our share of rare birds right here on staff. When you've got folks like these, it seems like anything is possible. In November 2005, we decided to use that creativity to save you thousands of dollars and design our own machines so we could go back to the 'one-bike-at-a-time' method.
0% defect rate:
Whether you realize it or not, you're paying for mistakes made during production. This is true for every manufacturer. We've discovered that having one builder complete the frame entirely from start to finish guarantees an almost 0% defect rate. Now at R+E Cycles, one builder works from one piece of paper, on one frame, completing everything on it before moving to the next frame. During mass production, mistakes are common, and multiple (ie expensive).
No more wasted movement:
In mass production days, frames were moved around the shop in batches (movement is a wasted labor that adds no value). One guy did the welding, the next did the braze-ons, then someone else did the machining etc... Inevitability, the wrong braze-ons would end up on a frame or paperwork got mixed up and someone got the wrong paint color etc... These situations required re-working the defective bike(s). Re-working stops new production, and adds lots of time over a year to building frames (while adding no quality or value). Over the long haul, all of the bikes were more expensive than they needed to be if the defects wouldn't have happened. If we could achieve a 0% defect rate, we could save you (and us) lots of money.
No Cash Calls:
Most people think that hand-building one frame at a time has to be expensive because....well....it always has been in the past. For this reason, mid-sized bicycle companies will spend hundreds of thousands, or even millions of dollars on machinery to mass-produce their bicycles. Those machines are designed for mass-production factories, and make custom building very hard (ie. expensive) to do. All of those payments to the bank add greatly to the cost of every bicycle produced as those 'cash calls' come every month, and believe me, those costs are passed on to you. Equation - No payments to the bank for equipment = lower bicycle prices.
Over the last seven years, we've used our collective experience and talents to create a one-of-a-kind frame shop that achieves mass-production efficiency in a one-at-a-time custom frame shop. This is possible with the use of small machines that we've designed and built ourselves (for much, much less $$ than the big machines the other guys buy). Most folks think that's impossible, but if you know me well, you know that "impossible just takes a bit more time is all". Our Youtube video shows some of the process. It's called 'Building a Custom Bicycle' If you want to view it on Youtube.
The changes were massive, and completely unique in our industry. The changes included more than just machinery, they also included writing software and designing a new method of fitting bicycles. If you'd like to read a newsletter that details some of the changes we made, click here. It's a PDF file.
Big Flashy Digs:
Since most companies think they need massive machines to build bicycles, it only makes sense that a huge facility would follow right? Some of them even build new huge facilities to operate from. Equation - Big Building = Big Cash Calls.
Now, of course I'd love to buy a great big new building, but the fact is that the one we've been in for
years now works just fine and we own it. To buy a bigger one would cost us lots of money and that, of course, would end up ultimately costing you money. So, as long as Seattle will have us, we'll be right here at 5627 University Way NE, Seattle WA. Building bicycles doesn't require Big Flashy Digs anyway.
These are just a few of the philosophies that we've employed to maximize the value of our Rodriguez bicycles. Shop around, and I think you'll agree that we've created something unique......U.S. made, hand-built bikes that anyone can afford. You can pay more, but we guarantee you will NOT get a better bike.
If you'd like to visit our shop and see us in action, we'd love to have you. We give tours of the facility all the time and you are welcome any time.
Thanks for reading, and now on with the bikes!