TAIPEI, Taiwan (BRAIN)—“If you have a problem, if no one else can help, and if you can find them, maybe you can hire . . . the A-Team.” So went the introduction to the cult 1980s TV show about a group of over-the-top commandos who wisecracked their way through seemingly impossible missions.
In Taiwan, another kind of A-Team has been tackling another seemingly impossible mission: reviving the island nation’s bicycle industry in the face of aggressive price competition from mainland China.
Much of that competition, of course, is of Taiwan’s own making, as Taiwan’s leading manufacturers set up mainland factories to take advantage of cheap Chinese labor.
But that strategy came at a steep price for Taiwan’s domestic industry. Taiwan bicycle production, which had been declining steadily through the 1990s, fell off a cliff in 2001.
In an effort to staunch the bleeding, Taiwan’s top two bicycle manufacturers, Merida and Giant, set aside their competitive instincts and invited 11 top parts and components suppliers to join a new association—the A-Team. Their mission was revitalizing the domestic bicycle industry by swiftly moving up-market and focusing on high-end products instead of chasing volume.
Officially started on Jan. 1, 2003, the A-Team focused on manufacturing techniques developed by Toyota. The companies began adopting the Toyota Production System in their factories.
The primary goals are to eliminate manufacturing defects, minimize inventories and deliver on time. Each can require sweeping changes in the operation of a factory.
To minimize inventories, A-Team members implemented “Just In Time” systems that requires suppliers to deliver components to the assembly factory only when they are needed.
A-Team members also adopted the “1-1-10” strategy, which calls for suppliers to receive one order a day, make one delivery a day, and deliver every order within 10 days.
The A-Team philosophy has paid off big so far. In six years, Taiwan manufacturers have doubled the average value of every bicycle produced even as the total number of bicycles exported has stayed flat.
In 2007, Taiwan exported more than $1 billion worth of bicycles—the highest value since 1995.
Be sure to read the profiles of Tony Lo and King Liu in today's Web Exclusive section down below.