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Canyon Bicycles: Innovation on Wheels

Feature Article | September 2, 2015 by Iris Nagel-Martin

Canyon Bicycles is a niche player in the bicycle manufacturing industry. Business is booming, so the Koblenz, Germany-based company is now implementing SAP and is set to open a new factory building.

They think fast and they talk fast. “And actually, we don’t even have time to be here,” say Barbara Wittmann and Lars-Eric Ebert with a smile, when they hold their presentation at the SAP Forum for Trade in Mannheim, Germany in July 2015.

Wittmann, managing director of the SAP consulting company Die Erste Geige GmbH, and Ebert, head of IT at Canyon Bicycles GmbH, are currently working together on implementing SAP at Canyon. The new SAP ERP system is slated to go live on October 1, 2015, so of course, they have a tight schedule. “We’re right in the middle of the project,” Ebert explains, “And one thing’s for sure: What we do, we do really well.”

Canyon Bicycles, headquartered in the Rhineland city of Koblenz, generates 95 percent of its revenue through direct sales, with the remaining five percent coming from bicycles sold in the company showroom. Recent years have seen continuous annual growth of between 20 and 40 percent. Canyon’s bicycles are shipped worldwide. The company has already established itself on the European market, business is steadily advancing in the United States and Asia, and entry into the Australian market is scheduled for the end of the year. Most of its customers are serious amateurs or professional cyclists. As testimony to the quality of Canyon’s products, the company has received many design awards over the past few years.

SAP ERP: All Around Winner

In fall 2013, Canyon decided to implement SAP ERP. The company previously worked with Microsoft Navision, but was not able to use it for all business processes. Data silos and redundancy hindered day-to-day operations.

“Canyon Bicycles is a highly innovative company, and yet its IT systems were still at the tricycle stage,” Wittman says of the previous situation. The company opted for a standard SAP system, which makes it easy to hook up Canyon-specific processes in the separate logistics and assembly control systems – in other words, in the non-SAP systems.

The SAP portal and the HR systems have already gone live. Payroll has been working with SAP since January 2015. Goods receipt now operates using SAP, but the quality management processes have yet to be implemented. The mapping of the assembly processes began in April. SAP BW powered by SAP HANA is currently being connected, as is SAP BI, “to enable us to gather some experience in the area of technology,” Ebert explains and adds, “because the processes themselves have not become less complex.”

This is why the old Web shop is still in use. As the shop is critical for sales, Canyon wants to wait until after the go-live to move it to the new online sales channel. Shipping will be switched to SAP shortly before the go-live, and then the team will know whether the data migration was successful.

Small But Mighty

Canyon and its staff of approximately 700 have begun a new chapter in the company’s history. Many employees still have to become accustomed to the company’s advancement. For a small company with such high complexity like Canyon, it is important to take its employees seriously and get them on board for the journey into the future.

“We’re investing a lot of time in imparting the vision to the employees. Because it’s not just about new IT and a new building,” Ebert insists. Special tours have been organized to give employees the opportunity to look around the factory and find out as much as possible. This helps them understand why the company is expanding and dispel any fears of not being able to live up to future requirements.

Furthermore, employee training courses have been taking place for the new software since January 2015, with key users and subproject leads providing additional support. After all, the employees are the key to success.

“Our employees are also innovators, from production to the IT department,” Ebert says. Many of the employees ride Canyon bicycles, and Canyon’s customers are innovators, too. “We want to know what the customer does, then we can position the products better. With the new software, we can bring customers even closer to the company,” Ebert explains.

Wittmann adds, “The new IT system can adapt to product innovations. IT and business are on an equal footing.”

And there’s quite a lot going on in product innovation, such as the development of a connected bike, which is similar to the idea of the connected car. The bicycle is equipped with an onboard unit and sensors, which then transmit data to the cloud. This means that, in the future, customers won’t have to figure out when their bike is due to be serviced. What’s more, the bicycles will be able to respond smartly in an emergency: A sudden drop in speed will indicate that there has been an accident, and a call for help will be triggered. Networking with other cyclists in the area will also be possible, enabling routes to be shared, for example. The bicycle will become a networked digital product.

But it’s not all pie in the sky, and hard work lies ahead: Processes for returns management and gift cards are taken just as seriously as smooth production workflows.

“E-commerce and the digital world of today make people believe that everything is possible right away. But in production, we have long lead times of up to 120 days,” Ebert explains. Configurable material and customizable sales orders enable great diversity. Six country-specific prototypes are already running. Currently, over 100 interfaces are still to be defined, and more than 10 service providers need to be coordinated. The presentation is over. Ebert und Wittmann gather their things together and head home. The project must go on.

Photo via Canyon

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