If you’re not familiar with the sport of downhill mountain biking, it basically involves racing down a mountain on a steep, narrow, and gnarly track to reach the finish line as fast as possible. Currently, one of the most dominant riders on the downhill racing scene is an American by the name of Aaron Gwin. Gwin, who until very recently rode for the Specialized bike company, is the 2015 overall UCI Downhill Mountain Biking World Cup title holder. He also provided spectators with one of the most riveting moments of the 2015 race season by winning a race… without a chain. During his race run in Leogang, Austria, Gwin’s chain broke a few pedal strokes out of the starting gate. In downhill racing, where every second counts, a broken chain usually spells disaster. Astoundingly, by using his incredible riding skills (and, I suspect, minimal braking), Gwin managed to build enough momentum and speed to win the race. According to recent news from Specialized, it appears that Gwin’s isn’t the only chain problem that they are dealing with. They announced they are laying off three percent of their global workforce. A company spokesperson stated they need to realign the organization to focus “on three key areas: innovation, marketing, and supply chain.” Mike Sinyard, Specialized founder and CEO, said: “We are investing in our supply chain to ensure we are delivering the best product at the best price to riders and our retailers. All of this is an investment in our future.” Specialized must have realized their supply chain was hindering their ability to keep up with their competitors. Traditionally, bike companies like Specialized only sold bikes through a retail vendor network. However, new bike companies like YT Industries, Polygon, and Canyon have gained traction by cutting out vendors and opting for a direct-to-customer sales model. Recently, Trek and Giant, a couple of Specialized’s biggest competitors, also announced that they will be entering the omnichannel marketplace -- selling online, and through their vendor networks. Specialized has not announced that they are planning to sell bikes online, but, if they are planning to go the direct-to-customer route, investing in their supply chain would be the most logical place to start. Supporting a direct-to-customer model will surely increase the complexity of their distribution operations and order fulfillment. To effectively switch gears, they will need to increase the velocity and agility of their supply chain to satisfy their existing retail network and the new direct-to-customer demand. If you’re an incredible rider like Gwin, you may be able to beat the odds and win a race with a broken chain. But if you’re a company like Specialized, you have better odds of winning if your supply chain isn’t broken.
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