Page 205 - Operations Strategy

180 CHAPTER 5 • PuRCHAsing And suPPly sTRATEgy
basis, or as a joint venture between a client and one or more partners. (See the exam-
ple below on Cooper Bikes.)
● 5PL? – you guessed it: almost inevitably, some firms are selling themselves as fifth-
party logistics providers, mainly by defining themselves as broadening the scope
further to e-business.

Example 4Pl at Cooper Bikes 10
Utilising the engineering and technical know-how that has been synonymous with the Cooper
Car Company for 50 years, Cooper Bikes, the bicycle division of the company, first launched
its new range in 2009. Mike Cooper commented: ‘The Cooper Car Company has always had a
passion for bicycles and we had been thinking about diversifying the business for a while. We wanted
to turn our engineering know-how to making bicycles that offered the best possible components for the
best possible price.’
The bicycle industry in the UK is mostly artisan based, small scale and uses a mixture of
UK-manufactured and imported components. Generally, volumes are insufficient to finance
large-scale bike manufacturing. By contrast, the recognised centre of mass bike building is in
Taiwan, whose exports alone are around 4.5 million bicycles every year. Not surprising, then,
that Cooper bikes are mostly made in Taiwan. However, as well as keeping economically viable,
Cooper wanted to leverage the appeal of the Cooper brand from the heritage of John Cooper’s
racing days through the original Mini Cooper to the John Cooper Works partnership with
BMW. Accordingly, their designs feature British brands such as Reynolds tubing, Brooks sad-
dles and Sturmey-Archer chain sets – all well-known British names in the cycle world. Of course,
Cooper design the bikes and specify the materials and components from their London base.
In order to manage its operations effectively, Cooper decided to use a fourth-party logis-
tics (4PL) service provider to source the completed bike. The outline of the supply chain is
shown in Figure 5.11. The 4PL agent, Action Trading International Ltd (ATI), initially sought a

Figure 5.11 Cooper Bikes supply chain

Taiwan

Frame
Cooper Bikes 4PL agent builder Initial Distribution
ATI assembly centre Retailer
Maxway
Design

Tubing
Other Brooks
(some from suppliers saddles
the UK)

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