Insourcing Yields Tremendous Success for Bike Component Manufacturer

The story is a familiar one. Hoping to save money on manufacturing and assembly, leaders in an industry move production overseas. The majority of component suppliers follow, out of the necessity to be close to their customers. Many of these maintain their American headquarters to keep administration, engineering and r&d at home, but the manufacturing jobs disappear. The bicycle industry underwent this transformation through the mid-nineties, shifting the majority of its production first to Taiwan, then to China.

Cane Creek Cycling Components, a producer of high-end bike components in Fletcher, North Carolina, kept its engineering and assembly functions in house, but had to send manufacturing to overseas contractors to remain cost competitive. Over the past three years, though, the company has invested in two Mazak QUICK TURN NEXUS 200-II MS Multi-Tasking turning centers. This is despite the fact that in-house CNC machining experience at the time of the first purchase was limited. The decision was born of necessity and has yielded substantial success, due in large part to the user-friendliness of the machines.

While Cane Creek produces a variety of bicycle components, it is best known to cyclists for its highly innovative headsets. A headset joins and allows movement between the bicycle frame and the fork holding the front wheel. Highly popular among cycling enthusiasts, Cane Creek headsets have been used by multiple winners of the Tour de France. Production of such headsets led the company to investing in its first Mazak machining center.

“It was 2007 and nearly all bike production was taking place in Taiwan, so we instinctively outsourced this new headset to a manufacturer located there,” says Josh Coaplen, Director of R&D at Cane Creek. “The first articles came back and met all specifications, so we thought we were in good condition. Later, we found out that the first articles were actually just the best pieces from a lot of several hundred.”

The Taiwanese manufacturer had substantial quality issues and had to produce up to 500% of the necessary quantity to fill an order with suitable parts, resulting in large shipment delays and unsustainable pricing. Over the course of four months, Mr. Coaplen made three trips to Taiwan to attempt resolution of the issue before Cane Creek decided that production would need to be done in the United States. This proved nearly impossible, though.

“To build awareness, we had started advertising the new headset before the issues with our Taiwanese supplier surfaced,” says Mr. Coaplen. “These ads included pricing information, which was then picked up by several of the industry’s annual buying guides. In short, we couldn’t raise the price and the costs of subcontracting to an American manufacturer would be significantly higher.”

To minimize the cost of the components, Cane Creek had to place large orders and hold high levels of inventory. Even then, it was difficult to avoid taking losses, let alone to turn a profit. Frustrated by these financial constraints on an otherwise successful product, the company began evaluating what it would take to bring production in house.

“We didn’t know much about CNC,” says Mr. Coaplen. “No one here had ever run a machine or written a code. Plus, we were only familiar with a few of the major machine tool builders. As you can guess, we had to do a lot of research.”

That research began with obtaining copies of several of the industry’s leading trade publications to identify leading machine providers. Mr. Coaplen contacted a large variety of builders for information, then augmented that data with extensive online research to narrow the list to a manageable number. He then scheduled visits with these providers to discuss his needs and their ability to meet them.

One of Cane Creek’s meetings included a trip to Mazak’s Southeast Technology Center in Suwanee, Georgia. Ted Halberstadt of MachineTech, Mazak’s North Carolina distributor, accompanied Cane Creek representatives on the visit. The expertise and approach to service from both MachineTech and Mazak proved a strong selling point. The user-friendliness of Mazak’s MAZATROL CNC control sealed the deal.

“Most of the companies we met with wanted to sell Cane Creek a comprehensive, but limited, solution,” said Mr. Coaplen. “They offered to provide turnkey solutions for the seven components that we needed immediately, where they’d provide the machine and the programming. What we really needed, though, was a machine that we could learn to program very quickly. We were having a difficult time finding an experienced machinist to hire and knew that those seven parts were only the beginning. With the conversational programming on MAZATROL, we’d be able to program parts from day one, as anyone with an engineering background can quickly learn and use the control.”

Cane Creek placed an order for a QUICK TURN NEXUS 200-II MS Multi-Tasking turning center. With a second spindle, this machine allows continuous machining and provides Done-in-One production by machining both the front and back of parts in a single setup. Still unable to find a skilled machinist to hire, the company set to learning the ins and outs of the machine. Cane Creek representatives spent three days training at the Mazak Southeast Technology Center before receiving the machine. While there, the company created several part programs, tested them out and put them on a USB drive so that they would be ready to go upon delivery of the machine.

The Mazak machine was installed in late 2008. With the instruction provided by Mazak and tooling supplier Sandvik Coromant, Cane Creek began running parts immediately. Within months, the company realized that the machine would produce parts much faster than expected, resulting in excess capacity. To take advantage of the situation, Cane Creek began bringing production of other components and prototypes in house. Representatives from the company say this would not have been possible if MachineTech had not convinced them to include a live-tool milling spindle on the CNC turning machine, a feature that Cane Creek initially saw no use for. The majority of the parts brought in house are machined from 6061 or 7075 aluminum and typically call for tolerances of 0.001”, though some features require as tight as 0.0002”.

The timing of the machine investment proved highly beneficial, as reducing costs and inventory levels helped offset the economic downturn through 2009. Additionally, in short time Cane Creek was able to identify and hire a skilled machinist, helping the company to get even more from the machine. The R&D department at Cane Creek continued to use the QUICK TURN NEXUS 200-II MS for other purposes, though.

“In the past, R&D-level prototypes could be a very expensive proposition for us,” says Mr. Coaplen. “They are costly to farm out and it can take a number of them to arrive at a workable design. Since necessity led us to learn a lot about the Mazak machine, we continued to use it for product development.”

Often staying long after normal production hours, Cane Creek engineers can quickly run components for a prototype, test its performance, make design revisions and then repeat the process. This new capability led to the development of several highly successful complex products, the AngleSet threadless headset and the AER lightweight headset. An innovation in the field, the AngleSet allows a cyclist to quickly and easily adjust the head angle of a bike. This provides benefit by giving the cyclist a means to conveniently fine-tune a bike’s performance to specific riding conditions and personal preferences.

At launch in early 2010, Cane Creek’s most optimistic forecasts for the AngleSet predicted modest annual sales. In its first year, the company sold 400% of its initial estimates, finding that an enormous number of cyclists wanted the unique ability it provided. The rapid sales justified a second machine, and the company purchased another QUICK TURN NEXUS 200-II MS in late summer of 2010.

“The Mazak technology is just perfect for our operations,” says Mr. Coaplen. “The QUICK TURN NEXUS machines are very easy to use, provide reliable quality, and are adaptable to every part we throw at them. We’ve added LNS bar feeders to them, which allows us to run parts unattended overnight, increasing our capacity. The decision to bring some manufacturing in house has reduced our costs and brought work that was being done overseas back to North Carolina. We’ve been very fortunate in the decisions we’ve made over the past several years.”

The trend of success continues for Cane Creek, with its AngleSet becoming so popular that an industry publication started a campaign to have the company produce a new version of it. Sales of all of the company’s components are up, with growth in 2011 expected to surpass forecasts. With a dedication to identifying ways to better its operations and commitment to working hard to implement them, Cane Creek provides an inspiring example of the continued potential of American manufacturing.


About Mazak Corporation

Mazak Corporation is a leader in the design and manufacture of productive machine tool solutions. Committed to being a partner to customers with innovative technology, its world-class facility in Florence, Kentucky, produces over 100 models of turning centers, Multi-Tasking machines and vertical machining centers, including 5- axis models. Continuously investing in manufacturing technology allows the Kentucky Mazak iSMART Factory™ to be the most advanced and efficient in the industry, providing high-quality and reliable products through its “Production-On-Demand” practice. Mazak maintains eight Technology Centers across North America to provide local hands-on applications, service and sales support to customers. For more information on Mazak's products and solutions, visit www.mazakusa.com or follow us on Twitter and Facebook.