Large economies of scale allow Higo to lower its prices
The recent investments in the quadrupling of production capacity and the automation of processes throughout the supply chain now allow E-bike connector manufacturer Higo to deal with bigger volumes at lower unit prices. Higo wants to share these economies of scale with its customers by lowering its prices for the complete E-bike connector range.
From niche player to market leader
‘The focus from the start was to deliver the best quality connectors for the complete E-bike system together with a local service in Europe’ comments Franky Vanlerberghe, CEO from A&C Solutions. Backed up by a strong R&D department, Higo set their first steps as a niche player in a growing E-bike market. Quickly these small steps became bigger footprints with larger volumes worldwide. ‘This was the trigger to think bigger and to make high quality accessible to any mainstream e-bike application’, continues Franky.
Large economies of scale at production site
In a short time, Higo moved its production to a more economic region in China and expanded its capacity from 8.000m2 to more than 32.000m2. At the same time it automized key manufacturing processes and decided to bring outsourced ones back in-house. This allowed them to keep a good eye on unit manufacturing cost. Its increased buying power of raw materials like cable, PVC and copper also helped in cutting costs at the bottom line.
Local efforts in European warehouse
‘The cost cutting strategy has been a joint effort’ explains Franky. A&C Solutions decided to reorganize the increasingly higher volume shipments from air to train freight to decrease the substantial impact of transportation on the total costs. Also in its local warehouse in Belgium, it implemented a warehouse management system with scanning and customer specific labelling options to enhance efficiency and service.
Supply chain partnerships
‘With production shifting back to Europe, we see that more and more customers are relying on local stock nearby. It’s our intention to work closely with customers to guarantee just-in-time delivery. That’s why with many of them we already work with forecasts and call-off orders. In the end, the only way to stay competitive in the market is when the total supply chain is working together’, concludes Franky.
R&D remains heart of the business
Although many efforts have been made at the back end of the business, the heart of Higo remains its R&D department where 100 engineers are working every day to create the innovative designs of tomorrow. ‘This year, our R&D focussed on broadening the scope of our battery connector range with the development of special locking mechanisms, combining charging and discharging into one connector and the design of customized blade contacts. All at a competitive price of course’ adds Franky with a wink.
For more information on our new pricing, click on the button below to contact our E-mobility team directly.