The Grand Canyon
Cyclist visits Koblenz in Germany to see how the gigantic direct-toconsumer brand works
Head behind the scenes at Canyon’s German headquarters to find out how the giant directto-consumer brand goes about its business
consumers despite having a warehouse full of bikes. It caused chaos and ended with a lot of unhappy customers, so today each bike goes through a series of rigorous checks, even to the point of recording the torque of every bolt.
‘We measure certain critical torques that we must achieve,’ says Wald, pointing to an enormous digital torque wrench being used by the assembly team. ‘This is an error-proofing device. This wrench has a Bluetooth connection, and it records the vehicle ID number of this individual bike. So if a customer buys the bike and there’s a problem on a critical torque we can verify what torque we set here.’
This tracking and traceability is part of what Wald describes as ‘automotive-level error-proofing’. Every component has a QR code, and every bike can be linked to each component and each worker involved with it. Even cardboard bike boxes are tuned to the specific requirements of each bike, to ensure no problems on arrival.
‘We have five boxes, in different sizes,’ Wald says. ‘Each bike is set in this specific gear so
‘This wrench has a Bluetooth connection, and it records the vehicle ID number of this bike’
the rear derailleur doesn’t get damaged from impacts to the box,’ he tells me, pointing to the positioning of the rear mech, which sits comfortably 1cm off the box’s wall.
Everything within the factory is clinical and precise. Today, signs around the building warn the workers of Cyclist ’s visit and tell them not to let our presence affect their work cycle.
In the warehousing section Wald points to a QR code on one of the bike boxes: ‘This is where we won the German award for logistic innovation. Here we scan the box and load it onto the trailer so we can move it into storage. As soon as the technician scans it he can connect it with the build and know what shipment it came with. We know the weight and dimensions of the box and the computer finds the best location in the warehouse by size and also when we need it next. If we don’t need it for a long time it goes further and higher in the stacks, so what we need tomorrow is more accessible. That’s all built into the system.’
Could Canyon go one step further and roboticise the entire process? ‘That will be the next step, maybe,’ says Wald. ‘But there has to be a good reason to do it because it takes away a lot of flexibility. That’s a discussion we keep having – how much automation do we need?’ As he talks, a forklift travels along a magnetic guidance strip and then disappears among a tower of boxes that looks like something from the final scene from Raiders Of The Lost Ark.
Quality control
Canyon’s determination to double-check every aspect of the bike’s build and delivery extends out beyond its German facility to the Asian factories where its frames are made.
‘We can’t influence what carbon fibre suppliers like Mitsubishi are doing,’ says Gordon Koenen, Canyon’s head of quality. ‘We can just take the best fibres we need, then it’s up to us to work with our production partners to make a good design and then produce it as quickly as possible.’
Once the frames and components are built, Canyon examines each one using an x-ray scanner to check for flaws.
‘In terms of what we do with our test labs and CT scanner, no other manufacturer works like we do. When we see quality levels have stabilised we drop down our own testing to 10% of each component, but in Asia they keep going for 100%.’
Not only does this process check the quality of components, but it also checks the quality of the checks themselves. ‘Each fork has a serial number, which we scan when we inspect the fork. That means the partner in Asia that’s done the same inspection can upload the same angle picture and share it with us. So we do
our inspection here and inspect their picture to see if the checks are being done correctly.’ The whole process is slick, meticulous and advanced – a far cry from the company’s beginnings in the back of a big blue trailer.
Gamble on success
‘You never have a clear picture of the future, but I had a plan 20 years ago that someday I wanted to have a global company,’ says Arnold as he thinks back to his early days. As a youth he was a keen racer, but the world of pro cycling was a little out of his grasp, especially considering his towering 6ft 5in stature. Instead he joined his father selling bike components from a blue trailer, which now sits by the door of the Canyon showroom, a physical relic from Canyon’s early days.
‘Of course I wanted to see my bikes someday at the Tour de France, and now we have achieved that,’ Arnold says with a smile. It wasn’t the easiest journey, though.
‘First we sponsored Team Unibet, which was a contract that lasted only half a year,’ Arnold says. Unibet was a betting company but after the team raced at the Tour of Flanders the ASO refused to invite them to races on French soil because of French laws on advertising gambling. ‘It wasn’t fair as the team had been licensed, but then it disappeared and two years later we started with Omega-pharma Lotto.’
That first taste of Worldtour pressure taught Canyon about the demands at the top of the sport. ‘The team complained about our timetrial bike,’ Arnold recalls. ‘We were new to the business and the team DS said, “I want you to change the bike. Just copy the Trek bike!” But of course we didn’t want to copy something, we wanted to understand the aerodynamics behind it.’ The consequence was the development of the Speedmax TT bike, now considered one of the fastest on the market.
It reveals one of the unique benefits of Canyon’s business model. The company doesn’t need to consider the retail viability of each product across thousands of stores, so it can produce items that might only be sold in
‘The team DS said, “Just copy the Trek bike!” But of course we didn’t want to copy something’
small quantities. It gives flexibility and the opportunity to develop innovative products.
If there’s a threat to Canyon’s model, it could be the possibility of being beaten at its own game by other e-commerce giants such as Wiggle-crc, many of whom are investing in their own bike and component brands.
‘You know, I was born in a small wine-making village,’ Arnold muses, in a roundabout response to that suggestion. ‘I would say Wiggle, Bike24, Chain Reaction are like the biggest retailers for wine. But we have our own vineyard,’ he chuckles. ‘We are manufacturers and I would say none of these guys are really into manufacturing. When you go to our factory, everything you see there is in place because we made the decision that we want to be a bike manufacturer.’
In which case, perhaps that’s where Canyon’s biggest challenge will come from. Rather than e-commerce companies building bikes, the threat will be big-brand manufacturers beginning to juggle direct-to-consumer savings with the conventional retail chain. Bringing us back to our first conversation of the day, it potentially leaves the small retailers with a troubling future.
‘There are still some bookstores here in Koblenz,’ Arnold says, once again addressing the issue from a tangent. ‘But 20 years ago there were 20 or 30 bookstores here. Now there are two. Now they’re doing things differently. They bring the authors in, they do what they can to foster the book society here in Koblenz, and they are good for the culture here. In the same way, I think in the end we will bring business to the small retailers and in the end we will foster a passion for cycling.’
It’s plain that Arnold’s passion for cycling, and for selling bikes, is undimished even after 17 years of painstakingly building the Canyon brand. It has come a long way from its blue trailer, and is showing no signs of slowing down any time soon. Peter Stuart is commissioning editor of Cyclist, which also operates a direct-to-consumer model (subscribe at cyclistmag.co.uk)
‘We will bring business to the small retailers and we will foster a passion for cycling’