Baltik Vairas Turned Future Proof with Focus on Time-To-Market

At the end of 2018 Baltik Vairas announced some great financial results with an increase in revenue by around 60%.  As revenue hit around €60million, the company celebrated its 70th anniversary with an increase of 52% in the number of assembled units, a total of 275,000.

 Zilvinas Dubosas, the CEO of Baltik Vairas is looking at a positive start for 2019 as more and more brands look for production outside Asia and look increasingly towards North Eastern Europe. 

He states that because their forecasts are based on long-standing customer commitments they are sure 2019 is going to be good for the company. Not only that, but they are able to increase the production of bicycles continuously and have a good, solid export market.  Around 99% of output in 2018 was exported to markets within Western Europe..

As revenue is expect to expand to around  €75 million euros the company also has plans to invest in other areas of the company such as IT, digitalization, production, and personnel management.   The increasing demand for  electric bicycles has led to a heavier focus on innovation.   Baltic Vairas now manufactures speed pedelecs as well as the more traditional e-bikes with front-hub, rear-hub and mid-drive motors.  In 2018 e-bike production rose 60% and this is expected to double in 2019, necessitating the addition of another assembly line.

Rapid growth thanks to Lean management principles

Lean management system was developed at the Toyota Corporation and has become increasing more popular world wide.  Baltik Vairas started to introduce the system 3 years ago.  Initially this has meant standardizing the work at assembly line level along with the introduction of  5S and Kaizen practices.  Baltik Vairas is now considered by business experts as one of the best companies in Lithuania in terms of implementation of processes and organising the workspace.  Since Lean Management was implemented the employees have been more interactive, submitting over 1000 suggestions for ways the workspace, process and safety can be improved.

It all started 3 years ago with the formation of the Baltik Vairas dream team.  This was a new team of management who had gained experience from industries outside of bicycle production and brought together the best of their knowledge and practice.  Nothing was ruled out.  Even the most radical ideas were heard, and the team fully trusted each other to work for the benefit of the whole.  A good example of how they learnt from other industries was the decision to implement digital project management software.  In order to speed up deliveries, the company looked at production from the point of view of project management.  All departments were linked by a common goal, there were milestones and deadlines agreed and the departments mutually supported each other to achieve these. They can now see that this is paying off – the growth has been so rapid, and the figures speak for themselves. 

Production lines have been  digitalized with 80% of the workspaces now having digital screens which are used to show training videos on bicycle assembly as part of the training of new employees and for the more experienced people information on more advanced assembly technique.   Žilvinas Dubosas has been pleased with the outcome seeing an increase of 20% in employee productivity.  The main reasons for downtime were highlighted and shortened, with assembly times down to as little as 62 seconds in some cases.

He has also experienced a reduction in the number of employees needed on the line.  As numbers have fallen by one tenth, productivity has increased by almost a sixth – an increased output of 15% and a reduction in people of 10%.  At present there are 500 employees, with the  number rising to 600 at peak times.

Faster time-to-market and seasonality problems

Product development remains one the organisation’s priorities and it is looking to continually improve the speed from idea through to the completed product.  The company has managed to reduce development times by 6 months.  It is likely that in 2019, the introduction of new technology such as 3D simulation and printing, will see the time frame reduced by another third.   Baltik Vairas has also managed to resolve the issue of seasonality where production volumes differed by around 250% between the peak and non peak times.  The current fiscal year started on 1st October 2018, since then, in the first quarter they have increased production by 107% compared to the same period in 2017.  It is expected that by the end of the current fiscal year the company will see a revenue growth of a minimum of 25%.

Baltik Vairas in numbers:

Daily factory output:  Over1500 new bicycles.
Exports: 93% of all output goes to Western Europe;  Germany, Denmark, Austria, Belgium and the Netherlands
Models:  Around 2000 models.  Manufacturing takes place on 6 production lines.
Digitalization:  Over 80% of workspaces are now digitalized.
Assembly times:  Complex bicycles around 82 seconds, electric bikes around 150 seconds.
International links:  Up to 3 visits a week from international delegations.