Two MIT Sloan alumni have founded a firm that combines cutting-edge manufacturing techniques and a business model reminiscent of Dell Computer's build-to-order philosophy to produce customized motorcycles and other power sports products.
The firm, Rev!, initially will venture into the off-road motorcycle market, offering riders customized performance, ergonomics, and styling — all designed to complement their size, skill level, and styling preferences.
The alums, Rev! president and CEO Sean Hilbert and the company's COO Jamie Flinchbaugh, are both 1998 graduates of the Leaders for Manufacturing (LFM) program, a dual-degree program sponsored by MIT Sloan and the School of Engineering.
Hilbert and Flinchbaugh attribute Rev!'s business model development to what they learned in LFM classes.
“The most valuable lessons we learned from LFM weren't necessarily the specific ones, but the ones that relate to what ‘Big M’ manufacturing really means,” explains Hilbert. “For example, what has made Dell so successful, and why does that success seem to be so sustainable? Is it their manufacturing system? Is it their IT system?
“As it turns out, it's everything,” he continues. “Supply chain, product design, manufacturing system, distribution system, and customer interface all work in harmony to enable Dell to serve each customer individually. That's why Compaq can't copy what Dell is doing, and that's also what will give Rev! its advantage. In order to compete at this level, a company literally has to start from scratch.”
Hilbert notes that Rev! outsources items that could become plug-and-play components requiring substantial capital.
For example, Rev! will become the first major manufacturer of off-road motorcycles that will not build its own engine. Instead, it is sourcing its initial engine from TM Motori, headquartered in Pesaro, Italy.
Rev!, however, will retain control of parts and systems that can dramatically affect powertrain performance.
“The product's overall feel from the engine perspective is determined more by combustion chamber design, exhaust and intake system design, and control electronics,” says Hilbert. “We manage those variables and the design of the system very, very tightly.”
COO Flinchbaugh says Rev!'s business model is based on lean manufacturing and mass-customization principles — principles he learned from such MIT professors as Rebecca Henderson, Charlie Fine, Dan Whitney, and Alex Slocum.
By focusing on the link between the company and its customers, Rev! avoids putting waste into the system and focuses on delivering what the customer values on time and at the price they want.
Rev! recently debuted its products at the 2001 International Dealer Expo in Indianapolis.
Hilbert and Flinchbaugh both believe that while industry knowledge, entrepreneurial spirit, and technical capability are earned in the field, the LFM program provided critical strategic, tactical, and business skills necessary to turn Rev! into a reality.
“All of the aspects of ‘Big M Manufacturing’ are required if you want to radically transform an industry, from customer to supply chain and from the Board of Directors to the shop floor,” says Hilbert. “LFM and Sloan gave us the tools necessary for that journey.”
by Lois Slavin
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