Hornby model shop Tiers system

[Dunsignalling]

10 minutes ago, Steamport Southport said:

 

They'll be gone by Christmas if they follow that route.

 

So where are they getting a few thousand trained warehouse pickers to work in their distribution centre demanding £25 an hour at London and South East rates...

 

Even Amazon is struggling to recruit them since all the cheap foreign workers went back to eastern Europe.

 

 

Jason

What's to say they couldn't locate their distribution centre in Eastern Europe.

 

In a non-EU country of course.....

 

John

[Oldddudders]

1 minute ago, Dunsignalling said:

What's to say they couldn't locate their distribution centre in Eastern Europe.

 

In a non-EU country of course.....

 

John

Belarus, perhaps?

[Dunsignalling]

Just now, Oldddudders said:

Belarus, perhaps?

I wondered who'd get to that first.

[jonnyuk]

9 minutes ago, Legend said:

 

But I wouldn't have got there in the first place 

 

Firstly I'd have made sure that I had production capacity to support my product launch .  If I couldn't then I'd have had to have scaled back that launch .  Now knowing what capacity I had I'd offer it to retailers . Knowing that the big boys could swamp me with demand , meaning no one else gets anything , if Hattons took say 30% of my trade last year I'd award them 30% of what I'm offering this year . I wouldn't sell all my capacity , maybe 80% leaving some contingency . Retailers would know at point of range release how much they could order , I would confirm their orders , they could go onto offer that to their customers .   Its really what everyone else does . Not difficult . 

so your assuming Hornby who have been in this game for a very long time don't know how to do this, intentionally got it completely wrong in your eyes and screwed over all retailers on purpose (well one of the big ones mostly and i acknowledge this might of hand some pre-planning).

I for one think Hornby have at least tried to do the right thing, if you invest in your shop, your employee skill sets and run well oiled shop that is on sound footings you will be rewarded with first dibs on the biggest brand in the industry (notice i said brand). If your always playing dare with going bust then i'm afraid it does not matter what Hornby do, eventually it will happen. Look at the high street, lots of brands/shops that were on their knees have gone, it was only a matter of time because they were/are rubbish.

 

I really don't see all the froth, we all have our go to shops, we all say lets support our local model shops so lets do that.

Lets see what the range 2022 brings, this might just work and we have to take the last couple of years on the chin.

 

[Legend]

1 minute ago, Phil Parker said:

 

Since those decisions were made at least 2 years ago, I'm curious to know how you would have predicted the effects of Covid. I understand that demand for some products has gone through the roof thanks to lockdown.

 

I would have completely failed to predict Covid . 

 

But thats irrelevent . They only had a certain production capacity and thats the key point .  You cant oversell that .  With the impact of Covid  you could go back and try to organise more capacity , but that would be tricky . 

[phil-b259]

6 minutes ago, Dunsignalling said:

What's to say they couldn't locate their distribution centre in Eastern Europe.

 

In a non-EU country of course.....

 

John

 

That might be a bit tricky.

 

The only 'Eastern European' countries which aren't in the EU are Belarus, Ukraine and Russia, Serbia and Montenegro.

 

Given two out of the five are headed by dictators in all but name and under Sanctions for their behaviour while the third is country partly under illegal occupation you don't have much choice.

 

Edited May 25, 2021 by phil-b259

[Dunsignalling]

26 minutes ago, Steamport Southport said:

 

They'll be gone by Christmas if they follow that route.

 

So where are they getting a few thousand trained warehouse pickers to work in their distribution centre demanding £25 an hour at London and South East rates...

 

Even Amazon is struggling to recruit them since all the cheap foreign workers went back to eastern Europe.

 

 

Jason

That's why I included the word "eventual". 

 

Of course, they could always outsource such an operation to a large box-shifter that's already very good at that sort of thing and is located outside the South East....

 

John

Edited May 25, 2021 by Dunsignalling

[Trains4U]

I'm pleased that Hornby have released this.  It takes a degree of pressure off in terms of having to explain things (or not) to customers.

But I would like to head off any "The retailers should have known" responses...

Hornby did issue a statement about Tier systems back in late January (After the previews) - However, this was very much geared towards the level of support that Hornby will provide (such as frequency of rep visits, access to point of sale materials, inclusion in advertising etc).  There was no mention at all of ordering restrictions, and whilst it seemed it would have an impact on some retailers, particularly the smallest or online only in terms of manufacturer support, it didn't represent a significant change (to us at least).

The information on page 1 of this thread is entirely new and is exactly how we retailers received it at the beginning of May.   It is a significant addendum to the tiering system described in January and came as a bit of a shock.  

This communication was received well after (And probably in response to) the order amendments, cancellations and subsequent furore that erupted over the early may bank holiday.

None of us were aware of this detail, the rationale behind it or the full implications before the 4th May.

Edited May 25, 2021 by Trains4U

[phil-b259]

7 minutes ago, Legend said:

 

I would have completely failed to predict Covid . 

 

But thats irrelevent . They only had a certain production capacity and thats the key point .  You cant oversell that .  With the impact of Covid  you could go back and try to organise more capacity , but that would be tricky . 

 

The point is that when Hornby take orders they do so before anything has actually been made.

 

They are effectively gambling that there will be no untoward interruptions in the supply chain.

 

As such, if problems come along AFTER that allocation has been made then cuts are going to have to be made.

 

Yes Covid was 'known about' when the 2020 / 2021 range was being decided but at the time decisions were made as to how many models the supply chain could deliver there was enormous uncertainty as to how things would pan out in recovering from the pandemic

 

If a factory turns round and says to Hornby then there is sod all Hornby can do about it as complaints, particularly given how the ruling Communist party doesn't tolerate Western companies bad mouthing the nation.

Edited May 25, 2021 by phil-b259

[newbryford]

5 minutes ago, Legend said:

 

I would have completely failed to predict Covid . 

 

But thats irrelevent . They only had a certain production capacity and thats the key point .  You cant oversell that .  With the impact of Covid  you could go back and try to organise more capacity , but that would be tricky . 

 

They have shown that they can repurpose that production at relatively short notice.

For the very worthwhile cause that was Capt Tom Moore................

[jonnyuk]

3 minutes ago, phil-b259 said:

 

The point is that when Hornby takle orders they do so before anything has actually been made.

 

They are effectively gambling that there will be no untoward interruptions in the supply chain.

 

As such, if problems come along AFTER that allocation has been made then cuts are going to have to be made.

 

If a factory turns round and says to Hornby then there is sod all Hornby can do about it as complaints, particularly given how the ruling Communist party doesn't tolerate Western companies bad mouthing the nation.

Given Hornby's struggles i wonder if they wanted to ensure everything made was allocated and sold so they no stock sitting on selves just in case, if your struggling would you want 20% of your stock sat in a warehouse just in case you had supply issues?

 

this is a question, i'm not taking a pop by the way

Edited May 25, 2021 by jonnyuk

[Pete the Elaner]

2 minutes ago, Legend said:

 

I would have completely failed to predict Covid . 

 

But thats irrelevent . They only had a certain production capacity and thats the key point .  You cant oversell that .  With the impact of Covid  you could go back and try to organise more capacity , but that would be tricky . 

 

Covid not only reduced production capacity but it also increased demand, which Hornby mentioned in their statement.

We've seen from other manufacturers that production slots are booked months in advance. All manufacturers run at maximum so increasing production means the next model in turn is delayed further.

It costs money to hold stock. While over-producing is good for the customer, it is something the manufacturer wants to avoid.

[phil-b259]

1 minute ago, jonnyuk said:

Given Hornby's struggles i wonder if they wanted to ensure everything made was allocated and sold so they no stock sitting on selves just in case, if your struggling would you want 20% of your stock sat in a warehouse just in case you had supply issues?

 

this is a question, i'm not taking a pop by the way

 

You accountants might have something to say about that...

 

The modern business model is a 'just in time approach' and NOT keeping things sat in warehouses as that represents money which could better be used for other things!

 

Its the same with spares - keeping a large inventory is a waste of money, far better to offer the odd refund and bin faulty items than provide the means to repair them.

 

Remember all those empty sheaves at the beginning of the pandemic in supermarkets - well part of that is because such stores RELY on getting nightly deliveries rather than big stockrooms so if the shelves get stripped bare they have to wait till that nights delivery shows up and hope its got enough (and it inevitably won't because its a 'top' up delivery not a entire stores worth of stuff).

 

 

[berwicksfinest]

I am sure we can remember in the 1;1 railway world when EWS told Royal Mail what service they were going to provide them like it or not what service they were going to provide. what happened.

 

Personally speaking I have rang Hornby asking about spares for my Class 60, the young lady came across as not really bother, nothing she could do nor suggest. Tier 3 for Hornby!!

 

And dare I rekindle the Cavalex Class 91 debate whereby Hornby over ruled the little guy, Exactly what Hornby are accusing Hattons of doing !!

 

As for Mr Kohler, personally i have no time for him, he comes across as very nice yet its my way or the highway.

 

End result everyone seems to lose. Shame 

[LimboBrit]

29 minutes ago, Phil Parker said:

 

Since those decisions were made at least 2 years ago, I'm curious to know how you would have predicted the effects of Covid. I understand that demand for some products has gone through the roof thanks to lockdown.

Is it fair to use that as an excuse for reallocation leading to the cancelling of pre-orders placed before COVID-19 reared its ugly head as I believe has happened?

[phil-b259]

1 minute ago, berwicksfinest said:

I am sure we can remember in the 1;1 railway world when EWS told Royal Mail what service they were going to provide them like it or not what service they were going to provide. what happened.

 

 

 

Yup

 

However EWS didn't go crawling to Royal Mail asking them to come back - in fact quite the opposite as the demise of postal traffic meant they didn't need to worry about replacing the Mk1 stock.

 

Similarly Royal Mail didn't come back to the railway 6 months later saying 'we have made a terrible mistake' - in fact they said it had actually saved them money as trucks / planes were working out more efficient.

 

When royal mail did come back to the railways it was in a very limited seasonal form for parcel traffic - so its still the case that the decisions both parties made have worked out fine.

 

I suspect that Hornbys decision will have zero effect on their return to profitability or the volume of models they sell and in years to come they will regard it as the right move to make.

 

 

[berwicksfinest]

4 minutes ago, phil-b259 said:

 

Yup

 

However EWS didn't go crawling to Royal Mail asking them to come back - in fact quite the opposite as the demise of postal traffic meant they didn't need to worry about replacing the Mk1 stock.

 

Similarly Royal Mail didn't come back to the railway 6 months later saying 'we have made a terrible mistake' - in fact they said it had actually saved them money as trucks / planes were working out more efficient.

 

When royal mail did come back to the railways it was in a very limited seasonal form for parcel traffic - so its still the case that the decisions both parties made have worked out fine.

 

I suspect that Hornbys decision will have zero effect on their return to profitability or the volume of models they sell and in years to come they will regard it as the right move to make.

 

 

Exactly very rarely the customer likes being told what to buy and how to do it

[Legend]

13 minutes ago, jonnyuk said:

Given Hornby's struggles i wonder if they wanted to ensure everything made was allocated and sold so they no stock sitting on selves just in case, if your struggling would you want 20% of your stock sat in a warehouse just in case you had supply issues?

 

this is a question, i'm not taking a pop by the way

 

No fair enough question Jonny .  The 20% figure was picked out by me as an example  . You are correct ideally you would want to sell all your stock . However I think its probably prudent given the variability of the the supply chain that you wouldn't sell all the way up to the quantity promised to you . The contingency may only be 5% but that's something only Hornby know ( or should know) . When I contracted with China for commodities the contract usually stipulated +/- 5% . I pay for the exact quantity supplied but if ordering 10,000 the supplier can send me anything from 9500 units to 10500 units and call the order closed .  Things can happen in manufacturing so there has to be some tolerance built in .   

[Pete the Elaner]

1 minute ago, berwicksfinest said:

 

As for Mr Kohler, personally i have no time for him, he comes across as very nice yet its my way or the highway.

 

 

Hornby were making big losses before they re-employed him (& probably others) to turn this around, so of course they will do things his way.

Would you employ someone to make major changes then ignore their suggestions?

 

The most high-profile example is in Formula 1: Ferrari had won nothing for 13 years so in 1993, they employed Jean Todt. He was the first foreigner to run the team & it took him 7 years to rebuild it into a winning team by doing things "his way", (employing Ross Brawn & Michael Schumacher in the process).

This caused friction with senior management, who liked to keep control, so after 6 championships in 8 years, they parted ways...& reverted to their previous habits of employing Italians, retaining control & winning nothing.

[Steamport Southport]

18 minutes ago, Dunsignalling said:

That's why I included the word "eventual". 

 

Of course, they could always outsource such an operation to a large box-shifter that's already very good at that sort of thing and is located outside the South East....

 

John

 

Yep. That was kind of my point.  

 

If you send it all to the large retailers then you don't need loads of people picking at full rates of pay. Picking is very labour intensive and time consuming. It's also a skilled job (contrary to what those who have never done it would think). The large warehouses have a high rate of staff turnover as it's such a difficult job and stressful. 

 

100 boxes of J15s to Hattons. 100 boxes of J15s to Kernow. etc. Easy.

1 pack of track pins. 1 pack of scatter material.  Then another hundred similar orders. Difficult.

 

 

Jason

[phil-b259]

6 minutes ago, berwicksfinest said:

Exactly very rarely the customer likes being told what to buy and how to do it

 

Indeed. But sometimes it pays to ditch customers that are perceived to be a burden.

 

I repeat some of EWS management / financial people were actually quite glad to get shot of the mail business - but didn't want to be seen as the party which gave it the chop.

 

I can easily see Hornbys accountants or bankers saying 'ditch the small retailers who only order stuff in dribs and drabs - that takes up a disproportionate am mount of time. make sure the people you order put in big orders across our portfilo of brands' yet being unwilling to say that in public. Instead they direct Hornby to come up with a strategy which does the same but sounds better (i.e. neat and tidy premises, etc)

 

 

Edited May 25, 2021 by phil-b259

[adb968008]

1 hour ago, Simon Lee said:

Or you could try 

 

www.modelbahnunion.com 

 

Not far from the border and the have comprehensive stocks of Hornby, Bachmann and now Heljan

 

 

 

 

 

+1 from me on that to.

ive ordered both EU to EU and EU to UK (tax removed) this year already, and his prices are competitive, and covers quite a good UK range too.

if its sold out here, the shop is a useful last resort !

 

[adb968008]

56 minutes ago, Dunsignalling said:

What's to say they couldn't locate their distribution centre in Eastern Europe.

 

In a non-EU country of course.....

 

John

Or direct from the factory in China, VAT paid ?

[JSpencer]

16 minutes ago, phil-b259 said:

I can easily see Hornbys accountants or bankers saying 'ditch the small retailers who only order stuff in dribs and drabs - that takes up a disproportionate am mount of time. make sure the people you order put in big orders across our portfilo of brands' yet being unwilling to say that in public. Instead they direct Hornby to come up with a strategy which does the same but sounds better (i.e. neat and tidy premises, etc)

 

 

 

That should help create more model shops. Either you start with 200K of stock in a lovely big shop and be a tier 1 from day 1 or you start very small and get a very limited amount of what we offer eternally. They will probably push most start ups into tier 3 manufacturing directly themselves.

[Darius43]

17 minutes ago, phil-b259 said:

 

I can easily see Hornbys accountants or bankers saying 'ditch the small retailers who only order stuff in dribs and drabs - that takes up a disproportionate am mount of time. make sure the people you order put in big orders across our portfilo of brands' yet being unwilling to say that in public. Instead they direct Hornby to come up with a strategy which does the same but sounds better (i.e. neat and tidy premises, etc)

 

 

You mean big ordering retailers like Hattons and Rails of Sheffield.

 

Oh wait…

 

Darius