Hornby cuts model shops' allocations of items due summer 2022

[wombatofludham]

I wonder if they might dust off their "Trains in Film" idea with a model based on the boat train for the "Titanic"?

What, too much?

[Chris M]

Hornby are due to be at The Great Electric Train Show on October 8th & 9th so folk may get a chance to express their views there. I just hope the Hornby Hobbies stand isn't next to my layout!

 

As an aside, with all this bad feeling I wonder if Hornby Magazine might be considering changing their name?

 

[The Stationmaster]

23 minutes ago, Matt C said:

 

 

Left Arm. . . . . . . .Right Arm. . . . . .big empty space in the middle. Until someone did the figures and realized you can't keep taking orders and sell 500  models direct (1000...?)  And Also supply 500 Models to your retail outlets, when you've only ordered 500 in the first place

Except that it is all the same arm - marketing (unless Hornby has a rather unusual organisation?). Marketing decides how many it wants for what it has assessed as the size of the market and to hopefully cover as much as possible of costs set against a reasonable retail price level).  Total ordered = X000.  Marketing then 'sells' to the retail trade, l.e. accepts orders for,  up to a particular number of whatever part of X000 it has not allocated to direct sales.

 

All very simple although getting the initial number right means you really need to understand your market and even then you might get it wrong (e.g. increasing the size of run for the lilac Bulleid pacific in the light of market take up).  But you will know how many you have ordered therefore that is the maximum number you can 'sell' (less, perhaps, a small surplus to cover problem returns).  If you can't get that bit right then something, somewhere, in your marketing dept, is definitely going wrong.

[PaulRhB]

55 minutes ago, JohnR said:

? If Hornby knew they had more orders from shops than they could fulfil, why did they not say so back in January when those orders were placed with them?

A question several of us have been asking for the last five or so years when they’ve done it time and again. Started with the Pecketts in 2016/17 ish, same happened with W1’s, APT etc.
It’s either continual failure to manage supply or disruptive policy!

[The Stationmaster]

3 minutes ago, PaulRhB said:

A question several of us have been asking for the last five or so years when they’ve done it time and again. Started with the Pecketts in 2016/17 ish, same happened with W1’s, APT etc.
It’s either continual failure to manage supply or disruptive policy!

Or sheer incompetence.

[mdvle]

1 hour ago, JohnR said:

 

I would say it was a reasonable and logical explanation for what has happened. Why else cut the supply of pre-ordered items now to shops? And by such large amounts? If Hornby knew they had more orders from shops than they could fulfil, why did they not say so back in January when those orders were placed with them?

 

Note that no other model manufacturer is having an issue supplying what has been ordered, and no one in the US hobby is having problems supplying what has been ordered.  That is a pretty good indication that the problem isn't China supplying too few product.

 

This is a uniquely Hornby issue and isn't (as noted by others) unique to this year.

 

 

[HExpressD]

12 minutes ago, mdvle said:

 

Note that no other model manufacturer is having an issue supplying what has been ordered, and no one in the US hobby is having problems supplying what has been ordered.  That is a pretty good indication that the problem isn't China supplying too few product.

 

This is a uniquely Hornby issue and isn't (as noted by others) unique to this year.

 

 

Hattons Genesis Coaches.

 

That is all...

[Steamport Southport]

21 minutes ago, mdvle said:

 

Note that no other model manufacturer is having an issue supplying what has been ordered, and no one in the US hobby is having problems supplying what has been ordered.  That is a pretty good indication that the problem isn't China supplying too few product.

 

This is a uniquely Hornby issue and isn't (as noted by others) unique to this year.

 

 

 

Aren't they?

 

Might want to look at Bachmann. Even the free wagon for the Collectors Club is delayed.

 

 

 

Jason

[JohnR]

24 minutes ago, mdvle said:

 

Note that no other model manufacturer is having an issue supplying what has been ordered, and no one in the US hobby is having problems supplying what has been ordered.  That is a pretty good indication that the problem isn't China supplying too few product.

 

This is a uniquely Hornby issue and isn't (as noted by others) unique to this year.

 

 

 

And even if no other manufacturer is getting these problems, doesnt mean its not happening. If you're a chinese factory, and you lose a production slot or two because Covid takes out half your workforce, you can just say to all your customers "We're going to cut everyones production by 10%". They will be making decisions as to which orders they prioritise. 

 

Do Hornby still use Sanda Kan? I wonder whose order they would prioritise in that situation?

[mdvle]

13 minutes ago, HExpressD said:

Hattons Genesis Coaches.

 

That is all...

 

3 minutes ago, Steamport Southport said:

Aren't they?

 

Might want to look at Bachmann. Even the free wagon for the Collectors Club is delayed.

 

Except we aren't talking about delays - we are talking about an inability to actually supply sufficient product to cover retailer orders.

 

Hornby is indeed unique in the inability to supply their retailers with product that was confirmed orders only months ago.

[mdvle]

2 minutes ago, JohnR said:

And even if no other manufacturer is getting these problems, doesnt mean its not happening. If you're a chinese factory, and you lose a production slot or two because Covid takes out half your workforce, you can just say to all your customers "We're going to cut everyones production by 10%". They will be making decisions as to which orders they prioritise.

 

If you are the Chinese factory you simply (which their is abundant circumstantial evidence for) delay delivery dates to reflect the extra time required to fulfill the order with the capacity you have.

 

And note that the "37 confirmed items cut to just 1" isn't a 10% reduction...

 

So no, this isn't something that can be blamed on China.

[Dunsignalling]

2 hours ago, Graham_Muz said:

 

Except it is not a reasonable or logical explanation, I can assure you that a factory does not accept a Purchase Order for 'x' amount and then decide to only make 'y' They will make what is ordered and paid for...

The degree of cuts to retailer orders begs the question as to whether Hornby is nowadays capable of financing the size of production runs that it could sell. Or have they become so wary of over-production that it's broken their system?  

 

One of the "new boys" recently revealed their estimate of what they consider a "viable" production batch, and that number was a multiple of what Hornby typically seem to have been putting out in recent times. They announce a cut-off date for consumer and retailer pre-orders, before finalising production arrangements.

 

If Hornby won't risk bigger runs and can't fulfil demand with what they are commissioning, maybe it's time for them to go down the same route? 

 

TBH, Hornby supply got very erratic (to put it mildly) at the time of their last near collapse, and hadn't improved much when the retailer through whom I regularly pre-ordered, shut up shop a couple of years ago.

 

All but one of the few I placed elsewhere since have been fulfilled; four coaches and two non-mainstream locos. The remaining item that hasn't, I'll probably buy if I come across one casually but if H can't be arsed to make enough, I can't be arsed to work at giving them money.

 

At present, Hornby have little in the pipeline that I want; just one loco on direct pre-order, and that a "nice-to-have" rather than a "burning desire", so I can afford to be pretty relaxed about it.

 

However, with all the (very able) up-and-coming competitors around, Hornby need to be careful. Times are getting hard and It'll be easy to find other places to spend what discretionary income remains after paying more for essentials....

 

John

Edited July 5, 2022 by Dunsignalling

[newbryford]

2 hours ago, Chris M said:

 

 

As an aside, with all this bad feeling I wonder if Hornby Magazine might be considering changing their name?

 

 

What to:

Inspired by Hornby Magazine?

[64F]

8 minutes ago, newbryford said:

 

What to:

Inspired by Hornby Magazine?

 

"Not Affiliated With Hornby Magazine"?

[Steamport Southport]

22 minutes ago, mdvle said:

 

 

Except we aren't talking about delays - we are talking about an inability to actually supply sufficient product to cover retailer orders.

 

Hornby is indeed unique in the inability to supply their retailers with product that was confirmed orders only months ago.

 

So a delay isn't an inability to supply an item?

 

I really am puzzled by your response. We ARE talking about delays.

 

If we weren't, where's my Hornby 2MT? Or my Bachmann G5 I've been patiently waiting four years for....

 

 

Jason

[HExpressD]

I'd like to know what the state of play is with the Tier 1 retailer exclusive Drax wagons which were announced, as these presumably aren't being sold on Hornby.com I would assume that the allocations for these haven't been changed?

[Chris M]

34 minutes ago, JohnR said:

 

And even if no other manufacturer is getting these problems, doesnt mean its not happening. If you're a chinese factory, and you lose a production slot or two because Covid takes out half your workforce, you can just say to all your customers "We're going to cut everyones production by 10%". They will be making decisions as to which orders they prioritise. 

 

Do Hornby still use Sanda Kan? I wonder whose order they would prioritise in that situation?

But with batch production there are set up costs that have to be covered by the revenue from the production run. If you reduce the batch size by 10% you could well be wiping out your profit on that batch. Set up costs include getting a list of parts required, ordering all the materials and agreeing prices. Setting up work areas for any in house manufacturing, getting the tooling in the right place at the right time and setting up an assembly area with the right instructions. All this takes time and therefore costs money. A manufacturer can’t afford to make smaller batch sizes than agreed without changing the selling price.

[John M Upton]

Yet Hornby seem to be having no problems whatsoever turning out loads of Coca-Cola and football club branded tat which their social media feed keeps bombarding me with advertising for in the last couple of weeks. 

[HExpressD]

2 minutes ago, John M Upton said:

Yet Hornby seem to be having no problems whatsoever turning out loads of Coca-Cola and football club branded tat which their social media feed keeps bombarding me with advertising for in the last couple of weeks. 

My understanding of the football stuff is that it's a sort of commission thing, hence why it's not on the Hornby website, I don't think they can be dragged for that as they seemingly recognise it's not for their core customers

[Graham_Muz]

43 minutes ago, HExpressD said:

I'd like to know what the state of play is with the Tier 1 retailer exclusive Drax wagons which were announced, as these presumably aren't being sold on Hornby.com I would assume that the allocations for these haven't been changed?

 

Allocations of these items have changed at least twice, as far as I am aware, and neither the original or revised allocations get anywhere close to meeting demand.

[Graham_Muz]

50 minutes ago, Steamport Southport said:

 

So a delay isn't an inability to supply an item?

 

I really am puzzled by your response. We ARE talking about delays.

 

If we weren't, where's my Hornby 2MT? Or my Bachmann G5 I've been patiently waiting four years for....

 

 

Jason

 

The topic in question is the inability to supply quantities to meet a known demand i.e. already undernourished retailer allocations (and therefore a known demand) and such allocations being repeatedly reduced to retailers.

This issue is separate to any delay in any amount of product actually appearing.

[mdvle]

1 hour ago, Steamport Southport said:

So a delay isn't an inability to supply an item?

 

If it eventually arrives, no.

 

1 hour ago, Steamport Southport said:

I really am puzzled by your response. We ARE talking about delays.

 

No, per the thread title and the original post we are talking (again) about Hornby notifying retailers months after orders were confirmed that the retailer won't be getting what they ordered - specifically in this case about how the retailer whose message to the customer started this where their confirmed order of 37 items has been cut to just 1.

 

That isn't a delay - that is a you simply aren't getting the stock you ordered.  Or note the report of another retailer who has had "over £88,000 of cuts from his preorders" by Hornby (top post on 2nd page).  Again, not delays.

 

 

[Dunsignalling]

47 minutes ago, JohnR said:

 

And even if no other manufacturer is getting these problems, doesnt mean its not happening. If you're a chinese factory, and you lose a production slot or two because Covid takes out half your workforce, you can just say to all your customers "We're going to cut everyones production by 10%". They will be making decisions as to which orders they prioritise. 

 

Do Hornby still use Sanda Kan? I wonder whose order they would prioritise in that situation?

Hornby stopped using Sanda Kan after it became part of Bachmann's parent company.

 

Two questions:

• If this issue could be laid at the door of the factories in China, why haven't others had to do the same?

• If it's just a raft of delays, why hasn't Hornby told the retailers that?

No, either Hornby has taken retailer orders for far greater quantities than they have ordered from the factories, or for far more than the factories are able to fulfil because of commitments to others made before Hornby tried to book production slots.

 

Whichever is the case, It's a Hornby issue, and probably rooted in Hornby's continued adherence to an annual "big bang" set of announcements that force them into taking orders they have no way of knowing they can honour.

 

Hornby was able to adjust quantities in the light of orders exceeding initial estimates when they actually made things themselves. Now they are reliant on production capacity that is contractually shared between a number commissioners, decisions have to be far more fixed in advance. Hornby is "just one of the crowd", and the way they interface between those they supply and those who supply them may well be problematic.  

 

John

 

 

[LimboBrit]

37 minutes ago, Graham_Muz said:

inability to supply quantities

Or unwillingness?

[andyman7]

The whole Hornby supply issue saga has been running for years now - dating back initially to around 2011/12 and iterating through different phases and management structures. 

 

Anyone that knows the history of the Hornby/Triang companies will know that there has never been continuous 'golden age' where product was announced and made, profits were sustained and everything was hunky-dory. Indeed I have to bite my tongue every time someone goes on about how this would never have happened at Binns Road - given that Hornby Dublo spectacularly failed to compete with Triang, tried to manage two separate incompatible model railway ranges by perpetuating both 2 and 3 rail, and gave up the ghost in 1964 leaving a mountain of unsold warehouse stock, some of it dating back years.

 

Triang themselves then failed to manage and maintain an increasingly diverse range of products and collapsed in 1971. The next owners - Dunbee-Combex-Marx - gave us Hornby Railways, with glowing shiny engines like Lord Westwood and bright red station buildings to appeal to the toy market, which resulted in Airfix and Palitoy exploiting the gap for more detailed models, eventually forcing Hornby to up its game. Dunbee-Combex-Marx  collapsed in 1980 as part of the great toy empire implosion of the early 80s, which is where Hornby Hobbies came in, the current company albeit one owned by a variety of major shareholders since. They barely survived the 80s and 90s, diversifying into toys and games because the Model Railway and slot car market had contracted so much, before moving all production to China in 1998 and beginning what was probably the most sustained successful period of its existence. Low cost seemingly inexhaustible manufacturing capacity in China coincided with lots of nicely well off 50-somethings reliving their childhood with endless versions of BR 1950s/60s  items.

 

Since the financial crash of 2008 all has not been well with this supply model - Covid shocks really just being the latest and greatest shock. Whilst Hornby are not a mega-corp, they are one of the larger and diversified hobby companies, and anyone can see that the group as a whole has not been sustainably profitable for many years. This is the root cause of pressures to address the issues, and I'm afraid that armchair analysis by model railway enthusiasts who just look at their own preferences does not really help to solve the problem. 

 

From what I can observe, there are two fundamentals at play, one affecting all manufacturers; and one that is specific to Hornby. The one affecting everyone is the supply-chain crisis and attendant inflation. The smooth, well-oiled machine that delivered just in time cheap as chips gear from China is well and truly b*ggered up at the moment; and indeed like other historical world events have proved it is unlikely to ever go back to the period of the late 90s and 2000s; this means that the relative cost of fine scale models will increase; and there will be longer lead times and less product. 

 

The one affecting Hornby specifically appears to be the long-run effect of trying to drive out discounting. Put simply, if I am restricted to making x of something by supply chain issues; and I know I can sell the whole production batch without leftovers, why am I giving intermediaries a cut of the profit when I need every last penny of it to survive. It's the last bit that suggest a company that is under stress, because the need to maximise returns outweighs the need to maintain cordial relations with the retail supply chain.

 

I have great sympathy with retailers caught in the middle of this, and personally have chosen to continue buying from them whenever possible. But I have to admit that some of the reaction and comments do seem out of all proportion to the actual situation. If Hornby do not eventually get this right they will go to the wall (and, no doubt, the name will pass to yet another custodian). Meantime, there is a highly competitive market out there that, despite world events, is still delivering more variety, detail and accuracy than ever before in my lifetime. I certainly can't see running out of things to tempt me, whatever happens.