The Royal Mail Bicycles Procurement Story – Myth, Misguided or Masterful?

Did you know the Royal Mail procurement function saved millions by buying cheaper bicycles? Yes, the organisation used to buy these really expensive models from the UK, with a very particular specification – some £350 a time (actually, we've seen even higher figures quoted).

But because of good work from procurement, they managed to get the price down to just £50 a time, saving a fortune. Sourced from China, of course.  It must be a true story - this is what the BBC website said when writing about the savings track record of an Royal Mail ex-CPO during last year’s high-profile employment tribunal:

“This was partly achieved by procuring delivery bikes for postmen from China at £45 each, rather than paying £360 per bike in the UK”.

Hang on a minute, that can’t be right. Here is Supply Management in a recent article featuring another ex-Royal Mail procurement executive:

“…. his team saved in the region of £300m over three years. “It’s not always the biggest deal; sometimes it’s the thing that demonstrates lateral thinking and creativity,” he says. “The phrase ‘we’ve always done it like that’ is a dangerous thing.” He gives the example of the bicycle used by postal delivery workers: “It was specified to the nth degree – the gears, the tyres, the braking distance… As a result, it cost £300 a bike, when you could buy a higher quality one from offshore for about £50. That was a real symbol of what we were trying to do…”

But I’m sure I can remember another Royal Mail CPO claiming credit for the bicycle savings? Oh well, what’s that old expression – a good idea has many fathers?

Yet the paradox is this. Perhaps it wasn’t that smart an initiative anyway. The European Commission has pursued anti-dumping regulations against China for some years now, claiming unfair subsidies are given to their bicycle manufacturers. Meanwhile, what did taking the business away from a UK manufacturer do for local UK industry? How many bicycle makers ended up on benefits, costing the taxpayer millions?

And were the Chinese bicycles made to the highest ethical standards; are we sure there was no “modern slavery” involved, for instance school children forced to work during their holidays (as we know has happened in their electronics industry).

Yet a quick bit of Googling throws up another interesting question – did Royal Mail ever really buy bikes from China? Because cycles were phased out from 2009 to 2014 in favour of a combination of vans, hand-pulled trolleys (made in China?) and shoe-leather.  So if procurement did put a lot of time and effort into re-specifying and sourcing bicycles from China, was that actually a waste of time and money in the end?

Anyway, the Royal Mail bicycle story has clearly earned its place in procurement mythology. But who was responsible and whether it was a fine bit of work, misguided or just a waste of time remains a bit of a mystery.