IV. OPERATIONS

“RE-MANUFACTURING” THE LIFECYCLE OF A RECYCLE-A-BICYCLE BIKE

Materials Donation: Recycle-A-Bicycle promotes reuse and recycling of bicycles. Over 1,000 used bicycles are collected annually. Eighty percent (80%) of donations come from bike shops and apartment building superintendents, with the remainder collected from individuals and corporate donors. Bike shops and apartment buildings are the most prevalent source because bikes are often abandoned at these locations. Donation saves the cost of disposal and provides a tax deduction. Additionally, individuals who want to support Recycle-A-Bicycle’s mission bring in bikes, parts, and accessories. There are also several reputable volunteers who collect bikes in their neighborhood on garbage night and deliver them to our facilities. Finally, corporations organize employee collections and one bike manufacturer, Fuji, donates surplus inventory to the project. The organization will collect twice the number of bicycles when greater storage, production and transportation capacities are available.

Demanufacturing process / remanufacturing process: The Youth Classroom Training Program curriculum was developed to teach bicycle mechanics skills through the disassembly and reassembly of key mechanical components. The first stage of the youth training program involves de-manufacturing damaged bicycles. Upon arrival, bicycles are assigned a number in chronological order of receipt and then logged into the inventory. All frame damaged bikes and very rusty bikes are slated for immediate demanufacturing. The component parts are cleaned and inventoried for use in repairing other bicycles or for sale to consumers. Approximately 20% of the bicycles are de-manufactured.

The remaining bikes are assessed for type, quality, and amount of repair time necessary to refurbish. Bikes that have the highest market value, that are in high demand (3 speeds and mountain bikes), and that are quickest to repair are worked on first. In addition, some customers put a down payment on a recent arrival and return to buy it fully repaired. These “pre-ordered” bikes also receive priority in terms of the order in which bikes are refurbished. On average, a refurbished bike requires six hours of labor.

Remanufacturing a bicycle

CREATE A FOCUSED PRODUCTION AND TRAINING FACILITY AND IMPROVE MATERIALS MOVEMENT WITHIN THE ORGANIZATION

Recycle-A-Bicycle needs to create a separate manufacturing, learning, and operations center because the current manufacturing operations are fragmented. Though the educational mission is well served, there is lost opportunity as not enough bicycles are being manufactured to meet demand in the retail stores. This opportunity cost can make the difference in sustaining the organization through retail operations alone. Over 2,000 bicycles were not collected in FY2002 as the means to gather these donations is currently dependent on the Executive Director’s ability to squeeze this task into an already packed calendar. In addition, if these raw materials had been collected, Recycle-A-Bicycle lacks the space to store these bikes.

The new production and training center will free up selling space in the retail stores. Valuable square footage is currently being used for storage of raw materials and waste. This space will instead be used for revenue-producing activities. The lack of storage space and materials movement is a major frustration for employees in current operations.

Securing a new production facility will enable Recycle-A-Bicycle to double the number of youth participants in the job training program. This will provide the learning environment they need to apply their newly acquired knowledge. Young people that excel in this program will be hired by Recycle-A-Bicycle or placed in shops around New York City.

In addition, the new facility will allow Recycle-A-Bicycle to increase the amount of trash it removes from the waste stream and ensure a consistent amount of used bicycles for sale. Storage space will allow for more efficient raw materials sorting and reuse. Additionally, more space will allow Recycle-A-Bicycle to consider creating other product lines which support its mission, such as selling used parts on the internet.

Recycle-A-Bicycle will create a production and training facility for processing raw materials. In 2004, a facility will be identified, purchased and outfitted. More management attention will be placed on the process of manufacturing: from raw materials identification and sorting, to moving materials, to eliminating waste in the process quickly. This facility, acting as a central storehouse, will significantly improve the operations and profitability of the organization. Acquiring a van will also allow the group to nearly double the amount of donated bicycles that it could collect.

1. OWN THE PRODUCTION AND TRAINING FACILITY INSTEAD OF LEASING – BUILD THE RECYCLE-A-BICYCLE BRAND AND BALANCE SHEET The group will retain its retail presences in the East Village and DUMBO as the current customer base is strong here, the locations are in close proximity to student labor and public transportation, and individuals know where the facilities are for making donations. The relationship with key partner Henry Street Settlement requires that facilities are near the Lower East Side and proximate to convenient subway connections.

Too much of the Executive Director’s time has been spent on sourcing space, negotiating leases and most importantly, worrying about the physical future of the organization. The production facility is an essential component in the sustainability of the organization to serve its social strategy. By “locking in” this facility, sustainability can be much more readily ensured by providing a consistent level of bicycles for sale and an environment truly focused on efficient recycling and production.

An additional benefit of choosing ownership rather than rental space is the availability of capital budget grants. These grants can drive down the cost of ownership. Specifically, the Environmental Services Unit of the NYS Department of Economic Development offers matching grants for capital investments in remanufacturing businesses. In addition, there are capital grants offered by other organizations, such as the Charles Hayden Foundation, that have a particular interest in supporting youth initiatives.

Recycle-A-Bicycle will identify, finance, and acquire a permanent production and training facility. Ownership of space will help mitigate risks presented by ownership changes, and also allow the organization to build equity on its balance sheet and have a more permanent outlook. The space will provide a more efficient learning environment for youth.

2. STRENGTHEN OPERATIONS Infrastructure has been bootstrapped and under funded. Systems must be created to provide better communications within the organization and to its customers. Better measurement systems for inventory and raw materials are also necessary to ensure that processes can be adequately managed. Store productivity, and production throughput will be more closely tracked and analyzed to identify areas of improvement.

Recycle-A-Bicycle will invest in new technology for its operations including a customer database and a centralized parts inventory database, continue to build its management team, and improve its communications processes.

Human Resources Recycle-A-Bicycle currently supports eight staff positions. Five positions are filled by bicycle mechanics who hold positions of store managers and head mechanics at its two retail stores. The business manager is the executive director, Karen Overton, who manages the triple bottom line. Adding staff to the team to diversify the skill sets and reduce the burden on the business manager is a strategic goal for the organization.

The store managers understand and are able to deliver on the retail aspects of Recycle-A-Bicycle operations. Though the managers have been working as a team for only a short time, they have demonstrated strong potential. Because of their trade and industry expertise, the team understands the social mission and how to integrate youth and learning into their operations. Retail and program management are adequately served by the team.

Recycle-A-Bicycle relies heavily on volunteer labor to achieve several aspects of its corporate activities such as tutoring youth, website development and maintenance, and fundraising. Though there are a handful of motivated, talented individuals who donate their time, this labor pool is unpredictable and does not provide a stable source of labor.

HIRE FOR SKILLS THAT ARE NEEDED; ADD STAFF TO THE RAB TEAM Recycle-A-Bicycle, like many small not-for-profits, is staffed very thinly. Employees are asked to perform many different roles, often beyond what their job would typically be in a for-profit entity. This staffing strategy functions, but has been dependent upon finding the ‘right kind of employee’ whose beliefs in the organization and its mission are strong enough to give them the drive to put in more than a typical “9 to 5” effort. As the organization has grown, its need for more specialized labor has also increased, and these needs must be addressed.

The store managers possess a good understanding and ability to deliver on the retail aspects of Recycle-A-Bicycle operations. Though the team has been working as a group for only a short time, they have demonstrated strong potential. Trade and industry expertise is strong in this group of managers. The team understands the social mission and how to integrate youth and learning into their operations. Retail and program management are adequately served by the current team.

Recycle-A-Bicycle relies heavily on volunteer labor to achieve several aspects of its corporate activities such as tutoring youth, website development and maintenance, and fundraising. Though there are a handful of motivated, talented individuals who donate their time to Recycle-A-Bicycle, this labor pool has generally proven to be unpredictable and ineffective in providing a stable source of labor. It is often more efficient for the Executive Director to take on additional work rather than spend time finding volunteers or reassigning current staff from other important responsibilities.

Several gaps exist in key areas of organizational leadership. One particular area is resource development and fundraising. The need for fundraising and development has increased over the past several years as Recycle-A-Bicycle has experienced government cut-backs that limit their ability to fulfill the youth training and employment mission. For example, the New York City summer youth employment initiative has been a source of funding for employing youth during the summer. However, funding for this initiative has been cut each year for the past two years, resulting in less funding available for Recycle-A-Bicycle to pay summer interns. In addition, adding staff at the leadership level will increase the organization’s ability to plan and implement additional programs to promote environmental stewardship and youth development.

In addition, the Executive Director is often performing tasks of a relatively low skill level instead of doing higher-level work. The retail managers do not possess the skills to fill in areas where the Executive Director is not able to deliver, though they are highly capable retail operators. Administrative assistance is needed to reduce this burden on the Executive Director. A staffing and succession plan is being developed for organizational leadership, which will mitigate these issues.

Carefully managed staff growth in several key skill areas will allow for better assignment of responsibilities, diversification of risk, for more tasks to be completed, and for better accountability and organizational performance. The Board supports hiring a new Development Officer to focus on fundraising, allowing the existing Executive Director to move back into the position of program and operations oversight Recycle-A-Bicycle will also hire an Administrative Assistant as well as a Production Assistant to oversee operations at the Production and Training Facility (see below).

INSTITUTE STRONGER MARKETING AND SALES EFFORTS TO INCREASE RETAIL REVENUES Currently there is no systematic approach to marketing and sales. More staff and volunteers will be recruited with this task in mind, so that a more concerted effort can be placed in marketing the organization and merchandising and sales within the stores. New product offerings should be considered that will increase the stores’ revenues and profitability.

Recycle-A-Bicycle can market its social and environmental missions much more aggressively within the stores and their trade areas. A campaign will be developed that highlights these two areas. This will include print media, an enhanced website, and a video that can be played in each store to assist consumers in immediately understanding why Recycle-A-Bicycle is the best place to purchase a used bicycle. In addition, Recycle-A-Bicycle will create and install much needed signage at the DUMBO store.

Recycle-A-Bicycle will also investigate selling used parts on the internet. Two strategies will be explored: using E-Bay as a mechanism for sales or tapping into the Bicycle Trader website that specializes in the sale of second-hand bicycles, parts, and accessories.

Recycle-A-Bicycle will create an aggressive marketing campaign, make improvements to point-of-sale merchandising in the stores, develop and implement a customer service training program, add new accessory lines to both operations, and improve the website to better facilitate e-business.

SUMMARY OF STRATEGIC INITIATIVES

Progress has already been made in several of these areas: a customer has offered to donate a vehicle to the project this spring; a New York University professor has adopted Recycle-A-Bicycle as a class project and will upgrade the website and develop an inventory system that facilitates e-business, and; free bicycle storage space has been identified in the East Village that will increase storage capacity by 100%.

2003 OR IMMEDIATE 2004 2005 / LATER Obtain temporary production and training facility Purchase independent production and training facility Investigate establishing new sites for student training to reach more students Obtain financing for strategic objectives Hire Production Assistant Renew DUMBO lease or consider purchasing space Hire/acquire Administrative Assistant Acquire a van for materials collection and distribution Investigate starting uptown retail shop Hire Development Officer Revitalize volunteer management program Evaluate expansion into the Bronx Investigate improvements to employee benefits program Create used part / sales interface to the inventory database Evaluate franchising Recycle-A-Bicycle regionally or nationally Develop and implement marketing campaign including signage Fundraise for Tours By Teens Program Implement Tours By Teens Program Purchase new computers and software to support inventory and accounting systems Enhance E-business capabilities for bicycles Market used parts on the internet through separate site Set up inventory management system and review merchandising Test selling used parts on the internet (through web auctions or set up independent site)

Renew East Village lease Update customer service training program Source: Recycle-A-Bicycle 5-Year Plan