Leica Supply Chain Problems?

[Noctilux4me]

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Like many Leica fans, I am very frustrated.

 

I did an informal analysis by calling a few dealers in the USA, UK and Germany and came to the conclusion that the problem Leica is clearly having in supplying not only cameras, but more importantly, most of their new lenses may NOT be a minor one.

 

1) Most dealers have no idea when the next supply is coming and in what quantities. This is highly unusual, even for Leica. I don't know how you survive if you are a Leica only dealer.

 

2) Commodity prices are all going up and this is going to make the problem potentially worse

 

My concern is that this is a combination of a supply shortage (since Leica is not a high volume manufacturer, if it is competing for components with bigger fish that have more leverage in the supply chain, then there could be trouble for quite a while), and potentially an engineering issue on the line.

 

Engineering excellence is one thing, but if you can't get your product to the market 1 year after launch (in sufficient quantity, not talking about 1 or 2 units), then you will eventually lose to the Nikons and Canons of the world -and that is a shame.

[jaapv]

I think that this is a very well-chewed bone on the forum already. Leica has been overtaken by their own success - the M9 sold out the whole projected production run within a year- Of course that produces supply problems, that are not easily solved for a small manufacturere with little leverage in the supply chain. In the wash of the M9 lenses are selling in far larger numbers as well - with the same problems. So the position is: get in line, as with any successful niche product. There was a time that a Morgan car had a waiting list of six years.... The good news is that the pressure seems to be easing up lately with Leica. And I wouldn't worry about Nikon and Canon - that is a different market segment. If you want an M9 you are not going to buy a DSLR.

Edited January 4, 2011 by jaapv

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[57andrew]

In HK dealers effectively auction the stock they get. You have to pay a premium to get an M9 or nocti or indeed the new 35mm 'lux and if someone offers a higher premium you get bumped down the list. I know because my wife paid up, bless her cotton socks.

[Noctilux4me]

There's a fine line between maintaining tight supply in the face of excess demand and completely pissing off potential customers with 1 year lead times. If the M9 wasn't released well over a year ago, I can understand. But what is the point of having the M9 if you can't get the quality lenses to use it?

 

I don't think this is a planned strategy by Leica. I think this is symptomatic of a larger problem in the supply chain. I would like nothing more than for Leica to resolve this issue so they can expand their market with new customers like me...but I am skeptical...

[ho_co]

... Most dealers have no idea when the next supply is coming and in what quantities. This is highly unusual, even for Leica....

No, this is not unusual at all. It's the norm. It's what happened when I worked for them, and it's still what happens.

 

Leica isn't a mass-production machine. They produce in batches. If your order for lens X goes in the day after they finished the current batch of lens X, you will need to wait for the next batch of lens X, and that may be six months, a year, or longer.

 

Successful Leica dealers recognize that and buy accordingly. A dealer who special-orders a product when a customer asks for it will never be a successful Leica dealer.

 

As Jaap said, we've gone through this many times on the forum.

 

Leica has a real hit with the M9, and your post seems to say they'll never succeed that way. Sorry. I disagree.

 

When Leica is selling, products are backordered.

 

 

I spoke a few days ago to someone I knew at Leica when I worked there.

 

I asked "How's business?"

 

Answer "Fantastic, best we've had in years. Of course, our backorder lists are also longer than they've been in years." Laughing "Nothing new there."

 

Nothing new there.

[ho_co]

... completely pissing off potential customers with 1 year lead times....

 

Give me a break. When I ordered a 90/2 M in the 1970's, it took almost two years to arrive IIRC.

 

 

Glad you had time to call around and ask people when their next shipments were coming in. You might have done better searching the forum on the topic.

 

 

BTW, 4me, welcome to the forum. We're glad you're here and there are a lot of knowledgeable people here willing to help.

 

But if your first post is "Leica's going out of business because they can't compete and they're pissing me off," you might should learn a bit about the company and its products.

Edited January 5, 2011 by ho_co

[Noctilux4me]

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Can you please tell me where I said Leica is going out of business? What I said is that they will eventually lose out to Nikon and Canon. There is a difference.

 

I am happy that Leica is having their best year ever. It is an amazing feat that they have a core following that is not only willing to put up with 1,2 and in some cases 3 year wait times from their customers, but to also have their customers DEFEND the company vigorously in this situation. I think others have said this so I am not taking any credit for it - companies can only dream of having this luxury.

 

In any case, I hope the Rare Earth Metals issue in China doesn't exacerbate the situation this time around.

[jaapv]

There's a fine line between maintaining tight supply in the face of excess demand and completely pissing off potential customers with 1 year lead times. If the M9 wasn't released well over a year ago, I can understand. But what is the point of having the M9 if you can't get the quality lenses to use it?

 

I don't think this is a planned strategy by Leica. I think this is symptomatic of a larger problem in the supply chain. I would like nothing more than for Leica to resolve this issue so they can expand their market with new customers like me...but I am skeptical...

Err.. Leica has absolutely no interest in expanding their market beyond their production capacity.

Edited January 5, 2011 by jaapv

[jaapv]

Can you please tell me where I said Leica is going out of business? What I said is that they will eventually lose out to Nikon and Canon. There is a difference.

 

I am happy that Leica is having their best year ever. It is an amazing feat that they have a core following that is not only willing to put up with 1,2 and in some cases 3 year wait times from their customers, but to also have their customers DEFEND the company vigorously in this situation. I think others have said this so I am not taking any credit for it - companies can only dream of having this luxury.

 

In any case, I hope the Rare Earth Metals issue in China doesn't exacerbate the situation this time around.

You will find this customer mentality with any handcrafted quality article. You will have to wait - sometimes years- for a BlancPain watch, Morgan car,Luigi camera case and many other items. The mistake you are making is to apply a mass-production mindset to a niche product.

[andybarton]

What I said is that they will eventually lose out to Nikon and Canon.

 

Have Nikon and Canon started making rangefinders again? I must have missed that.

 

Leica are in a different product sector altogether.

[Olsen]

Long lead time is typical for all types of high priced top of the road brands. If you wanted to buy a 2011 model Ferrari 599 you had to book before Easter last year. At least. I would guess that similar lead times is typical for Porsche. 12 months delivery time is typical for certain models of hand made Swiss watches, except for the ones you see in the dealer windows. - You will find similar lead times within certain industrial machinery, earth moving equipment and other high priced capital products.

 

The logic behind this is that the producer (Leica, Ferrari, Porsche, IWC etc) don't produce a single sheet of metal unless it is sold. They have to keep their finance cost down.

 

It is the dealers that are supposed to keep stock today, since the wholesalers are cut out of the supply chain. Even though the few camera dealers that are left are economically strong, they, obviously, don't risk taking home enough Leica goods. This must be frustrating for Leica's sales department. No wonder they open more and more Leica boutiques.

[jaapv]

Just for fun I inquired into the delivery of an Olympus 300 ED 2.8 Platinum series lens just now - My dealer could not give a fixed estimate beyond "between six and twelve months"...

[jaapv]

Long lead time is typical for all types of high priced top of the road brands. If you wanted to buy a 2011 model Ferrari 599 you had to book before Easter last year. At least. I would guess that similar lead times is typical for Porsche. 12 months delivery time is typical for certain models of hand made Swiss watches, except for the ones you see in the dealer windows. - You will find similar lead times within certain industrial machinery, earth moving equipment and other high priced capital products.

 

The logic behind this is that the producer (Leica, Ferrari, Porsche, IWC etc) don't produce a single sheet of metal unless it is sold. They have to keep their finance cost down.

 

It is the dealers that are supposed to keep stock today, since the wholesalers are cut out of the supply chain. Even though the few camera dealers that are left are economically strong, they, obviously, don't risk taking home enough Leica goods. This must be frustrating for Leica's sales department. No wonder they open more and more Leica boutiques.

depends on the dealer. Martin Meister never fails to surprise me with the items he has in stock. For instance a couple of weeks ago - green a-la-carte camera strap? In house in 24 hours....

[stunsworth]

Can you please tell me where I said Leica is going out of business? What I said is that they will eventually lose out to Nikon and Canon

 

Let's be frank, in terms of sales they lost out to Canon and Nikon almost 50 years ago. They are now very much a niche player, and at the moment selling everything they can make.

[Noctilux4me]

Ok guys, I give I give... Leica wins. They can take as long as they want to produce their cameras and lenses.

[earleygallery]

Let's be frank,

 

I think it could be!

[UliWer]

Ok guys, I give I give... Leica wins. They can take as long as they want to produce their cameras and lenses.

 

I am sure, and it has been said by the Leica CEO in loud voice, that Leica would love to fulfill all wishes of every customer immediately and does not like the present delays in production. Though Leica isn't running the economy worldwide but depends on deliveries.

 

For lenses it is just glass. As they sold much more than exspected, they are short of the glass they need. Glass producers tell them they have to wait for very long times. There are different reasons for this: Leica needs very special glass sorts, which aren't produced in large quantities anywhere worldwide. There is also a shortage of raw material for glass production. If you like to use google, you might try to search for "Lanthan" and "China" and you might get some information which also seems to be a problem for producers like Nikon and Canon.

 

P.S.: If you are really interested in Leica lenses, you might try a Summarit for a starter until you get what you want. They are on stock at many leica dealers. You will either like the Summarit so that you don't want anything more, or you will be able to sell it without much loss.

Edited January 5, 2011 by UliWer

[Shadow Blaster]

In HK dealers effectively auction the stock they get. You have to pay a premium to get an M9 or nocti or indeed the new 35mm 'lux and if someone offers a higher premium you get bumped down the list. I know because my wife paid up, bless her cotton socks.

 

Andrew, I had to laugh out loud at "bless her cotton socks"! Going out on a limb here, might you be a Brit living in HK, and is that a common British expression?

 

John S (Yank living in Iowa)

[pico]

There's a fine line between maintaining tight supply in the face of excess demand and completely pissing off potential customers with 1 year lead times. If the M9 wasn't released well over a year ago, I can understand. But what is the point of having the M9 if you can't get the quality lenses to use it?

 

Good heavens, people. It appears that some have never had to wait for something excellent and scarce! Just because one has the money to purchase does not mean it should appear at the snap of the fingers.

 

(I waited for months for the new Panasonic 25mm F 0.95 and it was worth it. I got a good one. Amazing sharpness wide-open.)

Edited January 5, 2011 by pico

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[marknorton]

Let's be frank...

 

Where is the old devil, I wonder? Probably planning his 2011 Leica Turnaround Strategy I expect. Thing is, are we ready for it?

 

[i notice he's "Gesperrt" - did he get banned for some reason?]

Edited January 5, 2011 by marknorton