Santa Cruz Bicycles: Not Your Father's Ride

By Mel Duvall  |  Posted 2007-11-30

Hanging on the wall in the fabrication shop at Santa Cruz Bicycles is a frame that represents the company's greatest success—and its greatest problem.

Originally constructed in 2001, the frame is the first designed with the patented Virtual Pivot Point (VPP) suspension system. Without getting into technical detail on what makes the VPP so special, it provides a means to absorb bone-rattling shocks as riders soar off ridges or hurtle down mountains, without depleting riders' energy for pedaling up hills or out of holes. The frame represented more than three months of design work and four months of custom fabrication by outside machine shops. When the prototype arrived at the company's offices, in a converted cannery building near the Pacific shore in Santa Cruz, the engineers couldn't wait to put it through its paces.

The first test didn't go so well. The VPP joint's upper link snapped after a quick jump off a relatively low ramp.

"It only took one ride to realize that the thing sucked," says engineering manager Joe Graney. "Here we were seven months in, a lot of money in the hole, without a bike to bring to market."

The experience served as a catalyst for the company to overhaul its design and engineering processes. To capitalize on its patented technology and ultimately grow the business, it had to find a way to get designs off the drawing board and into prototypes faster. That led the company, which at the time had only about 25 employees, to make the leap into product lifecycle management software. Santa Cruz Bicycles—and the impressive growth it's experienced since—demonstrates that PLM software is not just for the Toyotas, Boeings and General Electrics of the world, but also for midsize manufacturers with tough design challenges.

The Santa Cruz Bicycle story begins in 1993 when former professional skateboarder Rob Roskopp teamed with fellow boarders Mike Marquez and Rich Novak to launch the company. While the three got their start in skateboards, and in fact started a sister company called Santa Cruz Skateboards, they had also become avid mountain bike enthusiasts, feasting on the terrain along the famed Pacific Coast Highway.

The company enjoyed modest success through the 1990s but remained a relatively small, custom-fit shop with about $6 million in revenue. In 2001, Roskopp came across a design for a new suspension system—the VPP—originally developed by Outland, a small bicycle manufacturer. Outland had not been able to capitalize on the design, but Roskopp saw its potential and negotiated a deal to buy the patent. The company introduced its first bike with VPP suspension at the 2001 Interbike show in Las Vegas. The design turned heads.

An impressive feature was that the new pivot design allowed the rear wheel to travel a full 10 inches. That means when a rider lands off a jump or hits a rock on the trail, the rear wheel can bounce up 10 inches without hitting the frame or the seat. It provides that shock absorption without giving the rider the sense of sitting on a coiled spring. "That's the goal," Graney says. "You want the bike to have that squishy feeling, but without bouncing up and down when you pedal."

A year later the company introduced the Blur, a cross-country version of the VPP design, which won a number of industry awards and spurred a leap in sales. Today, Santa Cruz Bicycles employs about 70 people, produces some 10,000 frames a year, and has been increasing sales by more than 40 percent a year. The private company won't reveal specific revenue figures, but its bikes typically retail for $1,500 to $6,500.

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But back to 2001. The failure of the first frame with the VPP suspension drove home a critical defect in the company's research and development process. Even though Santa Cruz Bicycles was using Autodesk's AutoCAD computer-aided design (CAD) software, it took far too long to render new designs and, in turn, to have parts machined by outside shops. Seven months was a long development cycle, and if the design failed—as with the first VPP frame—going back to square one would be a major headache—and a big hit on the company's finances.

The answer to the challenge came through a combination of people, processes and technology. After evaluating more powerful design packages, including SolidWorks (division of Dassault Systemes), AutoCAD (Autodesk) and Velocity (Siemens/UGS), Santa Cruz Bicycles selected Pro/Engineer 3D from Parametric Technology Corporation (PTC). Three factors sold the engineering team on Pro/Engineer, according to Graney: scalability—it met current and future engineering and design needs; capacity—it could model complex surfaces and materials; integration with extend software—it worked well with PTC's other PLM modules, such as Pro/Mechanica, so the company could expand its use of the software over time.

Pro/Engineer provided Santa Cruz engineers with more powerful analysis and modeling capabilities, Graney says. They can use its simulation capabilities to watch as the VPP suspension lets the rear tire move upward and see whether the tire connects with the frame or seat and whether the chain has enough flex to allow the motion, and to gauge the effect on shock absorption. Pro/Engineer 3D tracks all related variables, so designers and engineers can see the impact when the frame performs outside design specifications, says design engineer Nick Anderson. From there, they can quickly make design adjustments.

There are numerous other benefits to the software, including the ability to model such factors as stress loading to find a part's breaking point using the Finite Element Analysis (FEA) module. Using a color graph, which shows the highest-stress areas in red, Anderson can "see" which parts of the bike are under the greatest danger of failing. This is a critical feature, considering the abuse mountain bikes take in ordinary use.

With its previous design software, Santa Cruz needed up to seven hours per simulation. With Pro/Engineer, it needs less than five minutes. This means engineers can make hundreds of changes and run dozens of simulations every day, says Graney.

The new design software was only one piece of the larger solution. Following the failure of that first VPP frame, Santa Cruz Bicycles hired master frame builder Gary Yokota to build and test prototypes in-house. It went on to invest about $45,000 in a Haas Automation Toolroom Mill, a van-size machine that can take a chunk of aluminum and carve it into an intricate part. The Pro/Engineer software passes the design specifications over to PTC's Pro/Manufacture software, and with a bit more tweaking, the file is transferred to the Haas machine to fabricate the part.

Graney and his engineering team can design a new bike, and with the Haas machine carving out parts, Yokota constructs a prototype. In the past, it averaged 28 months from the start of designing a new bike to shipping. Now, by using the PLM software and bringing much of the prototype construction in house, it takes 12 to 14 months.

"It takes half the time to bring a bike to market, and we have much, much better quality control because we can make multiple revisions along the way," says Graney.

In the past, such benefits derived from the use of PLM software were usually restricted to large manufacturers. Most small- to midsize businesses found the systems too costly or complicated to deploy. However, the market has changed dramatically over the past several years, says Matt McGovern, PTC's director of vertical market strategy for SMBs. The midmarket is now one of PTC's strongest growth opportunities.

"PLM technology has become much friendlier, both in terms of the software and the way companies can deploy it," McGovern says. People have long thought of PLM software as one-size-fits-all, like customer relationship management or enterprise resource planning systems. But vendors have broken PLM into modules, which smaller companies can more readily adopt.

Also, PLM software has been fine-tuned to run on today's more powerful desktop computers, as opposed to high-end workstations of the past. Now a company can get into a package like Pro/Engineer for about $5,000 to $7,000 per seat.

Despite all the technical wizardry now at Santa Cruz Bicycles' disposal, the very nature of the sport means bikes designed on the computer still may not meet the ultimate test. For that reason, Graney and his engineering team do real-world testing. Just prior to our visit, they were preparing to spend a week punishing their latest designs on Lake Tahoe's rugged ski slopes.

"Tough job, but someone's got to do it," says Graney.

Santa Cruz Bicycles
Headquarters: 104 Bronson St., Santa Cruz, CA 95062
Phone: (831) 459-7560
Business: Manufacturer of custom mountain bikes that sell for up to $6,500.
Lead engineer: Joe Graney
Financials: Private company. Revenues estimated at $20 million to $40 million.
Baseline Goals: Cut the time it takes to bring a new bicycle from planning to shipping from 28 months to 12 to 14 months. Use more advanced software and hardware technologies to let engineers run product simulations in five minutes vs. seven-hour average. Integrate design software with new tool mill so parts can be machined in-house in one to two days, compared with four weeks to five weeks when outsourced.