Peloton announced a new Peloton x Rexon partnership with the Taiwanese fitness machine manufacturer. Through this partnership, Peloton will outsource the manufacturing process of its at-home workout equipment including its exercise bikes, treadmills, and more, to Rexon. This partnership is expected to simultaneously save Peloton money while improving annual revenue for both Peloton and Rexon, as Rexon has much more established production facilities.
Peloton stated that it is ceasing in-house production as soon as possible, which will slowly phase out across its facilities through the rest of 2022. When speaking on this new initiative, Andrew Rendich, the Chief Supply Chain Officer for Peloton, stated "We are going back to nothing but partnered manufacturing... It allows us to ramp up and ramp down based on capacity and demand," showing that the new partnership allows the company to be more flexible and economically sustainable.
Workout Machine Outsourcing Initatives
Peloton Partnered with Rexon to Develop its Hardware
Trend Themes
1. Outsourcing Manufacturing - The partnership allows Peloton to save money, while improving annual revenue for both companies, thereby creating disruption innovation opportunities in manufacturing and supply chain businesses.
2. Partnered Manufacturing - Peloton's decision to cease in-house production and move to partnered manufacturing with Rexon, which is a much more established production facility, represents an opportunity for similar fitness machine manufacturers to adopt the same strategy for more sustainable and flexible productions.
3. Flexible Production - The move to partnered manufacturing allows Peloton to ramp up or down production based on demand, which could create disruptive innovation opportunities in fitness equipment manufacturing, as it could also inspire other industries to adopt similar strategies.
Industry Implications
1. Fitness Equipment Manufacturing - The partnership between Peloton and Rexon creates disruption innovation opportunities in fitness equipment manufacturing in terms of sustainable and flexible production processes.
2. Outsourcing Services - Peloton's decision to outsource its manufacturing process to Rexon represents a potential disruption in the outsourcing services industry, as it demonstrates a more sustainable and cost-effective solution for companies looking to outsource their production processes.
3. Supply Chain Management - The move to partnered manufacturing represents a potential disruption in supply chain management industries, as it shows how companies can be more flexible and sustainable through outsourcing, which ultimately allows them to save money and generate more revenue.