In an economy stricken by a pandemic, Peloton quickly found itself rising to the top of the connected-fitness food chain. Two years later, thousands of employees are getting fired and Peloton is considering a potential sale to other corporations.
What went wrong and how did supply chain play such a significant role in all their troubles?
While trying to deal with tremendous growth, Peloton may have failed to account for different versions of the future, such as a downward trend in demand following post-pandemic gym reopenings. This led to a dramatic case of “The Bullwhip Effect” reinforced by Peloton’s long-term decisions of vertical integration.
Today we’ll explore any lessons for supply chain managers there are to learn from Peloton’s example, and any practices (probabilistic forecasts, for example) that may help in dealing with these sorts of situations.