STRATEGIC SUPPLY CHAIN MANAGEMENT
CASE STUDY PRESENTATION
Prepared & Presented by:
CDR SHABBIR
CDR RASHID
MR QAISER
Mattel`s Case Study
Purpose of the Case Study
How to identify the gaps and issues in an industry, &
giving recommendations & suggestions by designing
an efficient Supply Chain.
Introduction
Mattel is one of the largest Toy Company in the world
Founded in 1945 by Harold “Matt” Matson and Elliot Handler.
It is an American based company
Its offices in 40 Countries and with a vast distribution in 150 nations.
They produce a large production list which includes the bestselling brands like :
Barbie
Hot wheels
Monster High
American Girl
Thomas and Friends
Fisher-Price
Mattel`s Supply Chain
It operates through 40 countries and its products are distributed among 150 countries
They Manufactures its half of the Products through facilities located in
China
Indonesia
Malaysia
Mexico
Thailand
Other 50% of its products are produced In 75 contact factories or by vendors in
China
India
Brazil
It produces 65% of its products in China
They keeps all its core products in-house in wholly owned and controlled manufacturing
operations
Barbie
Hot Wheels
Fisher Prices
Out-source all non-core products
They owns plants
5 in China
1 in Indonesia
1 in Mexico
1 in Malaysia,
1 in Thailand
2007 Crisis
Mattel recalled 19 million toys from August to September of 2007
First toy recall :
Defective magnets.
List of 71 models of toys that were recalled because of faulty magnets.
The second toy recall :
high levels of lead-based paint
The Mattel Global signature brands Barbie and Fisher price were
affected by this.
Issues
Issues that are identified in this case study are listed below :
Design issue
Manufacturing issue
Communication issues
Not having Full control.
Highly Competitive Sector
Unable to forecast demand
Manufacturers need more capacity
Retailers are seeking to resource own retailer branded products
Retailers are not likely to be involved in collaborative supply chain management
Systematic Process to Analyse Supply Chain
• Carter`s 10 C`s
• Collaborative Relationship
• SCM approaches like JIT , QR , CPRF
• Technology and information sharing
• Score cards in order to monitor and measure suppliers
Carter 10 C
• Competency – Does your supplier have the ability to deliver the products you
require?
• Capacity – Does the supplier have sufficient capacity to provide the products you
require? Capacity can include equipment, human resources and materials.
• Commitment – Does your supplier have the commitment to maintain suitable
quality performance?
• Control – Is your supplier in control of their policies and procedures?
• Cash – Does your supplier have a solid financial standing?
• Cost – What is the cost of products from the supplier?
• Consistency – Does the supplier guarantee a consistent product?
• Culture – Does the supplier share the same cultural values as your organization?
• Clean – Does your supplier have an appropriate sustainability policy?
• Communication – What tools will you utilize to communicate with your supplier?
Collaborative Relationship
• A focus that is client centered Leadership that helps develop and
maintain a shared vision.
• A plan that delineates shared goals and objectives
SCM TECHNIQUES
• JIT
• QR
• CPRF
Collaborative Relationship
• A focus that is client centered Leadership that helps develop and
maintain a shared vision.
• A plan that delineates shared goals and objectives
Collaborative Relationship
• A focus that is client centered Leadership that helps develop and
maintain a shared vision.
• A plan that delineates shared goals and objectives
STEEPLE Analysis . .
Social Technological Economic Environmental
• Brand Image • Recent technological • Increase in China Currency • Eco-Friendly Toys
• Nature of children's want developments by Mattel, Inc. • Exchange rates & stability of • Attitudes toward “green” or
• Technological gadgets are competitors host country currency ecological products
becoming common • Need to innovate • Interest rates • Laws regulating environment
• Attitudes (health, • Video games are close • Labour costs and productivity pollution
environmental consciousness, substitute for toys in the economy • Recycling
etc.) • Technology's impact on • Skill level of workforce in • Air and water pollution
product offering Toys & Games industry. regulations in Toys & Games
• Rate of technological industry
diffusion
Continue . . .
Political Legal Ethical
• Political stability and importance of Toys • Employment law • Respecting religious and social values of
& Games sector in the country's • Copyright, patents / Intellectual employees, customers and partners
economy. property law • Telling truth about products and service
• Interference in Toys & Games industry • Consumer protection and e-commerce • Producing product safe for customers
by government. • Health and safety law • Eliminating unsafe working conditions
• Industrial safety regulations in the
Consumer Goods sector.
• High Labour Cost
• Increasing Tension In US and China
Drivers for change for globalization in Mattel’s
supply chains
• Increased Competition
• Technology Developments
• Speed of New Product Developments
• Green & Ethical Pressures
• Technology market and youth
• High quality and low cost
• Drive for Cost Reduction
Solution to the Problem
• Training
• One solution to Mattel’s problem of ineffective management is for
Mattel to require all of their executives and employees to attend
training sessions on production and safety standards
• Mattel’s contractors were found to be in violation of Mattel’s safety &
human rights standards, they currently conduct an independent
monitoring audit in manufacturing facilities every three years
• Mattel required their contractors to attend training seminars based on
upholding safety standards, adopting a safe production process, and
complying with state and federal regulations for their toys, they could
reduce the number of violations during the manufacturing process
Internal Auditing Practices
• By adopting internal auditing practices, Mattel management will
be able to learn new techniques for detecting problems, as well as
increase their awareness of potential problems
• With this, the company would be able to avoid its negligence in
the inspection of the international manufacturing process, prevent
losses due to fines and litigation, and remain in compliance with
toy regulations and standards
• In order to keep track of the intricacy of Mattel’s operations, the
internal auditors can implement monitoring techniques.
Internal Auditing Practices
• Auditors will be responsible for monitoring management’s decision
making process, operating choices, subcontractors, and the entire
supply chain
• By employing internal auditors, Mattel will be able to measure the
accountability of each manager, as opposed to blaming subcontractors
for things such as the recall of toys
• While potential short term affects could be the cost involved in
employing auditors and the resentment of Mattel executives and
employees; in the long run, knowing that their work would be
inspected on a regular basis could motivate employees to stay focused
on upholding the company’s high standards and responsibilities.
Technology-based Products
• Mattel should focus on the development of technology based toys by
expanding their My Scene and Barbie brands in order to contend with
the ever increasing “role of technology in consumer products,”
• A My Scene movie would center on the My Scene girls living the
average life of high school girls. Barbie has appealed to younger girls
because her movies have focused on imaginary incarnations of Barbie,
like Barbie mermaid
• With My Scene movies, the story would focus on certain aspects of an
average girl’s life, which involves fashion, concerts, shopping, and pop
culture references.
Swot Analysis
• An internal analysis of Mattel Inc. brings to light the company’s
strengths and weaknesses.
• Their strengths center on their core brands being instantly
recognizable.
• Since 1960, Mattel has become “the world’s largest toy company
in terms of revenue”
Swot Analysis
Strengths Opportunities
Mattel’s core brands are instantly recognizable Growth potential with technology-based toys, especially in
Barbie is the #1 doll in the U.S.A. international markets
Brand leveraging is high Development of an online social network
Dominance in the international market Expand Barbie and My Scene brands to include sports gear,
fashion lines, music, and movies
Weaknesses Threats
Inefficient management Increasing global competition
Reliance on Wal-Mart and Target Increasing domestic competition
Reliance on traditional toys Volatile oil prices
International laws and ethics
Lifestyle changes of target audience
Rate of children growing up
Role of technology in products
Purchasing power and consumer needs in global markets
Conclusion
• Mattel should :
▫ Control its Supply Chain better,
▫ to cope with design problems,
▫ product misuse,
▫ lead paint issues and usage of Unapproved Suppliers
▫ Always act fast
▫ Take responsibility
▫ Tight regulations and inspections
Conclusion
– Mattel should inspect its subcontractors
– Direct Site Visits to Suppliers to be able to make evaluations on their
performances
– Integrated Global Sourcing requires horizontal links with other
functional groups (esp engineering, operations, design, demand
planning and marketing)
– Integration is also required with Tier 1, Tier 2 and also Tier 3
Suppliers
– Increase expenditures on quality controls and tests
– Strictly follow up Tests to be held through the Supply Chain and
Increase Check Points (3 check point system)
– Total Cost of Ownership
