Abstract
Sourcing strategies that employ operational hedging can reduce the risk of operating in low-cost countries. This article examines the sourcing strategy of toy-maker Mattel. Like the high technology industry, toys suffer from many supply chain ailments including short product life, rapid product turnover, and seasonal demand. Coupled with long supply lines and potential political and economic turmoil in Asia, toymakers face an unusually complex set of risks. Managers in many businesses can learn valuable lessons in managing uncertainty from toymakers. Set during the Asian financial crisis, the case describes a facility location decision for Hot Wheels and Matchbox cars. Besides the international location decision, the case illustrates: 1) How toy makers manage demand uncertainty; 2) Mattel’s outsoucing strategy in Asia; 3) How Mattel integrates its marketing and supply chain strategy.
This article was written with research assistance from Tom Clock.
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References
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Johnson, M. Eric (2001), “Learning From Toys: Lessons in Managing Supply Chain Risk from the Toy Industry,” California Management Review, Vol. 43, No. 3, 106–124.
Johnson, M. Eric (2005). “How Can North Pole Workshops Better Respond to Shifts in Demand,” Harvard Business Review, December, 44.
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© 2007 Springer Science+Business Media, LLC
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Johnson, M.E. (2007). Dual Sourcing Strategies. In: Lee, H.L., Lee, CY. (eds) Building Supply Chain Excellence in Emerging Economies. International Series in Operations Research & Management Science, vol 98. Springer, Boston, MA. https://doi.org/10.1007/978-0-387-38429-0_5
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DOI: https://doi.org/10.1007/978-0-387-38429-0_5
Publisher Name: Springer, Boston, MA
Print ISBN: 978-0-387-38428-3
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