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Supply Chain Management exercise questions - Mattel Inc. case study

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Mattel, Inc Case Questions

1. Discuss Mattel's rolling mix strategy from three perspectives: manufacturing, overall supply chain, and marketing/retailer.

2. Critique Mattel's outsourcing strategy. Should die-cast cars be a core product?

3. Discuss the impact of exchange rates on labor cost. What is the true labor cost assuming labor productivity (hours per 1000 cars) is:

China - 60 hours/1000 cars
Indonesia - 90 hours/1000 cars
Thailand - 50 hours/1000 cars
Malaysia - 30 hours/1000 cars

4. Given that productivity in Mexico is roughly equivalent to Thailand (50 hours/1000 cars), why not consider Mexico as a possible location to build a new die-cast care plant?

5. What should Mattel do to satisfy capacity needs?


Solution Preview

Discuss Mattel's rolling mix strategy from three perspectives: manufacturing, overall supply chain, and marketing/retailer

The rolling mix strategy of Mattel from the perspective of manufacturing is that the strategy challenges the manufacturing process to change the cars 7-8% every week! The processes of electroplating, vacuum metalizing would not need many changes; there would be a need for changing the packet printing to match the new design of the toy.

The other processes of die-casting, plastic injection molding, basic painting and decorating processes would need to be changed with every change in the rolling product. What is significant is that these changes would earlier need to be made on the basis of POP data that would make the changes unpredictable and dependent on the whims of the market place. The rolling mix strategy allowed the company to plan the changes in its manufacturing process, which would make the manufacturing changes much easier to predict.

The rolling mix strategy from the perspective of overall supply chain was that the supply chain had to regularly produce different models to meet the market need for variety and two changes every year of production. This process however, required a change of dies and this change needed a vendor development for the production of dies. The dies required a large initial investment that the manufacturers were reluctant to undertake. There were worries that there was not sufficiently large capacity die-cast capacity in the vendor base to meet the Matchbox demand. It was the rolling mix strategy that triggered the decision to build a new plant in Southern China to handle the increased demand for Hot Wheels and to consolidate Matchbox production. It is in this connection that Indonesia was considered as a possible site for the site of a new plant, this was followed by Kuala Lumpur in Malaysia. In short, the rolling mix strategy was putting the entire supply chain under pressure to perform. The die-cast capacity shortage is the main problem that is facing Montalto and the company is seriously considering de recognizing treating die-cast cars as a core product and to farm out the production of these cars.

From the marketing perspective the strategy of rolling mix is an extremely effective strategy. First, it induces the prospective buyers to make regular purchases and keep him interested in the product continuously over a period of time. Second, there is an element of self-advertising and promotion, because it stimulates the interest of the buyers who want to see the new car. Thirdly, the ...

Solution Summary

In a 1782 word solution, the Mattel case is fully explored.