Supply Chain Analysis of Mattel

7209 Words Nov 5th, 2008 29 Pages
Executive Summary

Team 2 has researched and completed a comparative analysis of Mattel’s supply chain design and related costs with that of its major competitor Hasbro and the toy industry. What follows, is a brief background of Mattel’s traditional (non-electronic game) sector, its key competitors and Mattel’s use of supply chain management concepts in addressing the competitive landscape to gain a competitive advantage. The global toy and game market grew by 7.2% in 2007 with a value of $106.1 billion and by 2012, is forecasted to have a value of $126.2 billion, an increase of 18.9% over 2007. The toy market is divided into three primary sectors, namely game consoles, game software and traditional toys and games. Traditional toys and
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Rather than having the most responsive supply chain possible, Mattel has attempted to design a leaner supply chain as evidenced by the use of POS data sharing and combining shipments.
Mattel has successfully implemented inventory management concepts in leveraging its distribution assets, ensuring that product availability remains high. It has implemented advanced technologies such as Radio Frequency Identification (RFID) and Electronic Data Interchange (EDI) to effectively collaborate with its largest customers. By continuing to optimize its supply chain through application of advanced supply chain concepts, technologies and policies, Mattel continues to lead the traditional toy industry.
Mattel has strong financials and is on solid footing for the near future. Mattel is an industry leader in categories of inventory turnover and return on equity. The high inventory turnover indicates that Mattel has an efficient supply chain and can replace inventory quickly without having stock outs. Mattel’s return on equity is very high at 21% compared with the industry average of 10%. While the quick and current ratios are a little low compared with the industry, they are still high enough to ensure sufficient cash flow. In summary, Mattel is on solid financial footing and is at or near the top of the industry on all key financial measures.

Mattel’s Supply