Supply Chain Issues from Canada to China

3942 Words May 8th, 2006 16 Pages
Recently an opening of the economies of developing nations, especially China, has allowed a huge shift in outsourced production. For the most part the products of the outsourcing are destined for North American consumption, which creates interesting obstacles to the realizations of improvements predicted. Mega Bloks Inc is a Canadian example of this trend, having recently made their own foray into outsourcing to China. An examination of supply chain issues reveals the overall complexity and number of issues which could develop for a company like Mega Bloks. More specifically, for Mega Bloks issues of logistics, regulation, control (in general and specifically of quality) come to the forefront. All of these issues can individually and …show more content…
It is interesting to look at the Mega Bloks case for several reasons. Firstly, Mega Bloks has not yet made the move and therefore the results of this venture are not yet known. We can presume, however, that Mega Bloks has done careful diligence on many of the issues we will propose before entering into such an agreement. The prospective nature also means we can now observe the actual impact in their business versus the outcome Mega Bloks has predicted. Also, the toy industry is going through significant changes that make it more and more necessary for producers to compete on price and innovation. Specifically, children are becoming more tech-savvy at a younger age and have far more toy options . Innovation and low cost are becoming the keys to success for toymakers. By Mega Bloks shifting production to China, they are hoping to reduce costs and be able to focus on their core competencies, which they describe as "new product development and superior customer service " This move to China will have a tremendous impact on their supply chain and Mega Bloks will face many important issues and problems as they move ahead. Finally, the toy industry is one with established offshoring practices, Shenzhen China now being known as the toy production capital of the world.
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