From Our CEO
Mattel Tones Down Supply Chain Complexity
By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE
For more than half a century, Mattel’s Hot Wheels cars have been a toy box staple. Hot Wheels were designed to look like modified hot rods or fantasy cars, often having flames painted on the sides and fantastical proportions. In addition to the toy cars themselves, the accompanying racetrack sets included connecting sections of road and ramps, as well as superchargers made from battery-powered spinning wheels to thrust the cars forward. Top speeds along these iconic bright orange ramps have been clocked at 600 scale miles per hour (just over 9 real miles per hour). This extraordinary speed was made possible by the cars’ uniquely high-quality bearings, which were actually conceived by a former Raytheon missile engineer.
Over the years, Hot Wheels have been offered in myriad shades: Spectraflame; Solid Enamel; Flying Colors, featuring flashy decals; Blister Pack; Thermal, which change color in cold water; and countless more. In fact, Mattel designers could choose from 150 different shades of red alone, with ink types ranging from glossy to waterproof.
Of course, every variation led to significant downtime at factories while equipment had to be cleaned before switching shades, as well as exponentially higher storage costs.
“Complexity is really a killer,” Mattel’s chief supply chain officer (CSCO), Roberto Isaias, says in The Wall Street Journal, explaining that his company will cut both color choices and the total number of products manufactured by about 30%. Isaias feels strongly that Mattel doesn’t need so many options and fewer shades will be hardly noticeable to consumers. “It doesn’t matter,” he told the Journal.
The toymaker also is implementing automated systems for wholesale orders and increasing minimum order quantities.
According to the article, all of these efforts are intended to simplify Mattel’s supply chain by improving, modernizing and taming “a sprawling network” that includes 13 factories, 35,000 employees during peak periods and 375,000 retail locations.
It’s inspiring to see more and more articles in the news these days that quote CSCOs such as Isaias. There is no doubt that organizations worldwide are recognizing the unique value of this essential role. Modern global supply chains require strategic, resourceful leaders who approach problems creatively — whether streamlining inventory complexity; eliminating shop-floor wastes, such as changeovers or turnaround time; or optimizing minimum order quantities.
ASCM was proud to hold our invitation-only, Chief Supply Chain Officer Forum again last year at our annual conference in Las Vegas. The goal of the event was to learn from one another in order to help CSCOs reduce costs and risk, drive business processes and advance supply chains. The forum followed Chatham House Rule, with no press or solicitation, to ensure that participants could share ideas and concerns openly.
In the end, the CSCOs identified three key trends: digital supply chain transformation, preparing for the next recession, and cultivating trust among customers and employees. ASCM will continue delivering valuable content on these subjects in order to help all supply chain professionals prepare for success. Look to ASCM group training, corporate seminars and the supply chain learning center, as well as our research reports and journals, blog and SCM Now magazine. These essential supply chain insights are sure to accelerate your networks and supercharge your career trajectory.