HBR Case Study AnalysisJust in Time for the Holidays

Section 2

BY :- Anisha Jhawar

Gaurav Parikh

Kriti Dua

Nandita Krishnan

Prashant Mishra

Rohit Sharma

Tilak Shrivastava

Company Details

1. Company : North Pole Workshops

2. Products in hand : Timmy the tinsel town train, Timmy’s CDs, ‘Meowrrr’ Mobile carrier.

3. Target Market : Children

4. Market restrictions : Delivery on 25th Dec only, right toys to right kids.

5. Objective : Meeting 100% of the demand

Brief History

1. Manufacturing and delivering toys to kids only on Christmas

2. Just-in-Time Business

3. Ensuring all kids are happy and receive their gifts on time

4. Value-oriented and main focus on customer satisfaction; maximizing value

5. Initially, run Intuition-based, over last few years technology in the form of ERP/CRM/GPS has been used.

Short Term Issues

Timmy’s CD-ROM : – Demand exceeding Supply– Risk of not being able to meet customer demand– Customer disappointment.

Meowrrr- – Supply of toy exceeding Demand– Risk of a huge inventory of unsold units– Chances of loss

Long term Issues

• Apparent Concerns since three years :– Inaccurate demand estimation – Forecast techniques

• Dynamicity of toy industry• Unpredictable popularity and trends change among children.• Influencing factors such as celebrity preferences change

frequently. • North Pole’s business model lacking adaptability and dynamism

Various Opinions

Cindy Counterwaite : – Upgrade demand translation system. – Focus on real time demand than early demands.

Dexter Pepperflepper :

– Outsource production to free internal capacity of the North Pole production lines

Barry Fiddledip : – Push ‘Meowrrr’ units to markets in Asia, Europe and Africa as the excess toy problem is

restricted to North American markets only.

M.Eric Johnson

Stop reacting to fads and start creating them Create demand by making their products ‘cool’ Create an agile supply chain Research on what kids’ are interested in and link the product to future

trends like a pop icon or any forthcoming movie Create controlled scarcity with variety Include a variety mix in package with a surprise element

Horst Brandstatter

Do not focus just on short-term demands but keep an eye on the bigger picture

Responsibility towards customers Considering the letters not as raw data but rather as feedback Do not outsource so as to –

– keep a strict in-house quality check– be responsible towards employees

Anne Omrod

Short Term:

- Stop Production on Meowrrr and reschedule duplication lines to produce Timmy's CDs

- Timmy Train units to be produced quickly and then shift capacity dedicated to the train to the CD.

- shortfall to be outsourced Long Term:

- Products to be classified based on how much value they bring to the business and degree to which you can forecast demand for them

- Matrix to be plotted with the above dimensions and production strategy to vary by quadrant Timmy - The Tinsel Town train –

Low value, High Forecast ability quadrant

Warren H. Hausman

Santa cannot satisfy 100 % demand since the bell curve goes indefinitely to the right

Apply Newsvendor Model 1) Plot bell shaped curve representing demand uncertainty

2) Asses cost of underage

3) Asses cost of overage

4) Conduct economic balancing to minimize expected costs Other ways of coping with Product shortage - Product substitution, risk

sharing and hedging

Short – Term Solutions

Free the production lines from Meowrr and speed up the production of Timmy’s CDs

Maximize the in-house production of the CDs and outsource the excess demand

Rope in another famous Teen Star or any super hero to advertise about ‘Meowrr’.

Market expansion to Asia, Europe and Africa for sale of Meowrr on an urgent basis

In case the Meowrr demand plummets, outsource the rest

Long– Term Solutions

Proper demand forecasting mechanism Letters to be used as a feedback rather than raw data Upgradation in toy segment by setting trends Making production lines agile Maximize similar components across products Outsourcing components for minimizing cost but with strong quality check in

place Recommending varieties of products to children with strong values products to be classified based on how much value they bring to the business

and degree to which you can forecast demand for them ; production strategy should vary according to the above

classification Risk sharing or hedging, substitution and postponement

THANK YOU