Toy industry faces relentless change and unpredictable buying public, which creates enormous difficulties in predicting the best sellers and forecasting capacity. As high-tech industry, toys, also suffer from many diseases of the supply chain, including the short life of the product, the rapid turnover of products and seasonal demand. In combination with long supply lines and the current political and economic turmoil in Asia, toy manufacturers are faced with extremely complex set of risks. The leaders of many companies can learn valuable lessons in managing the uncertainty of the toy. This article describes the supply chain lessons are aimed at reducing risk through active management of both demand and supply variability. These lessons include a variety of products based strategies for product extensions, rolling mix strategy, borrowings license agreements, consistent outsourcing strategy, and hedging against political and currency risks by building in different countries. "Hide
by M. Eric Johnson Source: California Management Review 20 pages. Publication Date: April 1, 2001. Prod. #: CMR202-PDF-ENG
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