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Dual Sourcing Strategies

In: Building Supply Chain Excellence in Emerging Economies

Author

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  • M. Eric Johnson

    (Dartmouth College)

Abstract

Sourcing strategies that employ operational hedging can reduce the risk of operating in low-cost countries. This article examines the sourcing strategy of toy-maker Mattel. Like the high technology industry, toys suffer from many supply chain ailments including short product life, rapid product turnover, and seasonal demand. Coupled with long supply lines and potential political and economic turmoil in Asia, toymakers face an unusually complex set of risks. Managers in many businesses can learn valuable lessons in managing uncertainty from toymakers. Set during the Asian financial crisis, the case describes a facility location decision for Hot Wheels and Matchbox cars. Besides the international location decision, the case illustrates: 1) How toy makers manage demand uncertainty; 2) Mattel’s outsoucing strategy in Asia; 3) How Mattel integrates its marketing and supply chain strategy.

Suggested Citation

  • M. Eric Johnson, 2007. "Dual Sourcing Strategies," International Series in Operations Research & Management Science, in: Hau L. Lee & Chung-Yee Lee (ed.), Building Supply Chain Excellence in Emerging Economies, chapter 0, pages 113-133, Springer.
    • Handle: RePEc:spr:isochp:978-0-387-38429-0_5
    DOI: 10.1007/978-0-387-38429-0_5
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    Cited by:

    1. Sun, Churen & Tian, Guoqiang, 2011. "Firms' organizational modes with productivity heterogeneity, demand uncertainty and production capacity," MPRA Paper 35667, University Library of Munich, Germany.
    2. Yuetao Gao & Norman Johnson & Bo Shen & Yinliang (Ricky) Tan, 2023. "Benefits of sourcing alternative inputs of manufacturers for suppliers," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 1880-1894, June.
    3. Du, Julan & Lu, Yi & Tao, Zhigang, 2009. "Bi-sourcing in the global economy," Journal of International Economics, Elsevier, vol. 77(2), pages 215-222, April.
    4. Takeshi Iida & Arijit Mukherjee, 2020. "Make and buy in a polluting industry," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(6), pages 1852-1874, December.
    5. Colombo, Stefano & Scrimitore, Marcella, 2018. "Managerial delegation under capacity commitment: A tale of two sources," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 149-161.

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