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In the summer of 2007, Mattel, the largest toymaker in the US, made several recalls of products that had been made in China. The recalls led not only to a sharp reduction in Mattel's sales but also to public hearings in the US Congress, which significantly affected Mattel's reputation. Like other toymakers, Mattel has been relocating its production abroad, outsourcing the manufacture of parts and components. Indeed, 65% of Mattel's products are made in China. In contrast to its competitors, however, Mattel has understood the importance of quality control in this relocation/outsourcing process. In the 1980s, it reversed its earlier strategy of outsourcing to factories in Asia by owning and operating some plants in Asia for producing its most popular products. The product recalls show that quality control continues to be an issue. This case explores Mattel's strategy for organizing production, the trade-offs between in-house production and outsourcing, and the trade-offs between different production locations.

Jack Johnson, owner of Johnson Beverage, has just received notice that one of his largest and most loyal customers may want to negotiate a lower price for its product purchases. Information compiled by Johnson's accountant, where customer service costs are allocated to customers as a percentage of revenue, suggests that profit margin on the customer is too low to withstand a price decrease. Students are asked to design an activity-based system for allocating customer service costs and to use it to estimate customer profitability for several customers. The revised costs reflect that the customer places low demands on customer service resources and is sufficiently profitable to permit Johnson Beverage to negotiate on price to preserve the business. Additional analysis identifies some unprofitable customers, previously thought to be profitable, that offer opportunities for strategic decisions that lead to profit improvement.

Mattel, an industry leader with a sterling reputation in corporate responsibility, was being pulled into a recall vortex that had seen affected a variety of products produced in and exported from China in 2007, including dog food, toothpaste, tires, and seafood. Mattel CEO Robert Eckert was faced with a crisis. By the time the dust settled, Mattel had recalled 19 million toys made in China. Mattel's stock price declined as they took a $40 million charge for recalls, and their costs increased because of added regulation in China and the United States. Customers threatened to boycott Mattel and all toys made in China. Bob Eckert had been called to testify before both U.S. House and Senate hearings on toy safety. Chinese government officials saw Mattel's recall public relations approach as blaming China's manufacturers for what was primarily a Mattel design problem. This unfavorable publicity drew attention from Chinese regulators, and resulted in Mattel making a highly publicized public apology to China and China's quality watchdog chief, Li Changjiang. When it looked like nothing could get worse for Mattel, Congress sent a letter to Mattel stating that Robert Eckert was not honoring the public commitment he had made to consumers during the initial recall incident. This tsunami of negative events left Mattel executives perplexed and reeling: How could a company so highly regarded as a toy industry model of corporate citizenship find itself mired in such a controversy? What next steps should they take to recover from the crisis? How should they protect their brand? What should they do to restore their reputation? Was this crisis a roadblock to achieving their vision of being the world's premier toy brand "tomorrow"?

Megaprojects require investment of $1bn or more to build infrastructure, usually involving a complex system of production consisting of discrete, routine, and high-volume repetitive processes. Many of these processes can be progressively standardized and replicated to improve overall productive performance. This article presents the findings of research on design and production of London's Heathrow Airport Terminal 5 (T5). The findings were used to develop a conceptual framework-which we call the systems integration model-to identify the project and operational processes that contribute to success in delivering megaprojects. The systems integrator is the lead organization in a megaproject, responsible for establishing a governance structure, managing risk, and coordinating processes performed by a large network of external suppliers. Innovations based on the "recombination" and "replication" of processes can be introduced to improve megaproject performance.

"This case study serves to discuss a class of risk management strategies in supply chains. It underlines the importance of seeing supply risk management in its whole context encompassing the following parametres: - Operating decisions, affecting the supply profile for the commodity in question, including inventory choices, lot-sizing, cost-service tradeoffs, number of and supply chain design. - Procurement decisions, affecting the supply profile for the commodity in question, such as cover policy constraints, regional vs. global procurement, open costing procedures, etc. - Additional hedging decisions related to the commodity in question, such as taking positions in correlated markets. "

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A manufacturing company with a solid reputation for excellent service and quality and a command-and-control style of management with little communication across the organization decides to undertake a lean transformation, working closely with Lean Dynamics, a management consulting group with extensive lean-implementation experience. The challenges the company faces are examined in detail as are the lean implementation process, tools, and practices. But little progress has been made by the end of the second cycle of a three-improvement-process cycle. Students are asked to reflect on various aspects of the case and describe alternative solutions and actions that they might have taken by placing themselves in the role of the CEO, division president, or consultant.

The lean initiative detailed in the (A) case, UV1079, had reached a precarious stage. Despite an optimistic business forecast, there was a disturbing trend developing: the Machine and Systems division of Wausau Equipment Company (WECO) had failed to sell several harvesting systems to customers previously thought to be reliable buyers. It also appeared that the competition was making important inroads in what was traditionally "WECO country." The first wave of improvements made by the eight teams with regard to quality, productivity, and cycle-time reduction was not yet having any impact in the field. Team member enthusiasm to re-engage in the next improvement cycles had waned, yet some managers, supervisors and team leaders voiced strong support for the lean initiative. Pressure to cut costs was growing, and the lean initiative was increasingly seen by some as unnecessary and even wasteful. If the lean initiative were restarted, what could be done to ensure that it was effective and sustainable and what areas of the enterprise should be included? The president of WECO had to develop an agenda for the coming staff meeting, where he hoped to guide discussion toward the future of the lean initiative at his company.

This file contains slides that show the elements chosen by the senior management and consultants to re-engage and re-launch the lean journey at Wausau Equipment Company, following its original failed implementation and necessitated by implementation and acceptance problems at the management level.

Pitney Bowes, a Fortune 500 mail and document management firm, offered its first health plans in the years following World War II. Over the ensuing decades, Pitney Bowes adapted its approach to employee health amid rising health care costs, shifting employer attitudes towards health benefits, and a rapidly changing policy environment. By 2008, the firm was widely regarded as an innovator in employee health, having dedicated substantial time and resources to its health benefits under the leadership of then CEO Michael Critelli and Corporate Medical Director Jack Mahoney. The case provides an overview of the history of employee health benefits in the U.S. and at Pitney Bowes. The range of health plans Pitney Bowes offered to employees in 2008, as well as the firm's contracting policies with commercial insurers and self-insured plan administrators, are examined in detail. Pitney Bowes health and wellness programs are also described, enabling an analysis of the firm's overall employee health strategy in 2008 and a discussion of where Pitney Bowes should focus its attention moving forward.

A German expatriate had moved to China in 2005 to take up a merchandising position at the Wal-Mart China headquarters in Shenzen. By 2008 he had been promoted to the new position of senior director for sustainability for Wal-Mart China (retail) and Global Procurement. His new position required that he lead the rapidly-approaching inaugural Wal-Mart Sustainability Summit. The senior director must ensure that Wal-Mart China's five Strategic Value Networks (SVNs), which were tasked with leading sustainability change within the organization, continued to engage stakeholders by implementing innovative solutions that not only cut costs but also lead to more sustainable operations. The case describes Wal-Mart China's operations (including purchasing, distribution and retail) in the context of the company's desire to improve sustainability in a manner appropriate to China. The immediate issue is to identify opportunities to improve the sustainability of Wal-Mart China's distribution systems and retail operations.

This case is an excellent illustration of offline/online integration. Office Depot used its supply chain, systems integration, and existing offline channel strengths to overcome competitive online threats from pure Internet players and other office-products-category players. Students get to consider the critical strategic options for overall strategy, pricing, product line, promotion, and business integration.

This case is about the strategic-sourcing process: leading a major acquisition program with an unprecedented schedule and an unprepared industrial base. Soldiers in Iraq are dying in increasing numbers from improvised explosive devices planted in roads by insurgents. Up-armored Humvees offer little to no protection. Specialty vehicles with v-shaped bottoms to deflect blasts had been developed in South Africa and Rhodesia in the 1970s. The MRAP Vehicle Joint Program Office's mission was to procure up to 20,000 of these commercial off-the-shelf vehicles and get them to Iraq within 30 months. Yet U.S. production is fewer than 10 vehicles per month because not enough tires, ballistics-grade steel, and other raw materials are available. The daunting task: to undertake the fastest vehicle procurement since the Jeep in World War II, ramping up the industrial base, and overcoming the bureaucratic logjam in Department of Defense procedures.

In April, 2008, the president of Tiburon, a manufacturer of camouflage components based in the Dominican Republic, met with Tiburon's parent company and sole customer, GMA. GMA, based in Guelph, Ontario, was an equipment supplier to the United States Army. Tiburon had only been in business one month, and the president was analyzing the current production process in each of the Dominican and Guelph plants. There were noted differences between the two plants' production methods, which could affect Tiburon's ability to meet monthly capacity demands of GMA. The president wanted to present and implement her own ideas to improve the efficiency, quality and cost effectiveness of the production line in the Dominican Republic. In doing so, she had to balance the high expectations of GMA and Tiburon's investors with the plant managers' cultural observations about employees and their work.

Consultants have been engaged to recommend the ideal operations strategy for Stickers by dVider, to support a dramatic increase in demand anticipated by the company as a result of its aggressive growth strategy. After reviewing dVider's current operations, including a rigorous examination of its key cost drivers, students are asked to consider if outsourcing could benefit the various growth opportunities under consideration, whether the potential cost savings would be enough to justify such a dramatic change in the production formula that had worked so well for dVider in the past, or was it outweighed by the potential risks of decreased production quality and longer lead times?

This simple case enables students to examine a supply chain coordination problem in the context of a two-level supply chain with a retailer and a supplier. The case examines a retailer's decision about its optimal order quantity from his supplier and the difference between this decentralized decision and the coordinated decision achieved when the retailer and the supplier are part of the same company. The case then asks students to find the optimal supply chain contracts that will coordinate the supply chain. This case can be used to teach the newsvendor model and supply chain coordination and contracts in courses focusing on supply chain management or in operations management courses that include a supply chain module.

Describes the Mahindra & Mahindra Group's approach to innovation. The Group is among the top industrial houses in India and its managing director Anand Mahindra has put innovation at the core of its growth strategy. Emphasis is placed on managing the balance between structured processes and the creation of an environment in which radical innovations can succeed. The Farm Equipment Sector, one of the Group's largest and most successful sectors, is developing a revolutionary tractor outside its conventional development process with the help of a "Maverick" innovator. Not surprisingly, the project encounters numerous obstacles and setbacks. Focuses on: 1) the role of creative innovators in breakthrough innovations; 2) the need for process, structure and early feedback from markets; 3) the sources of radical product concepts; and 4) the marketing of innovations.