Mattel Outsourcing

1074 Words5 Pages
Mattel outsources manufacturing to Indonesia, Malaysia, Thailand, Mexico, Ireland, and China. Most outsourcing is done through China accounting for 65% of Mattel’s total production. Mattel owns one plant in the USA, and Ireland with the reaming in Mexico and Asian countries. Mattel uses these in-house manufacturing plants for about half of their production which is relatively high in comparison to Hasbro which uses nearly no in-house production. The half that is produced by non-Mattel owned plants are required to operate under the Vendors Operation Asia (VOA) in order to keep Mattel’s standards in production and relationships that they offer in the Asian government. This is to keep up with the ever-changing toy market that has a life cycle of about one to two-year or less. Mattel carries functional and innovative products that they offer mainly to the USA at 36%, Europe at 29%, and then Asia at 24% of the toy market with Asia and Latin America on an incline. Mattel has the highest percentage of the global toy market at 6%. There is a trend of consumers “getting older younger” as technology develops. The demand for high tech toys and video games is growing. In the recent years Mattel has experienced issues with product recalls resulting from manufactures in China using lead based paint, and also product design failures. The relationships that Mattel has to these manufactures oversees have become a problem as innovative products have such a fluctuating demand that the suppliers are not being used fully and are not content. Mattel places a large need for lower prices brought on by warehouse stores becoming the major suppliers. Labor costs are also on the rise in China which is conflicting with Mattel’s demand for low-priced manu... ... middle of paper ... ...itored for their employee practices as well as their product quality. Mattel needs to be reactive to the market trend to electronic entertainment by creating video games and high tech toys that the young consumer is developing a demand for. Technology is always being developed and the trend towards electronic entertainment will continue to grow. Mattel should begin to compete in this growing market through investments in what consumers want. The supply chain for high tech toys will need to be implemented by outsourcing microchips to American, or Japanese manufacturing plants that are most efficient in quality and production. Video games and electronic entertainment may be soon deliverable online, in which Mattel will need to create a channel structure through Xbox 360 online, Playstation 3, directly, or simply through online distributors of electronic content.

More about Mattel Outsourcing

Open Document