A toy traffic jam is threatening to ruin Christmas. John Baker’s job is to save the day. Baker is the logistics boss at MGA Entertainment, the company behind L.O.L. Surprise dolls, Little Tikes cars and other popular toys. His job: Retrieve the items in time for the holidays by overcoming a jammed-up global supply chain that is holding them hostage. In June, when new toys typically exit factories for cargo ships and stores world-wide, hundreds of thousands of MGA dolls, play sets and accessories were piling up in factories and rented warehouse space in and around China’s port city of Shenzhen. The waiting toys would require 1,400 40-foot containers and cargo space aboard vessels.
Baker had already faced warnings that Chinese factory owners were running out of storage space. If he couldn’t get the toys shipped out of Shenzhen soon, they would stop making any more. His supply-chain problem is testing leaders across America, from the makers of Nike sneakers to Ford pickup trucks to Whirlpool washing machines. “It’s more dramatic than what I can remember,” says Walmart’s CEO.
Since the Covid-19 pandemic, the once finely tuned world-wide assembly line has limped along, writes The Wall Street Journal (Oct. 13, 2021). Worker illnesses are shutting factories and ports in Asia, a once reliable source of inexpensive manufacturing. Floods and hurricanes are disrupting the orderly flow of raw materials. The shortage of semiconductors has limited availability of everything from cars to computers to videogame consoles. There is a shortage of cargo containers to ferry goods across seas and truck drivers to deliver them. Freight rates have hit record levels.
In a dessert town outside Los Angeles, the 62-year-old Baker tries to unravel the most complex knot of a career that began 4 decades ago, as a forklift driver moving pallets of Smurf dolls. He has been working in toy logistics his entire career and is now a VP for one of the world’s largest toy makers, which tallies more than $2 billion in annual sales.
The stakes are high this season, and the clock is ticking. Half of all retail toy sales come in the weeks leading up to Christmas. Toys that arrive too late won’t sell until they are heavily discounted after the holidays. Baker has to get MGA toys out of China and onto retail shelves with enough time for parents to buy them and put them under the tree.
This is a great story of the importance of one particular topic in Chapter 11 in your Heizer/Render/Munson text–logistics. Baker has used ships, trucks, and trains to try to get the toys to shelves. Will he succeed?
Classroom discussion questions:
- Why has the global supply chain weakened?
- What can Baker do to move toys from China to MGA’s European customers?