In the chapter, we described agility as an enduring trend in operation and supply chain management. In your opinion, how did LeapFrog and Capable Toys demonstrate agility in responding to the new market demands?

CHAPTER 1 INTRODUCTION TO OPERATIONS AND SUPPLY CHAIN MANAGEMENT 19 to the stores in time for the holiday season. Because of the short lead time, LeapFrog was forced to use air shipping and 2. What data ultimately led to LeapFrog's decision to special fast shipping, which added $10 to $15 to the cost of increase production levels of the LittleTouch LeapPads? cach LeapPad. These additional costs ate into the profit of the Where did these data come from? How long after inter- LeapPad, which sold for $35, but as with the Tyvek paper, Leap- preting these data did LeapFrog start talking with Capable Frog management felt that the long-term satisfaction of retail Toys about increasing production levels was it days, wecks, or months? ers and customers outweighed the additional costs. 3. What part of the production process limited output lev. In the end, the decisions LeapFrog made to respond to the els at Capable Toys? How did Capable respond to the surging demand for LeapPads turned out to be the right one. challenge? While LeapFrog struggled financially in recent years, in 2013 4. What were some of the material sourcing challenges the company made $84 million on sales of $553 million. And LeapFrog and capable Toys faced? How did they resolve the company has used its success with the Leap Pad product line these problems? (discontinued in 2008) to launch a wider range of educational 5. What type of logistics solutions did LeapFrog use to get the toys to the stores on time? What are the strengths toys that incorporate even more sophisticated electronics and weaknesses of these solutions? If it had been August Questions rather than December, what other options might Leap- Frog have used? 1. Draw a map of the supply chain for LeapFrog, including 6. In the chapter, we described agility as an enduring trend the retailers, Capable Toys, and suppliers of key materials in operations and supply chain management. In your lle. Tyvek). Which supply chain partners are upstream of opinion, did LeapFrog and Capable Toys demonstrate LeapFrog? Which are downstream? Which partners are agility in responding to the new market demands? first-tier suppliers? Second-tier suppliers? les figures within a few months Supply Chain Constraints 18 PARTI CEATING VALUE THROUGH OPERATIONS AND SUPPLY CHAINS introductory weekend LeapFrog knew about the when While 160 units might not seem like a lot Leptos forecasting models indicated that if the trend continued to day demand for Leap Pads would be approacimately 7000 more than double what Leapfrog had requested be produce by Capable Toys. LeapFrog and its manufacturing and logistics supply chain partners would have to find a way to produ another 350.000 Leap Pads and move them to retail stones, Within days of developing the revamped demand for LeapFrog started to work with Capable Toys to identily what ncers to work designing two additional mold sets. The third design of the earlier two sets, allowed Capable Toys bonus its production of LeapPads from 3.500 to 6.300 units per At the same time, Capable Toys called on its first pliers to help identify additional sources for the special chips, membranes, and other electronics used in the leap Finding a source for the Tyvek paper was a little bit trider gain access to this key material. Leapfrog had to contract a5.company for the printing. While this added to the UCTS costs, Leapfrog management felt this was a better native than running out of units and alienating retailers and With the production capacity and material con resolved. LeapFrog had one final problem getting the CASE STUDY Supply Chain Challenges at LeapFrog Introduction A supply chain consists of a network of companies linked together by physical, Information and motary flous. When supply chain partners work together, they are able to accom- plish things that an individual firm would find difficult, if not impossible to do. Few cases illustrate this better than the situa- tion faced by LeapFrog in August 2003.12 LeapFrog, which describes itself as a leading designer developer and marketer of innovative technology-based edu. cational products and related proprietary content." had just steps would need to be taken to increase production knee introduced a new educational product called the Little Touch They found that several constraints had to be resolved: Leapad. The distinguishing feature of the LeapPad, whose target market was toddlers, was that it combined high-tech Production molding constraints. To manufactures materials and sophisticated electronics to create an interactive required plastic parts used in the LeapPad. Capable on "hook that made appropriate sounds when a child touched had designed and built two sets of mold tools capable of certain words or pictures producing the equivalent of 3.500 LcapPads each day. I While LeapFrog was confident the toy would be popular, these mold tools were run for 60 days, they could produce no one--including the retailers, LeapFrog and Capable Toys only 3.500 X 60 - 210.000 additional unitsfar short of the Chinese manufacturer who had primary responsibility the quantity needed for producing the leap Pads knew for sure what actual con Material constraints. Capable Toys and LeapFrog fand sumer demand would be. Such uncertainty, which is typical a limited supply of key components, including customs for the toy industry, can be particularly problematic because designed dectronics and Tyvek, a special water the demand for toys is concentrated around the November and drool-proof paper. December holiday season, giving supply chain partners little Logistics constraints. Even if Capable Toys was able w time to react. Furthermore, toy companies planning for holi- day sales have traditionally had to place orders many months produce the additional toys required. LeapFrog had to in advance---in February or March to allow enough time for consider how best to get those units from China to US products to work their way through the supply chain and to retail shelves. Traditionally, toys produced in China retailers' shelves. In effect, toy companies had one chance to get eled by ship. Although this option was relatively slot it right. If a toy company ordered too few copies of a particular kept down costs. But with production creeping into Set toy in February or March, customers in November and Decem tember and October, LeapFrog had to consider the ber went away disappointed, and the toy company lost signifi- more expensive, options cant revenues; if a toy company ordered too many, the result was leftover toys that had to be sold at a steep discount or loss. How did LeapFrog and its supply chain partners recht By 2003, however. LeapFrog had developed a new these constraints Firsi. Capable Toys put its in-house est approach that used sophisticated forecasting systems, fast information flows and cooperation between supply chain part- mers, and a flexible manufacturing base to improve the respon- siveness of the toy supply chain. Here's how it happened. E-commerce, Relationship Management, and Forecasting The first inkling that the Little Touch LeapPad was a hit came in early August 2003, when major retailers such as Target and Toys 'R' Us showed sales of 360 units during the intro- ductory weekend. In previous years, these retailers might have hesitated to share such detailed sales information with a toy company. By 2003, however, retailers realized that sharing sales information in real time with LeapFrog would increase the toy company's odds of meeting surging market demand. The result was that by the Monday following the an SOX increase their customers CHAPTER 1 INTRODUCTION TO OPERATIONS AND SUPPLY CHAIN MANAGEMENT 19 to the stores in time for the holiday season. Because of the short lead time, LeapFrog was forced to use air shipping and 2. What data ultimately led to LeapFrog's decision to special fast shipping, which added $10 to $15 to the cost of increase production levels of the LittleTouch LeapPads? cach LeapPad. These additional costs ate into the profit of the Where did these data come from? How long after inter- LeapPad, which sold for $35, but as with the Tyvek paper, Leap- preting these data did LeapFrog start talking with Capable Frog management felt that the long-term satisfaction of retail Toys about increasing production levels was it days, wecks, or months? ers and customers outweighed the additional costs. 3. What part of the production process limited output lev. In the end, the decisions LeapFrog made to respond to the els at Capable Toys? How did Capable respond to the surging demand for LeapPads turned out to be the right one. challenge? While LeapFrog struggled financially in recent years, in 2013 4. What were some of the material sourcing challenges the company made $84 million on sales of $553 million. And LeapFrog and capable Toys faced? How did they resolve the company has used its success with the Leap Pad product line these problems? (discontinued in 2008) to launch a wider range of educational 5. What type of logistics solutions did LeapFrog use to get the toys to the stores on time? What are the strengths toys that incorporate even more sophisticated electronics and weaknesses of these solutions? If it had been August Questions rather than December, what other options might Leap- Frog have used? 1. Draw a map of the supply chain for LeapFrog, including 6. In the chapter, we described agility as an enduring trend the retailers, Capable Toys, and suppliers of key materials in operations and supply chain management. In your lle. Tyvek). Which supply chain partners are upstream of opinion, did LeapFrog and Capable Toys demonstrate LeapFrog? Which are downstream? Which partners are agility in responding to the new market demands? first-tier suppliers? Second-tier suppliers? les figures within a few months Supply Chain Constraints 18 PARTI CEATING VALUE THROUGH OPERATIONS AND SUPPLY CHAINS introductory weekend LeapFrog knew about the when While 160 units might not seem like a lot Leptos forecasting models indicated that if the trend continued to day demand for Leap Pads would be approacimately 7000 more than double what Leapfrog had requested be produce by Capable Toys. LeapFrog and its manufacturing and logistics supply chain partners would have to find a way to produ another 350.000 Leap Pads and move them to retail stones, Within days of developing the revamped demand for LeapFrog started to work with Capable Toys to identily what ncers to work designing two additional mold sets. The third design of the earlier two sets, allowed Capable Toys bonus its production of LeapPads from 3.500 to 6.300 units per At the same time, Capable Toys called on its first pliers to help identify additional sources for the special chips, membranes, and other electronics used in the leap Finding a source for the Tyvek paper was a little bit trider gain access to this key material. Leapfrog had to contract a5.company for the printing. While this added to the UCTS costs, Leapfrog management felt this was a better native than running out of units and alienating retailers and With the production capacity and material con resolved. LeapFrog had one final problem getting the CASE STUDY Supply Chain Challenges at LeapFrog Introduction A supply chain consists of a network of companies linked together by physical, Information and motary flous. When supply chain partners work together, they are able to accom- plish things that an individual firm would find difficult, if not impossible to do. Few cases illustrate this better than the situa- tion faced by LeapFrog in August 2003.12 LeapFrog, which describes itself as a leading designer developer and marketer of innovative technology-based edu. cational products and related proprietary content." had just steps would need to be taken to increase production knee introduced a new educational product called the Little Touch They found that several constraints had to be resolved: Leapad. The distinguishing feature of the LeapPad, whose target market was toddlers, was that it combined high-tech Production molding constraints. To manufactures materials and sophisticated electronics to create an interactive required plastic parts used in the LeapPad. Capable on "hook that made appropriate sounds when a child touched had designed and built two sets of mold tools capable of certain words or pictures producing the equivalent of 3.500 LcapPads each day. I While LeapFrog was confident the toy would be popular, these mold tools were run for 60 days, they could produce no one--including the retailers, LeapFrog and Capable Toys only 3.500 X 60 - 210.000 additional unitsfar short of the Chinese manufacturer who had primary responsibility the quantity needed for producing the leap Pads knew for sure what actual con Material constraints. Capable Toys and LeapFrog fand sumer demand would be. Such uncertainty, which is typical a limited supply of key components, including customs for the toy industry, can be particularly problematic because designed dectronics and Tyvek, a special water the demand for toys is concentrated around the November and drool-proof paper. December holiday season, giving supply chain partners little Logistics constraints. Even if Capable Toys was able w time to react. Furthermore, toy companies planning for holi- day sales have traditionally had to place orders many months produce the additional toys required. LeapFrog had to in advance---in February or March to allow enough time for consider how best to get those units from China to US products to work their way through the supply chain and to retail shelves. Traditionally, toys produced in China retailers' shelves. In effect, toy companies had one chance to get eled by ship. Although this option was relatively slot it right. If a toy company ordered too few copies of a particular kept down costs. But with production creeping into Set toy in February or March, customers in November and Decem tember and October, LeapFrog had to consider the ber went away disappointed, and the toy company lost signifi- more expensive, options cant revenues; if a toy company ordered too many, the result was leftover toys that had to be sold at a steep discount or loss. How did LeapFrog and its supply chain partners recht By 2003, however. LeapFrog had developed a new these constraints Firsi. Capable Toys put its in-house est approach that used sophisticated forecasting systems, fast information flows and cooperation between supply chain part- mers, and a flexible manufacturing base to improve the respon- siveness of the toy supply chain. Here's how it happened. E-commerce, Relationship Management, and Forecasting The first inkling that the Little Touch LeapPad was a hit came in early August 2003, when major retailers such as Target and Toys 'R' Us showed sales of 360 units during the intro- ductory weekend. In previous years, these retailers might have hesitated to share such detailed sales information with a toy company. By 2003, however, retailers realized that sharing sales information in real time with LeapFrog would increase the toy company's odds of meeting surging market demand. The result was that by the Monday following the an SOX increase their customers