Pio Carlo Pastorfide Darryl Glen Villaceran Thania Giron LeapFrog Case Study Supply Chain Management 5 Table of Contents Introduction ............................................................................................................................................ 2 Background ......................................................................................................................................... 2 Scope ................................................................................................................................................... 2 Body ........................................................................................................................................................ 3 1.LeapFrog Supply Chain Map. ........................................................................................................... 3 2.Data to increase the production ...................................................................................................... 3 3.Capable Toys respond to the challenge ........................................................................................... 4 4.Material Sourcing challenges ........................................................................................................... 4 5.Logistics solutions: ........................................................................................................................... 5 6.Agility to respond the new market demands .................................................................................. 5 Conclusion ............................................................................................................................................... 6 Strategic partnership .......................................................................................................................... 6 Modes of transportation..................................................................................................................... 6 Manufacturing engineering ................................................................................................................ 6 References .............................................................................................................................................. 7 Introduction Background LeapFrog Enterprises, Inc. is one of the leaders in toys for the kids. Their main core business is to create innovative child's devices that create curiosity and love of learning. LeapFrog has more than 20 years of experience in educational products. This California-based company is combining imagination, knowledge, and learning with playtime. In 2018, LeapFrog received recognition for its outstanding tablet products, and has consistently earned accolades from the annual Brain Child Tillywing toy awards. This company takes care of the learning for each stage of childhood, thus resulting in a diverse range of age-specific options for young learners. Scope In this case study, we will present the logistical and raw material issues that LeapFrog faced and how they solved to meet the demand for the peak season for November and December. The case study, however, doesn’t cover the forecasting methods LeapFrog used that gave them 700,000 as the forecasted demand for Leap Pad for the holiday period. Body 1.LeapFrog Supply Chain Map. 2.Data to increase the production According to the case study, the increase in production levels of the LeapPads is based on the 2 critical data: Sales Data and Timing. The data came from Target and Toys “R” Us, two of the major retailers, who provided real-time sales information for the LittleTouch LeapPads. In the past, retailers would have a hard time sharing a detailed sales report. The case study did not specify why but “companies share a common misconception that they need to hide their data and never reveal it to other companies unless they’re compensated for it” (Hakami, 2021, para. 4). So, the decision of the 2 retailers to share their sales data and how fast it came speaks highly of how these 3 organizations value relationship management. Shortly after receiving the sales data, LeapFrog started talking with Capable Toys about increasing production. While the case study doesn't provide an exact timeline, it suggests that discussions began within days of developing the updated demand forecast based on the initial sales data. This indicates that the decision to increase production levels and the discussions with Capable Toys happened quickly, likely within days rather than weeks or months, due to the urgent need to meet surging market demand for the holiday season. 3.Capable Toys respond to the challenge The bottleneck in Capable Toys' production process was their molding phase. Initially, they had just two molding tool that can produce 3,500 LeapPads daily. This limited production capacity proved insufficient to meet the surge in demand for LeapPads, resulting in an output of only approximately 210,000 units over two months. To address this challenge and increase their production capacity, Capable Toys started the following actions: 1. Development of Additional Mold Sets: Capable Toys mobilized its in-house engineering team to create two supplementary mold sets, aiming to enhance the daily production rate of LeapPads. 2. Introduction of the Third Mold Set: By October, Capable Toys introduced a third mold set, which represented an improvement over the existing designs. This enabled the company to increase and improve their production capacity by 80%. Production Max Capacity days 3,500 60 210,000 6,300 60 378,000 Sets September October Increased capacity for 80% 4.Material Sourcing challenges Due to the forecasted surge in demand, LeapFrog and Capable Toys faced shortages in key components in making LeapPads such as: specialized chips, membranes and other electronics used in LeapPads. They also had supply challenges with Tyvek Paper, a water-based (or drool-based) material. To address these issues: 1. Capable Toys worked together with their primary suppliers to explore new potential sources for the unique electronic components. This step was taken to guarantee a dependable and consistent supply of critical parts required for manufacturing LeapPads. 2. In the case of Tyvek paper, LeapFrog had to engage a U.S.-based company for the printing of this material. Although this decision increased the overall production expenses, it was made to secure a continuous and uninterrupted supply of Tyvek paper. 5.Logistics solutions: The normal via of transportation that LeapFrog used was the cheapest one: by sea. After the capacity issues, Leapfrog had to think of a more efficient, albeit an expensive solution: air transportation. Leapfrog expedited the final product to have at all retailer locations ready for the peak season November-December which is Christimas period. 6.Agility to respond the new market demands LeapFrog and Capable Toys exhibited agility in their response to new market demands. The actions they took in a short period of time allowed them to overcome major obstacles and ensured that they had the right product at the right place, at the right time. While these actions (adding another molding set, adding in-house engineers, and adding new suppliers for critical materials) had impact to their profit margins, they still turned out to be the right decisions as they were able to meet the customers’ demand. As a result, brand awareness has increased amongst consumers and eventually enabled the company to launch a wider range of more sophisticated educational toys. Conclusion In this case study, LeapFrog Enterprises, Inc. showed exceptional agility in the face of uncertainty and overcoming supply chain obstacles in launching their product line, the LittleTouch LeapPad. Partnered with large retailers, such as Target and Toys “R” Us, and manufacturers, such as Capable Toys, LeapFrog positioned their products for mass distribution in the summer of 2003. In preparation for a massive sales surge expected in the holiday season, LeapFrog analyzed data received from retail partners and identified that demand was projected to be double the expectations. In August of 2003, LeapFrog’s maximum product output was 350,000 units, and demand forecasted was 700,000 units. Due to the agile nature of their supply chain, LeapFrog increased 3 major inputs into their manufacturing and distribution network to scale up production rapidly; strategic partnerships, modes of transportation, and manufacturing engineering. Strategic partnership The Strategic Partnership of LeapFrog with Capable Toys, Target, and Toys "R" Us was a key factor as collaboration, information sharing, joint problem-solving, production capacity expansion, supplier engagement, logistics adaptation, shared risk management can really help with leveraging success for sustainable long-term growth. It was instrumental in effectively responding to market demands and achieving the respective business objectives. Modes of transportation LeapFrog's mode of transportation for their products, particularly during periods of high demand such as the holiday season, involved various methods, including air shipping. They utilized air transportation to ensure timely delivery of their educational products to retailers' shelves. This choice, while more expensive than other modes like shipping by sea, allowed them to meet the tight deadlines associated with the holiday season and respond swiftly to surges in market demand. This adaptability in their transportation strategy was a crucial component of their agile supply chain management. Manufacturing engineering LeapFrog's manufacturing engineering teams play a pivotal role in managing and optimizing manufacturing operations to meet the increased demands efficiently while upholding product quality and integrity. Their expertise and adaptability are key factors in the company's ability to respond effectively during periods of heightened demand. References Hakami, J. (2021, November 10). Why Brands And Retailers Should Share Data And How To Get There. Forbes. https://www.forbes.com/sites/forbestechcouncil/2021/11/10/why-brands-andretailers-should-share-data-and-how-to-get-there/?sh=5e84c5df10a8 LeapFrog. (2023). Retrieved from LeapFrog Enterprises, Inc.: https://store.leapfrog.com/enus/academy/landing
