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OPERATIONS MANAGEMENT
HOW NOTEBOOKS ARE MADE
TABLE OF CONTENTS
IntroductionThe VideoAnalysis & MethodologyAnalysis of the Supply ChainLean SystemsQuality ControlForecasting/InventoryNew Product DevelopmentLegal PerspectivesReferences
VIDEO - MEAD SCHOOL SUPPLIES
ANALYSIS & METHODOLOGY
First Tier – E-Mails to Different FirmsSecond Tier – Financial Statements filed with the SECThird Tier – Industry Analyses, News Reports, Westlaw
Database
SUPPLY CHAIN ANALYSIS
Paper SuppliersFrom all over the world
Increasing gradually from Brazil & China
Wood suppliers Paper suppliers Mead
SUPPLY CHAIN ANALYSIS
SUPPLY CHAIN ANALYSIS
Notebook-Producing Machinery Suppliers
Mainly from India & ChinaExtremely fixed machineryPart Suppliers Machinery Suppliers Mead
SUPPLY CHAIN ANALYSIS
Problem 1 : Fixed Machinery
Difficult to modify the size of notebooks
Problem 2 : Change to New Sources of Wood Supply
Until now : Mead has been mainly supplied within America.
Current : Low price in Brazil & China
Problem 3 : Excessive Dependence
The ten largest distributors take up 49%, and
Office Depot & Staples account for 24% of the total sales.
QUALITY CONTROL
Automated production processMachines do most of the workProblem?
Equipment failure ⇒ Quality risk ⇒ lost of customers/profits, cre-ates waste, delays production schedule
SolutionHire workers
Quality inspection (random selection)Mechanics on site for maintenance and inspection of machinery Emergency reporting system
FORECASTING
Financial statement explicitly mentions demand seasonal-ityPeak Season : back-to-school
Why? Back to School Season! Third Quarter in America, Fourth Quarter in Australia
Global Expansion
+ Asia/South America : 1st Q Back to School Season / ex. Molesk-
ine
3rd Q America, 4th Q Australia
FORECASTING
With global expansion into Asia/South America; can reduce seasonal trends
Question : How can we reduce demand seasonality?
INVENTORY
Influence on Inventory
Must innovate the inventory system.
Inventory level increased during light demand periods (first, second quar-
ters)
for preparing for heavy demand periods(third, forth quarters)
→ Makes inventory holding costs high
Current Situation : Demand Seasonality
How to reduce Inventory Holding costs
Capital, storage and warehousing, insurance if forecasting correctly
Maintaining quality of inventory and managing if using EDI technology
INVENTORY
Forecasting Correctly
Notebook industry has constant market size → Mead uses past data
Using electronic document interface (EDI) technology results in
faster turnaround, less paper work, and savings on handling
Implement EDI Tech-nology
By forecasting correctly, Mead can choose suitable storage and ware-housing.Can reduce fixed costs related to inventory.
By using EDI technology, Mead can reduce inventory costs by having more information about inventory
NEW PRODUCT DEVELOPMENT: ANALYSIS
Nature of MEAD products
School and office suppliers with no distinct features
No breakthrough/innovative product lines
Why is MEAD successful?
Dominating N. America as a first mover
Consumers do not expect much innovation
NEW PRODUCT DEVELOPMENT
Suggestion 1 Eco-friendly, high quality products
15%
49%
28%
8%
"Would you be ready to pay more to benefit from prod-
ucts/services that help reduce the level of carbon emis-
sions?"Yes, certainly Yes, ProbablyNo, probably not
No, certainly not
NEW PRODUCT DEVELOPMENT
Suggestion 2 Business-purpose notebooks
vs
Caution : Difficult to change size or paper of products in a fixed machine
To extend product lines , must order new machines, plants…
etc. etc.
LEGAL ISSUES
Potential danger 1 : Injuries and accidents
Safety measures are needed
Increase employee satisfaction and morale
Potential danger 2 : Harmful chemicals
Some paper mills have higher cancer rates due to Abestos, a
dust-like fiber
Meet governmental requirements
REFERENCES
ACCO Brands Income Statement Q3 2012
ACCO Brands Financial Statements 2010
The Stationary, Office and School Supplies Market in the EU, CBI
Market Survey 2009
Trends in Manufacturing Paper Products, Accenture Research
2008
KMAC Brand Power Analysis
Lineomatic Graphic Industries
Westlaw Legal Database