Animated Training Videos

If you drop a frog into boiling water, it immediately jumps out. However, if you put a frog in a pot of room-temperature water, and then bring the water to a boil very, very slowly, the frog will stay in the water until it can no longer survive. It’s an apt metaphor for the the conditions we face today.

Looking at the history of toy manufacturing starting in Europe with simple wooden toys and dolls, then shifting to Japan as Europe fell into war. The resurgence of American manufacturing in response to the baby boom. Then moving manufacturing to Japan to manage costs, which then went to lower cost countries such as South Korea and Taiwan finally moving to the heydays in the 80’s to Hong Kong and China.

Hasbro have been successfully working with manufacturers in Mainland China for the past 30 years plus. However, slowly but surely labour costs continue to rise, materials costs go up and the RMB has appreciated in value putting immense pressure on our margins.

So unlike the frog, instead of getting used to the boiling water we need to seek out new ways of doing things.

Our solution will be threefold:

1. To explore low cost / high technology countries.

2. To move ourselves up the value chain.

3. Be specialist instead of generalist.

Whilst we certainly want to continue our manufacturing capability in China, we need to seek out global options to keep the manufacturing cost base down.

We now need to look globally for low cost, high technology manufacturers. Countries such as India, Turkey or Vietnam for example.

The benefits are not simply lower costs but the opportunity to capitalise on new technology, innovation in manufacturing and materials.

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