OPERATIONS MANAGEMENTHOW 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 worldIncreasing gradually from Brazil & ChinaWood 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 MachineryDifficult to modify the size of notebooks

Problem 2 : Change to New Sources of Wood SupplyUntil now : Mead has been mainly supplied within America.Current : Low price in Brazil & China

Problem 3 : Excessive DependenceThe ten largest distributors take up 49%, andOffice 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 correctlyMaintaining quality of inventory and managing if using EDI technology

INVENTORYForecasting 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 productsSchool and office suppliers with no distinct featuresNo breakthrough/innovative product lines

Why is MEAD successful?Dominating N. America as a first moverConsumers 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 DEVELOPMENTSuggestion 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 accidentsSafety measures are neededIncrease employee satisfaction and morale

Potential danger 2 : Harmful chemicals Some paper mills have higher cancer rates due to Abestos, a

dust-like fiberMeet governmental requirements

REFERENCES

ACCO Brands Income Statement Q3 2012ACCO Brands Financial Statements 2010The Stationary, Office and School Supplies Market in the EU, CBI

Market Survey 2009Trends in Manufacturing Paper Products, Accenture Research

2008KMAC Brand Power AnalysisLineomatic Graphic IndustriesWestlaw Legal Database