OPERATIONS MANAGEMENT HOW NOTEBOOKS ARE MADE

Introduction The Video Analysis & Methodology Analysis of the Supply Chain Lean Systems Quality Control Forecasting/Inventory New Product Development Legal Perspectives References

First Tier – s to Different Firms Second Tier – Financial Statements filed with the SEC Third Tier – Industry Analyses, News Reports, Westlaw Database

Paper Suppliers From all over the world Increasing gradually from Brazil & China Wood suppliers  Paper suppliers  Mead

Notebook-Producing Machinery Suppliers Mainly from India & China Extremely fixed machinery Part Suppliers  Machinery Suppliers  Mead

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.

Automated production process Machines do most of the work Problem? Equipment failure ⇒ Quality risk ⇒ lost of customers/profits, creates waste, delays production schedule Solution Hire workers Quality inspection (random selection) Mechanics on site for maintenance and inspection of machinery Emergency reporting system

Financial statement explicitly mentions demand seasonality Peak Season : back-to-school Why? Back to School Season! Third Quarter in America, Fourth Quarter in Australia

Global Expansion + Asia/South America : 1 st Q Back to School Season / ex. Moleskine 3 rd Q America, 4 th Q Australia With global expansion into Asia/South America; can reduce seasonal trends Question : How can we reduce demand seasonality?

Influence on Inventory Must innovate the inventory system. Inventory level increased during light demand periods (first, second quarters) 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

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 Technology By forecasting correctly, Mead can choose suitable storage and warehousing. Can reduce fixed costs related to inventory. By using EDI technology, Mead can reduce inventory costs by having more information about inventory

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

Suggestion 1 Eco-friendly, high quality products

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.

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

ACCO Brands Income Statement Q 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