Case Study Of Toys, Inc.

Submitted By slowlearner87
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Many companies will encounter a time when their product sales start to slow down in their market sector. During this time companies need to determine whether the reasons are external and internal. Lack of consumer interest, defective products, recalls, and cost of product are just some of the many reasons that could be causing such an issue. Solutions to those problems need to be found, but costs associated with the solutions need to be analyzed to make sure it is in the best interest of the company to follow one solution over another. Toys, Inc. has found themselves in this very dilemma and need to rectify the problem to bring their company back to profitability. At the moment, Toys, Inc. has been having multiple issues with their working models line of toys. The issues that have been plaguing the models are the moving parts becoming disengaged and operating erratically or not at all. The company has had proposals from multiple of their employees and they now have to determine which proposal they are going to follow in order to bring the company back to probability. The solution proposed by the production manager, Ed Murphy, is to make cuts to the design and product development department. This proposal has the possibility to hurt the company more than it could help. Over the last twenty years, Toys, Inc. has been able to build a reputation on quality and innovation with their products. By decreasing the size of the design and product development department, the company could risk losing the innovation that its consumers are seeking. Ed Murphy’s solution would not solve the current issue, but in my opinion would compound the issue at hand.
The proposal by Steve Bukowski, a production assistant, is to have 100% inspection of the final product. His proposal, while focusing on the quality aspect of the products, will potentially raise the costs that the company has to pay to rectify the issue. Conducting the inspections will, when done correctly, catch defects of the products in the plant, unfortunately the process cannot account for issues with shipping or for unintended use of the products. The costs of inspections, the resulting interruption of a process or delays caused by inspections, and the manners of testing typically outweigh the benefits of 100% inspection (Stevenson, 2012). Inspections can have a part in the final solution, but due to the issues stated, in my opinion, a complete 100% inspection of the product would burden the company.
The last proposal that could be used is by Keith McNally, assistant to the VP of sales. Keith approaches the issue on two fronts, in which he is trying to appease the consumer and gain additional profit for the company. He wants to set up a trade-in program so that if the product is defective it can be returned for a new one. That returned product would then be fixed and resold at a lower price. The staff would not have to be let go and would be used in the off season to make repairs to the defective products. Keith’s proposal doesn’t take into account for the quality of the product. Consumers may be satisfied by getting a new product, but if the product continues to break then it will poorly affect the company’s reputation. The same could be said if a refurbished model breaks after being fixed.
My opinion is that the company should use Steve’s and Keith’s ideas, but with modifications to both proposals. Toys Inc. should start inspections of the product at a certain stage of processing, but not at a frequency of 100%. They should try to establish an optimal point at which defects are decreased, but the price of the inspection isn’t overly burdensome for the company. This will decrease the amount
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