Supply chain management plays a pivotal role in today’s globalized economy. It encompasses the coordination and integration of various activities such as sourcing, procurement, production, and distribution to deliver products to end customers effectively: at the right time, at the right place, with the right level of quality and for the lowest cost.
While academic literature often focuses on traditional use cases and real-world examples, it is worthwhile to also explore unconventional sources that can shed light on successful supply chain management strategies.
The highly anticipated 2023 American fantasy film Barbie premiered at the Shrine Auditorium in Los Angeles on July 9, 2023, and was released in the United States on July 21, by Warner Bros. However, beyond its entertainment value and when examining it from a supply chain perspective, the movie uncovers valuable insights into effective strategies for managing complex networks. Let’s have a look at what we can learn from it regarding successful supply chain management.
No supply chain runs in isolation. Network collaboration plays a crucial role in building successful supply chains. It is crucial for organizations to acknowledge the costs associated with poor collaboration, including increased lead time, inefficient inventory management, high costs, increased risk of disruptions, missed opportunities and loss of business reputation.
Barbie was promoted with an extensive marketing campaign (more than $145 million budget) and, in the months leading up to the release of the film, Mattel Inc. entered into dozens of Barbie-themed promotional partnerships and collaborations. Everywhere you look, from haute couture to fast food, it seems there is an “X” Brand x Barbie collection who aren’t hesitating to paint their world in pink. There are Barbie-branded roller skates, toothbrushes, and cans of lemonade (pink obviously).
This reminds us of the importance of establishing strong relationships with suppliers, manufacturers, distributors and retailers by sharing information and resources across all stages of the supply chain process. Connecting these functions enables businesses to have end-to-end visibility and control across the supply chain and react faster in case of unexpected events. Fostering effective collaboration leads to improved operational efficiency, reduced costs, enhanced customer satisfaction and a competitive advantage in today’s dynamic business landscape.
When Greta Gerwin hired the production designer Sarah Greenwood and set decorator Katie Spencer on the movie, she told them to spare no expense when it comes to covering Barbie’s world in pink. Speaking to Architectural Digest, Gerwin revealed that the team constructed the movie’s fluorescent Barbie Land sets almost entirely from scratch, all the way down to the sky. The result was that “the world ran out of pink” she said.
So much pink was needed to recreate Barbie Land on the Warner Bros. set that the production team faced a significant challenge in sourcing enough pink paint due to global supply shortages. The paint company, Rosco, which produces the special pink shade was already facing supply chain issues due to Covid-19 and a deep freeze in Texas. On top of this, the popularity of all things pink, driven by the Barbie fever, has led to fashion, beauty and homeware brands jumping on the trend. All the manufacturers buying paint in bulk for various projects have then been affected by this shortage.
This situation emphasizes the vital need for agility and adaptability within supply chains. When market conditions change fast, being prepared matters more than ever. Companies need the ability to continuously design and optimize their S&OP process strategies in ways that reduce costs, mitigate risks, and increase service levels with agility.
Adopting agile manufacturing practices and proactive risk management allows organizations to quickly respond to unforeseen events and changing market conditions. By anticipating all possible situations and assessing the impact of various business decisions or unexpected events on their KPIs, decision-makers can mitigate risks and manage them before a big disruption happens.
One key lesson that the film teaches us is the importance of accurate demand forecasts. In fact, it took 64 years to finally make a Barbie movie. Despite being a cultural staple since 1959, this will be the first time Barbie stars in a live-action movie. But once the movie was released, it generated a neon pink buzz and crossed the $1 billion box-office line, joining the ranks of movies like Titanic, Avatar or Harry Potter.
This highlights that understanding customer preferences and market trends is the first step in anticipating demand fluctuations accurately. In the context of supply chain, by understanding what customers want and when they want it, businesses can ensure that the right products are available at the right time. This leads to improved customer satisfaction as orders are fulfilled promptly, reducing stockouts or delays.
Digital transformation plays a crucial role in allowing businesses to gain a more comprehensive understanding of customer behavior and changing market dynamics. The use of safety stocks or inventory formulas to protect against variability is no longer viable today. Companies need to understand and measure the variability in demand and be able to predict it more accurately with an enterprise-wide solution that can look at thousands of forecasts and be able to choose the optimal one. They should be able to answer questions such as “ What if I raise prices by 2%? What if I add another marketing promotion and increase advertising by 7%, how will that impact my future demand?”.
Advanced algorithms, AI and simulation technology not only improve forecast accuracy but also assess risk and uncertainty associated with demand forecast, helping businesses find the best trade-offs between competing objectives, and optimize inventory levels and resource allocation while meeting customer expectations. This way organizations are being proactive versus reactive: they are not reacting to the forecast but proactively driving the forecast.
“Go ahead. Google “Barbie” right now and watch your search page explode in pink fireworks.”, Amy Laskowski wrote for Boston University Today. Following the movie’s trailer debut, Google recorded a 271% increase in the keyword search “Barbie” and hit a five-year peak after the movie’s second teaser was released. Content with #Barbiecore is hitting over 500 million views on Tik Tok and Barbie-related toys are creeping into Amazon’s Top 100 list.
We should not forget that Barbie is also a part of the toy industry. With 165 brand partners at thousands of retail locations, Barbie-themed merchandise is selling out fast. Traditional Barbie doll sales, which were down 7% in the second quarter, were also experiencing a “halo effect” after the movie’s release, shooting up 25% after the film’s release. This is another example of how the movie becomes the center of gravity that generates more activity in relation to the whole Barbie brand affecting several supply chains in the world.
Sensing and recognizing the potential demand for toys is the first step, however, ensuring the optimal inventory on hand can be hard. Despite the significant increase in sales of Barbie products, Mattel Inc. CFO Anthony DiSilvestro said in a statement that retailers were still cautious about filling their stockrooms with more toys. What happens is that, since 2022 and along with high inflation and mortgage rates hitting the roof, spending is down big time, especially on toys. While customers bought lots of toys during the Covid-19 pandemic as an antidote to boredom, demand has been more sluggish since then. So finding the optimal inventory level can be quite a challenge.
Every supply chain leader knows how poor inventory management can kill a brand. Outdated methods such as manual inventory tracking or using Excel spreadsheets lead to errors and ordering issues. Inadequate inventory reports and demand forecasting without accurate information can lead to excessive or insufficient ordering, shortages and even customer loss.
The upcoming Nike release of the Barbie Dunk Low sneakers reminds us of the inventory management challenges faced by Nike in the early 2000’s. After losing around $100 million in sales due to issues with managing its inventory, the world’s most recognized athletic brand implemented an inventory management software that promised accurate demand forecasting but experienced lots of bugs and data errors resulting in inaccurate forecasts. This led to more significant financial losses that continued until 2016, impacting gross margins due to the incorrect percentage of discounted sales.
The case illustrates the importance of choosing reliable software solutions that ensure data quality and result accuracy for optimal inventory management. The rise of cutting-edge technology such as AI and simulation provide organizations with highly accurate plans helping them improve customer satisfaction, reduce costs, enhance cash flow, and maintain a competitive edge on the market.
Quality control is another critical aspect of successful supply chain management. Living in a Barbie world is about performance and perfection. Barbie Land comes to life in the details. In the movie, every accessory and outfit is meticulously crafted to reflect perfection. Everything in Barbie Land is built to a specific scale to look “toyetic” and most of the props on set were painted by hand, from the trees to the pool that sits outside of Barbie’s Dream House. Oscar-winning costume designer Jaqueline Durran was charged with replicating some of Barbie’s most iconic looks. The soundtrack is filled with today’s top artists, but even the singers were chosen with intention. This reminds us of the importance of maintaining and prioritizing high-quality standards and control measures at every stage of the production process.
Great quality control in supply chains offers several benefits. Firstly, it enhances customer satisfaction by meeting or exceeding their expectations leading to customer loyalty and new customers. Effective quality control reduces costs linked to the returns, complaints and warranty claims. Furthermore, it ensures compliance with industry regulations and provides a competitive advantage in the market by differentiating supply chains from competitors based on reliability and performance.
By prioritizing quality throughput and deploying solutions that help operational teams identify and address production bottlenecks and issues early in the production process, organizations can drive business growth and achieve all these benefits.
Mattel Inc. spent years refining their supply chain strategy to create smooth operations and a more fluid network. From the moment a Barbie doll is manufactured to its arrival at retail stores, efficient logistics play a critical role. Behind the movie’s scenes, effective logistics also played a crucial role in bringing the film to life. From sourcing materials for set design and costumes to coordinating transportation of props and equipment, effective logistics ensure that all necessary resources are available at the right time to create a magic experience while ensuring a seamless behind-the-scenes process.
Similarly, successful supply chain management requires streamlined transportation, warehousing and distribution to ensure timely delivery at a minimum cost.
No, life in plastic is not fantastic. In recent years, sustainability has become a key consideration within supply chain management due to its growing environmental concerns worldwide. Additionally, the government continues to implement measures to discourage the use of unsustainable materials like single-use plastics.
Interestingly enough, the film incorporates environmental themes that highlight the significance of sustainable practices such as ethical trade and procurement methods. Implementing sustainable supply chain strategies helps reduce waste, minimize carbon footprint, and positively impact brand reputation. By ensuring transparency across the entire supply chain companies can build trust among customers who increasingly value ethical considerations when making purchasing decisions.
The utilization of cutting-edge methods and technologies is one of the movie’s notable features. For example, a specifically developed remote control transmitter with virtual reality drone technology was used to drive Barbie’s electric automobile. The movie subtly introduces viewers to various other technologies such as barcode scanning or automated systems that streamline logistics processes and enable real-time monitoring.
Furthermore, an AI-powered interactive selfie generator barbieselfie.ai joined forces with Warner Bros and their marketing agency to create the official filter that allowed fans to turn themselves into Barbie characters. Downloaded more than 80 million times, the Photo Room API has been used over 13 million times and has become increasingly popular among various types of businesses to create high-quality product imagery.
This emphasizes how industry leaders can harness advanced technologies to optimize their supply chains for enhanced productivity and maximum returns.
From collaborative efforts among stakeholders, adaptability in changing markets, efficient inventory management to sustainability practices and digital transformation, these principles apply across all industries. By embracing these insights, businesses can optimize their supply chain for enhanced performance, profitability and customer satisfaction.
So next time you watch a Barbie movie or see those iconic dolls on shelves, remember that even in their glamorous world lies valuable lessons for successful supply chain management.