The question below is from the attached image of a video case file from Operations Management: Processes and Supply Chains (11th Edition) by Krajewski, L. J., Malhotra, M. K. & Ritzman, L. P. Attached a video case discussion from chapter 12. Question three is here below:3. Regarding the design of the Washable Deluxe Painting Kit supply chain, Crayola must evaluate the strategy of next-shoring in Asia or retaining an existing network that involves the assembly of the kits in the U.S. Compare and contrast these two supply chain designs from perspective of the decision factors and pitfalls for outsourcing discussed in the text VIDEO CASESupply Chain Design at CrayolaCrayola LLC is a profitable wholly-owned subsidiary of Hallmark Cards ofKansas City, Missouri. The company's world headquarters are located inEaston, Pennsylvania and house marketing, sales, operations & manufactur-ing, finance, R&D, Internet services, customer care consumer affairs and cor-porate communications. Sales offices in Easton, Bentonville, Arkansas, andMinneapolis manage domestic accounts, while offices in Canada, Mexico,France, Italy, Japan, and Hong Kong handle international business. TheGlobal Operations Division in Easton is responsible for the sourcing, quality,manufacturing, and logistics of Crayola products worldwide.Two thirds of what Crayola sells globally is produced in its three Penn-WashableDeluxePainting KitCrsyola,sylvania facilities in the Lehigh Valley. The "Forks I" plant is devoted to man-ufacturing crayons and markers, the "Forks II" plant handles plastic molding,and the Lehigh Valley Industrial Park (LVIP) plant creates paints, modelingcompounds, activity kits, and Silly Putty®. A single 800,000 square footdistribution center in nearby Bethlehem, Pennsylvania handles finishedgoods for logistics to U.S. and international customers, and to global busi-ness units.JEABILN m OES OF4 VATERCOLOR PAINTS 4 BRISHES-55AT SACCIThe Washable Deluxe Painting Kit, assembled at Crayola's LehighValley Industrial Park plant, contains paints and watercolors produced inthe USA and paint brushes, a smock, and a sponge produced in Asia.Demand for the kit has grown substantially in international markets,prompting a redesign of the supply chain so that Asian demand canbe satisfied by Asian production facilities capable of producing andassembling the entire kit.Each plant and its products have their own unique supply chains be-cause the raw materials, suppliers and requirements all differ. For example,paraffin wax for crayons comes from sources in Louisiana and Pennsylvaniavia rail tanker cars twice a week, so proximity to the railroad is essential forthe Forks I plant making crayons. All raw materials for each supply chainare first evaluated by independent board-certified toxicologists so Crayola canassure its products are not only of the highest quality, but also safe and non-toxic. Then, design hazard and risk assessments are done for all productsduring development to assure production meets the stringent standards setby the Art and Creative Materials Institute (ACMI).Pete Ruggiero, Executive Vice President-Global Operations and histeam have responsibility for designing supply chains that are innovative, resil-ient, responsive, and sustainable while assuring quality, ethics and cost con-siderations are met. Whenever the company's marketing division develops anew product kit that might contain paints, clays, crayons, markers or otherexpand sales into the growing Asian market. The kit's paints and watercolorsare made by Crayola in the U.S., but the paintbrushes come from China, thesmocks come from Vietnam, and the sponges come from China. Labor costsfor assembling the kits in the U.S. is a significant component, so if Crayolawants to sell the kits internationally, it needs to explore whether it makessense to keep the existing supply chain design in place, or make a changeto begin producing the kits closer to the growth in its international customerproducte tho cupplyLchain COurcin g of tho row matoriale ac woll ac tho downbooo The lynohpin of thie dooigion io that olL oompo nonto (inoluding point expand sales into the growing Asian market. The kit's paints and watercolorsare made by Crayola in the U.S., but the paintbrushes come from China, thesmocks come from Vietnam, and the sponges come from China. Labor costsfor assembling the kits in the U.S. is a significant component, so if Crayolawants to sell the kits internationally, it needs to explore whether it makessense to keep the existing supply chain design in place, or make a changeto begin producing the kits closer to the growth in its international customerbase. The lynchpin of this decision is that all components (including paintand watercolor trays historically manufactured in the United States) need tobe made in Asia to make production efficient, and minimize duties and leadtimes. By producing the entire product–including its components and pack-aging-in Asia, Crayola is able to optimize its delivered cost to the markets.Producing this product in the U.S. and shipping it to Asia would be an impedi-ment because of cost and lead time challenges.during development to assure production meets the stringent standards setby the Art and Creative Materials Institute (ACMI).Pete Ruggiero, Executive Vice President-Global Operations and histeam have responsibility for designing supply chains that are innovative, resil-ient, responsive, and sustainable while assuring quality, ethics and cost con-siderations are met. Whenever the company's marketing division develops anew product kit that might contain paints, clays, crayons, markers or otherproducts, the supply chain sourcing of the raw materials as well as the down-stream production processes must be addressed to be sure the forecasteddemand can be accommodated within the existing facilities. Not long ago, thecompany introduced an innovative new product called ColorWonder® that con-sists of pens that only write on the special paper they are packed with for sale.This required examining whether the existing supply chain could support theaddition of producing the specialized ink markers, where to source the coatedpaper, and how to best create the kits containing both markers and paper.Now in production, ColorWonder® is a best seller worldwide, with nearly40 percent of Japanese sales coming from this product alone. Managersreceived feedback from the market that the pens in the kits were lastinglonger than the paper, so the supply chain responded by creating separatepaper packets so consumers may purchase just the paper after the initialpages in the kit are used. The result of this action has had a ripple effect onthe demand for markers, which is now lower, since consumers are buyingfewer full kits but more Color Wonder® books, so the supply chain and pro-duction had to adjust once again.Another major challenge is the assembly of kits whose componentsare derived from diverse supply chains and assembled into finished productsin the company's LVIP plant. An example is the popular Washable DeluxePainting Kit®. The kit consists of paints and watercolors, paint brushes,smocks for the artist, and sponges for special effects. The company wants toQUESTIONS1. Describe the text's four external and internal pressures on supply chaindesign as they relate to Crayola's supply chains for ColorWonder® andWashable Deluxe Painting Kit®.2. Review the strategic implications of supply chains as described in thetext. Does Crayola have efficient or responsive supply chains, or both?Explain your position.3. Regarding the design of the Washable Deluxe Painting Kit® supplychain, Crayola must evaluate the strategy of next-shoring in Asia orretaining an existing network that involves the assembly of the kits inthe U.S. Compare and contrast these two supply chain designs fromperspective of the decision factors and pitfalls for outsourcing dis-cussed in the text.

Supply chain design can be defined as managing and structuring the supply chain of an entity so that…

Answered: he question below is from the attached…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

See similar textbooks