Case Detail

Case Summary

Supply Chain Outsourcing at DB Toys

Case Number: 5-404-767, Year Published: 2006

HBS Number: KEL256

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Authors: Mark Jeffery; Lisa Jackson; Derek Yung; David Bibbs; Michael Dowhan; Daniel Grace; Woody Maynard; Steven Johnson

Key Concepts

Outsourcing, Supply Chain Management, Pricing Models, Return on Investment (ROI)

Abstract

The case is based upon a real supply chain outsourcing management decision at a major manufacturing company. The company has been disguised for confidentiality reasons. The case discusses different types of outsourcing, supply chain management, the benefits and risks of outsourcing, and various pricing models for outsourcing contracts. Students must make a management decision and answer the following questions:

  • Is supply chain outsourcing a viable option for DB Toys?
  • What will be the return on investment?
  • What is the best outsourcing model?
  • What is the best pricing model?
  • Learning Objectives

    Students learn the different types of outsourcing, supply chain management, the benefits and risks of outsourcing, and various pricing models for outsourcing contracts. Students also learn how to calculate the return on investment of supply chain outsourcing. Most important, the case enables students to understand the strategic context of outsourcing, and which outsourcing model and pricing is appropriate.

    Number of Pages: 24

    Extended Case Information

    Teaching Areas: Finance, Management, Operations, Strategy, Technology

    Teaching Note Available: Yes

    Geographic: Global U.S. Company

    Industry: Manufacturing

    Organization Name: DB Toys (disguised)

    Organization Department: Operations/Supply Chain/IT

    Organization Size: Medium

    Decision Maker Position: CEO

    Decision Maker Gender: Female

    Year of Case: 2002