The toy and game manufacturer, Hasbro, has successfully reduced its inventory to historic lows, thanks to an overhaul of its supply chain and improved end-to-end planning capabilities.
Hasbro’s efforts to enhance its end-to-end planning capabilities have resulted in a significant reduction in aged inventory, reaching what the company’s EVP and CFO, Gina Goetter, described as “historic lows.” This was revealed during the company’s Q2 2024 earnings call. The improved planning proficiencies have enabled Hasbro to better determine inventory sourcing based on customer demand. Despite reducing its product backlog, Hasbro plans to maintain suitable inventory levels to support holiday season sales.
Supply Chain Transformation Contributes to Major Wins
Hasbro’s recent supply chain transformation has been credited for its major wins in Q2 2024. The company’s new Chief Supply Chain Officer, Stephanie Beal, who assumed the role in July, has been instrumental in this transformation. The specifics of the end-to-end planning improvements were not detailed, but Goetter mentioned a significant inventory overhaul in the previous year that positively impacted the company’s performance in Q4 2023.
The company has been building new capabilities within planning and forecasting to ensure that both owned and retail inventory levels remain within the desired threshold. This focus on reducing logistics costs and targeting procurement and manufacturing has resulted in significant progress and a healthier inventory position.
Efficient SKUs and Cost Reductions Enhance Profitability
Hasbro has been focusing on efficient SKUs and cost reductions during product design to generate savings and improve the profitability of its toy business. An example of this strategy is the planned release of a lower-cost version of Jenga, based on a fresh design for cost model. This model is being replicated across its production line.
In Q3 2023, Hasbro’s CEO, Chris Cocks, revealed that the revamped supply chain was driving approximately $100 million of the year’s expected savings, with logistics and production costs reduced to mid-single digits. The CEO emphasized that the revamped supply chain was helping the company improve its inventory management.
