Toy's popularity causes frenzied demand, supply shortages

Every year it seems as though there is a new toy fad that grips the nation during the holiday shopping season. Tickle-me Elmo and Ferby filled the position in past years and now, Squinkies are the toy that every kid wants. Because of their skyrocketing popularity, however, the toy's makers cannot keep up with demand, straining their supply chains as they endeavor to maintain production.

A pack of 16 Squinkies costs only $10 and they are collectible, prompting children to load up on the squishy toy characters as if they were priceless. Laura Phillips, senior vice president for toys and seasonal merchandising at Wal-Mart, affirmed that "demand is tight," causing the supply shortages. The toys are manufactured at a 16-person facility in Minnesota.

While other companies reported shortages, Target successfully adjusted its own supply chain to monitor sales of the toy. Once managers saw that they were selling in high numbers consistently, the company "reacted pretty quickly to meet that ongoing demand," Casey Carl, who manages toys and sporting goods products at Target, asserted. However, because of limited manufacturing capacity, there was a 60-day turnaround between when stores placed orders and when they received shipments, leading to supply shortages and lost revenue. To expedite shipping, some companies are paying for air freight delivery, increasing business costs.

Nichols is doing all he can to fill the myriad orders, enjoying the success while it lasts. He is the first person to admit that kids can have short attention spans.