The Project: Using the Web for designers and licensees in far-flung locales to collaborate on toy design.

The Payoff: Over the past two years, Mattel has cut the time it takes to develop new products by 20%.

Paper and clay. When Joe Eckroth took over as Mattel Inc. (MAT )'s chief information officer three years ago, he found designers at the company's El Segundo (Calif.) operations snipping and molding prototypes of Barbie dolls and Hot Wheels cars the old-fashioned way. Eckroth promptly moved design online so that virtual models could be zipped electronically to the company's nine factories. That cut development time by 20%.

Eckroth unearthed other efficiencies by putting Mattel's licensing program online. This business represents $2 billion in retail sales for Mattel's licensees. Instead of shipping all those Barbie backpacks and logoed lunchboxes back and forth between Mattel and licensees, the company early this year digitized and automated the approval process. Now approvals take five weeks instead of 14. By 2004, Mattel expects all licensees to do business through the Web, up from 25% now, which should enable an increase in licensing agreements of around 10%. Forget Gepetto's workshop. The keyboard rules now.

By Heather Green

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