Mattel’s Toy Recalls and Supply Chain Management Essay

This theatrical role talks focuses on the event in the year of 2007 when Mattel the flowing global gipmaker voluntarily recalled its miniatures from worldwide stores. Mattels name is synonymous worldwide for its most famous product the Barbie Doll. The recall was initially for 83 toys which had excessive lead paint and soon after 6 more products we recalled which had a design problem of small magnets coming off the toys in addition to the use of lead paints. The lead that was used could potentially be toxic for children and the magnetic parts that could come off the toys could potentially be fatal for the digestive systems of children if ingested. All the toys recalled were manufactured in China and in intact more than 1.5 million toys were called back. The initial diagnosis was that the main cause of the problem was Made in China however the case explores that the root causes for the default were unfit designs.Background Mattel & China* China had become the leading manufac turer of toys by 2000 * 80 % of toys coming to US were manufactured in China* 65% of Mattel toys were produced in China* Most Chinese toys were do in about 5000 factories fit(p) in Guangdon province in China. These factories were majorly owned by Hong KongMattels Supply filamentMattels product fell into two broad buckets. First was the core products analogous Barbie dolls which sold through longer periods and the second bucket comprised of the non-core products which comprised of seasonal toys like movie characters. By 2007, more than half of the revenues for Mattel came from core products that were manufactured in Mattel owned course of studyts in china. The remaining products which were procured from local Chinese licensed vendors. Mattel had an inspection course in place for its products. Off the 5000 products that it used to develop each year, it would randomly check products by taking them off the production line.In order to hang on paint to Mattels supply chain a vendo r had to be a certified one. The complication with this arrangement was that on many occasions Mattels direct vendors contracted down to other suppliers who in turn contracted to other suppliers and thus the origin of certain products were difficult to trace for example the lead paint. Even though Mattel had not allowed its vendors to sub contract to other vendors without its permission, it was not sure how well Mattels suppliers were adhering to this. Ironically, 200 of Mattel quality and vendor assurance employees were located far away from the production facilities in Hong Kong. As a good HR practice Mattel had hired a professor with international reputation for cosmos a critic of worker treatment to report independently of any malpractices in Mattel. Reasons leading to the event* Pressures on Chinese toy manufactures.Most toy sales were coming from big box stores like Walmart, Target etc. The business model of these big retailers revolves around extreme cost pressures. This le d to a lot of bargaining with Chinese manufacturers to cut down their costs. At the similar time, the Yuan had appreciated and increasing costs of raw materials (such as fuel costs) odd little room for Chinese manufactures to invest in significantly progressive quality programs.* Manufacturing ProblemsLead in paint was a frequently occurring problem for toy manufacturers. Even though Chinese manufacturers had put processes in place that had checks to avoid having lead in the paints, it was increasingly difficult to monitor the quality of paints* Design ProblemsIn 2007 many toy products had small magnetic parts attached to them which could potentially get detached from the toys and then they could be accidently be ingested by the children. These magnets, once interior the digestive system were toxic and could potentially stick together and harm the intestines. Another design problem was that some of the toys were susceptible to being broken. Most of the designs were made outside Ch ina and thus this was not a manufacturing problem.* Product MisuseSome recalls of Mattels products were because of the potential misuse by children. There were choking or strangling hazards associated with some of the products that made the products dangerous.Mattels ResponseThe expected impact of Mattels recalls was to the tune of $30 million dollars which was about half of the operating income of that quarter. The media insurance coverage and global attention aggravated the issue. In order to deal with this Mattels response was as follows.* Three point check systemAs the beginning(a) point check for the lead paint every batch of paint could only be acquired from certified vendors. Second, the controls for vendors and contractors were made more stricter and random checks were constituted. Thirdly, the finished products would be subjected to final checks before they reach the customers* Sub contracting policiesMattel reviewed its subcontracting policies to control excessive subco ntracting* Purchase of new equipment to detect leadMattel incorporated a plan to purchase more lead detectors* PR & CommunicationsThe company followed a proactive communication strategy to address the issue.ConclusionThe consumers reacted strongly to Mattels response. The case elaborates how systemic failures can almost cripple a global leader. Most importantly, the made in china brand lost significant reputation because of this episode. However, bump measures and corporate controls resulted from this event and they eventually transformed the manufacturing world for the better.