mattel s toy recalls and supply cycle management

This case talks is targeted on the event back in of 2007 when Mattel – the primary global toymaker – voluntarily recalled their toys from worldwide retailers. Mattel’s identity is synonymous worldwide due to the most famous product – the Barbie Doll. The remember was initially for 83 toys and games which got excessive lead paint and soon after 6 more items we remembered which a new design problem of tiny magnets approaching off the playthings in addition to the usage of lead chemicals. The lead that was used could potentially be toxic for the children and the magnet parts that can come off the toys may potentially be fatal for the digestive systems of children if ingested.

All the toys recalled were produce in China and in total much more than 1 . 5 million toys were known as back. The original diagnosis was that the main source of the problem was “Made in China” though the case is exploring that the basic causes to get the arrears were substandard designs.

History – Mattel & Chinese suppliers

* Chinese suppliers had become the leading manufacturer of toys by simply 2000 * 80 % of toys and games coming to US were produce in China

* 65% of Mattel toys had been produced in China and tiawan

* Most Chinese toys were created in regarding 5000 factories located in Guangdon province in China.

These factories were majorly owned by simply Hong Kong

Mattel’s Supply Chain

Mattel’s merchandise fell in two wide buckets. 1st was the core products just like Barbie plaything which offered through longer periods plus the second container comprised of the non-core products which made up of seasonal toys like motion picture characters. By simply 2007, over fifty percent of the earnings for Mattel came from key products which were manufactured in Mattel – held plants in china. The remaining products that were procured via local Chinese licensed vendors. Mattel recently had an inspection put in place due to its products. Off the 5000 items that it utilized to develop each year, it would arbitrarily check products by taking these people off the development line.

In order to supply fresh paint to Mattel’s supply string a supplier had to be an avowed one. The complication with this arrangement was that upon many events Mattel’s immediate vendors developed down to different suppliers whom in turn contracted to various other suppliers and therefore the origin of certain goods were difficult to trace – for example the business lead paint. Despite the fact that Mattel hadn’t allowed their vendors to sub agreement to additional vendors without its permission, it was not sure how very well Mattel’s suppliers were adhering to this. Actually, 200 of Mattel top quality and seller assurance staff were located far away from your production establishments in Hk. As a great HR practice Mattel experienced hired a professor with international reputation for being a critic of worker treatment to report independently of any malpractices in Mattel. Reasons resulting in the event

2. Pressures on Chinese doll manufactures.

The majority of toy revenue were coming from big box retailers like Walmart, Target and so forth The business model of these big retailers revolves around extreme expense pressures. This kind of led to a whole lot of bargaining with China manufacturers to cut down their very own costs. At the similar period, the Yuan had appreciated and raising costs of raw materials (such as gasoline costs) left little place for China manufactures to invest in significantly intensifying quality applications.

* Production Problems

Business lead in fresh paint was a usually occurring issue for doll manufacturers. Despite the fact that Chinese manufacturers had place processes in position that had checks to prevent having lead in the paints, it was significantly difficult to keep an eye on the quality of paints

* Design and style Problems

In 2007 various toy products had little magnetic parts attached to all of them which could potentially get detached from the playthings and then they could possibly be accidently be ingested by children. These kinds of magnets, once inside the gastrointestinal tract were dangerous and could potentially stick together and harm the intestinal tract. Another design problem is that some of the playthings were susceptible to being cracked. Most of the models were made outside China and thus this was not a manufacturing issue.

* Product Misuse

A few recalls of Mattel’s goods were because of the potential misuse by kids. There were choking or strangling hazards connected with some of the items that produced the products hazardous.

Mattel’s Response

The predicted impact of Mattel’s recalls was to the tune of $30 , 000, 000 dollars that has been about half from the operating salary of that quarter. The media coverage and global focus aggravated the matter. In order to deal with this Mattel’s response was as follows.

2. Three stage check program

As the first level check – for the lead fresh paint every group of fresh paint could be acquired by certified sellers. Second, the controls for vendors and contractors were made more stricter and arbitrary checks had been constituted. Third, the completed products would be subjected to final checks on the verge of the customers

* Sub contracting policies

Mattel reviewed is actually subcontracting plans to control excessive subcontracting

5. Purchase of new equipment to detect lead

Mattel included a plan to buy more business lead detectors

* PR & Communications

The company followed a proactive interaction strategy to talk about the issue.

Bottom line

The buyers reacted firmly to Mattel’s response. The case elaborates how systemic failures can almost cripple a global innovator. Most importantly, the ‘made in china’ brand lost significant reputation because of this episode. Nevertheless , better measures and corporate settings resulted from this event and so they eventually transformed the production world for the best.

one particular