Mattel’s China Experience: A Crisis in Toyland Essay

In 2007, Mattel a California based nobble smart set shockingly recalled 19 million toys that had been manufactured in China. Mattel was founded in 1944, and has produced iconic toys such as Barbie and Hot Wheels. The alliance had a long established trust with their consumers that had been forged from decades of reliability. However, when the play along recalled 19 million toys due to health and safety violations, consumer confusion and outrage soargond. The public wanted to sock how such an established companys safety regulations could fail, how Mattel was addressing the issue, and whether consumers could trust Mattel to produce reliable toys in the future.Mattel had been a long time pull up stakeser in the toy industry. Mattel and its main competitor Hasbro held control of over a third of the toy market, pull down in an industry with over 900 manufactures. However, there had been shifting tr send aways in the toy industry. New electronics and video games were becoming progr essively popular among older children. Since Mattel manufactured classic toys such as dolls, the shifting trend forced the company to focus on marketing towards young children under the age of 12. While this segment responds well to Mattels products, they also are the most at risk of endangering themselves. The younger the children, the more give carely they are to throw away toys in their mouth. This behavior puts children at risk of choking or ingesting harmful chemicals.Even with new adversities in the toy industry, Mattel remained a global go bader. As seen in Exhibit A, a SWOT analysis of the company, Mattel had many different strengths that kept it a favorite among consumers. Some of its most signifi do-nothingt strengths included its reputable sucker name among consumers and its successful marketing of toys through childrens entertainment. Even with changing toy preferences, Mattel was growing internationally. In Exhibit B you flock see Mattels global sales. While Asia o nly made up a quarter of Mattels sales, they were forecasted to grow 25% annually. Sales in Asia could help combat Mattels plateauing market in the United States. The company seemed like it was in a strong position.As forwardshand(predicate) as the 1970s Mattel was manufacturing products in China in order totake advantage of lower cost and enable corporate resources to focus on establishing the brand. By 2007, nearly 65% of Mattel products were produced in China. Mattel used a combination of company-run plants and a network of contract manufacturers. Exhibit C displays a simplified example of Mattels supply chain after moving production to China. Global production obviously had major benefits for Mattel, the area factors of China gave it a comparative cost advantage over producing in the U.S., and outsourcing enabled Mattel to remain profitable in an increasingly competitive toy industry. However, outsourcing does comport disadvantages, a global supply chain increases the challe nges to regulate and perform quality. While Mattel had been a leader in safety standard and regulation, even collaborating with the American Society for examination and Materials (ASTM) as well as establishing Global Manufacturing Principals (GMPs) the regulatory standards in place were not thorough enough.In 2007, quality issues surfaced within Mattel as various products were found to contain levels way beyond U.S. federal toy safety regulations. During the year, other issues surfaced with Mattel products surrounding the safety hazard of magnetic pieces used in their toys. By the end of 2007 Mattel recalled over 19 million toys. The recall of such large quantities of product left consumers shocked and demanding to know how Mattel could be so unreliable. The reason for the safety hazards in Mattels products was do to their lack of direct attention of contract manufactures in China. Mattel wanted to cut manufacturing costs and decrease lead time, which resulted in increasing haul by their undertake manufactures to find inexpensive materials quickly. Under the same cost-saving initiatives, Mattel was increasing the amount of goods at distribution centers making it more difficult to preform thorough quality view ass.Had Mattel ensured their contracted manufactures were sourcing from neat suppliers, and preformed quality checks before products went to retailers, the recall most likely could have been avoided. Instead, Mattel set guidelines, and hoped on little more than good opinion that they GMPs were followed. Hasbro, Mattels main competitor has a similar supply chain in place, but avoided the lead paint crisis due to their commitment to inspection. Hasbro set standards for lead paint that were higher than U.S. regulatory standards, and took proper measures to ingest sure their foreign contractors were also following the same standard. Hasbroplaced their own quality assurance inspectors on factory floors, and inspects each product again before it went t o retailers. Hasbros extra commitment to quality helps the company deliver a safe and reliable product to customers.Due to the lack of quality management Mattel proclaimed a voluntary recall of some products. While they did report the safety hazard, they reportedly took months to gather culture and investigate the problem before publically announcing it. However, under regulatory rules, even potentially hazardous products are supposed to be reported within 24 hours. Mattel did explain to the customers that the lead paint was due to braggy behavior by their contracted manufactures in China, easing many parents minds that Mattel would correct the issue. Then, Mattel actually apologized to regulatory officials in China, taking the blame for the quality management issue, especially since the dangerous magnetic toy component was Mattels design. This action left many customers wondering who was at fault and if they could trust Mattel again.While Mattels contracted manufactures should h ave been following the GMPs regulations set by the company, it is ultimately the righteousness of the company to ensure their employees are preforming to the proper standard. Parents just want to be sure that their young children will be safe playing with Mattel toys, even if the child puts the toy in its mouth. Establishing quality checks similar to Hasbro will enable Mattel to deliver a go against regulated, and ultimately safer product to their customers. Exhibit D shows how where Mattel should place quality checks in their supply chain. Quality check one will ensure that the materials being sourced meet U.S. regulatory standards, even abroad. These types of checks could have helped Mattel avoid the lead paint recall. Quality check 2 ensures the overall standard of the product this type of check could have helped the company avoid the flawed magnetic design recall.Having a global supply chain gives companies like Mattel many comparative advantages, such as lower production cost s, but also comes with more responsibility to ensure product quality regulations. When Mattel failed totake the proper precautions to thoroughly inspect their products they put young children at risk of exposure to hazardous materials. While this significantly damaged Mattels public reputation, the company can still take measures to improve its process. By implementing more quality inspections throughout their supply chain Mattel can avoid future scandals like the 2007 recalls, and gain back the trust of their customers.ExhibitsExhibit AMattel SWOT depth psychologyExhibit BExhibit CMattels Supply ChainExhibit DMattels Improved Supply ChainWork CitedVollmer, Sabine. How to Become One of the Worlds Most ethical Companies. How to Become One of the Worlds Most Ethical Companies. CGMA Magazine, 27 Mar. 2014. Web. 03 Apr. 2014. Toy Safety. Safe Kids worldwide RSS. Safe Kids Worldwide, n.d. Web. 03 Apr. 2014. Hill, Charles W. L. Global Business Today. Boston, MA McGraw-Hill/Irwin, 2006. Print. Teagarden, Mary. Mattels China Experience A Crisis in Toyland. Mattels China Experience A Crisis in Toyland (2007) n. pag. Print.