Mattel Recall Case Study
Corporate Accountability, an independent body, which the results of are made public. Matter gives to charity through the Matter children’s foundation, and has received many other accolades indicating its position as a socially responsible corporation. Despite Mantel’s position as a top 100 corporate citizen in 2006, a year later Matter had to issue massive recalls for children’s toys containing lead paint in addition to some recalls made in 2006 for lose magnets in toys that could be a swallowing hazard.
The recalls were a result of Mantel’s operations strategy to manufacture its sys in China (Backup 5). In Mantel’s complex supply chain management failed to effectively monitor and ensure quality in each step of the supply chain especially at the lower level with its vendors.
The 2007 recalls were a result of lead paint used in children’s toys and toys with magnetic parts that if swallowed could cause medical issues. In 2007, Matter had to recall over 21 million toys due to lead pain and poorly designed magnets.
Though this is only a portion of the 800 million toys Matter produced in 2007, these recalls highlight existing supply chain issue and create new ones as Matter must create a structure to collect the faulty toys, increase dependence on other suppliers to restock products, and provide increased customer service throughout the recall. In the specific case of the 2007 recall due to lead paint, the lower ranks of the supply chain was left unmonitored. Matter sourced some of its toys by Lee Deer Industrial Company in China.
Lee Deer purchases its paint from Donning New Energy Company.
When Donning ran out of yellow pigment, it purchased the pigment from Dingdong Zoning Toner Powder Factory which was later found to be fake, untraceable vendor. Matter attempted to avoid issues such as these by composing its contracts with ‘endorse to require the vendors to purchase from a list of eight certified vendors in China or test for compliance each batch of paint purchased by a non-certified ‘ender. Matter conducts audits of certified paint suppliers and vendors to ensure quality, however the frequency of audits depends on Mantel’s prior relationship with the supplier or vendor.
This laxity in monitoring suppliers and vendors lead to the opportunity for substandard products to be made. Overall, offspring is used to take advantage of economies of scale and reducing infrastructure and labor costs, but there are many challenges to managing quality Nile offspring.
Organizational issues with offspring include loss of control of projects and processes, the need for increased management attention to detail, security risks, concerns over proprietary info and legal issues.
In 1959, the ever popular toys, Barbie and Ken dolls, were released and soon after the Hot Wheels line began. Since going public in 1960, the brand has expanded and Matter has even acquired Fisher-price, Karakas, Taco, Pleasant Company, Blue 33rd Toys, and the Learning Company. Most of these acquisitions greatly increased he profitability of Matter loving that accessions is one of Mantel’s strengths (Backup A second strength of Matter is its ability to market cost-effectively.
The toy industry is seasonal with sales focused around the holiday season in the year.
Also, there is a lot of uncertainty involved with new product introduction since market research with Children’s products is inconclusive. Matter innovated marketing within the toy industry by partnering with BBC Television to sponsor a 15-minute segment of Walt Disney‘s Mackey Mouse Club for a year which established Matter in the minds of nonusers. Matter engaged in more partnerships with Disney, Warner Brothers, vocalic and more to create toys outs of popular characters.
Matter has also licensed it core brands to non-toy companies to make Barbie eyesore with ERM aware and Hot Kneels apparel with Innovative Group (Backup 6).
MANTEL’S QUALITY PROBLEM AND ORGANIZATIONAL ISSUES Mantel’s quality problem stems from outsourcing large amounts of the manufacturing toys while tossing on advertising, product design, research and development and other high value activities in the U. S. In house. Matter utilizes both of offspring wrought outsourcing production in China and also owning factories in China.
Matter owns five factories in China, but outsource 50% of production to Chinese third-party manufactures.
This accounts for about 65% of Mantel’s toys meaning majority of Mantel’s toys are at risk to the challenges of offspring coupled with the challenges of outsourcing (www. Pacesetting. Com/images/uploads/Matter_Cassettes. PDF). Though Matter has designed a strict multi-step process to monitor the manufacture of non-core brands and audits to measure the quality of core brand products, the laity is that not every product is monitored, and not every manufacturer and their supplier and vendors are monitored.
With the amount of offspring and outsourcing Matter utilizes their supply chain needs to be extremely trusted or micro-managed for quality down to the raw materials used especially with Matter being a leader in the toy industry for ethics.
In China alone, Matter had contracts with approximately 37 principle vendors who then used smaller companies for the full or partial production of toys. The Matter supply chain is long and complex with about 3,000 Chinese companies involved in making Matter products.
Matter only maintain contact with the principle vendors leaving the smaller companies to be managed only by the principle vendors (Backup RECALL STRATEGY Matter should voluntarily recall any products which contain over the . 06% threshold the Consumer Product Safety Commission (CAPS) has set (Backup 3). This would require batch testing for all toys, not Just toys made in China as there will be a need to reassure the public that all toys are safe.
Also all products which contained magnets locked into the Poly Pocket play sets will need to be recalled. Recall Timeline : In the year 2007) from www. Hypoglycemia. Mom/images/uploads/Matter_Cassettes. PDF) From the timeline above, it is clear that Matter did not report the lead contamination n paint to the CAPS within the legal timeshare.
Also it should be noted that from the time of the first notice of lead paint in toys on June 8, 2007 to stores being notified to take the faulty products off the shelves on August 2, 2007 was about two months Inch is far to long given the amount of consumption that can occur in two months, especially in the summer when children are out of school and may be playing with toys more (Backup 8).
Mantel’s recall strategy was to work with the CAPS to launch a Madders recall within the media and stores. The CEO of Matter issued an apology in a video posted on the website and compensation was given to all who had purchased the faulty products. However, it could be argued the the compensation in the form of equivalent compensation to the product purchased was not enough. Another bad aspect to the recall was that Matter placed a lot to blame to the Chinese government and Chinese manufacturers trying to displace responsibility .
Also a new corporate responsibility organization (an organization of 500 employees to monitor domestic and international vendor and manufacturer adherence to Mantel’s toy feet standards) was created and a new three-point safety check system was Initiated (Solomon). Matter also enacted 15 “Fast Track” Tactics to unite during the recall. Mantel’s “Fast Track” Recall Tactics 1 . Staffed its call center, created a CAPS-approved script 2. Created a recall portion of its website 3.
Sent notifications and posters to retailers 4.
Gave retailers advance notice of recall so they could remove products from shelves even before logistics of recall had been finalized 5. Sent news releases to media 5. Started a toll-free, multi-lingual interactive voice response phone line to assist allures to determine if their product is an affected one 7. Launched a web-based recall identification tool on its website in more than 20 languages. 8. CEO video posted on website 3.