Case Study - How Chinese Toymakers Respond to Recalls

An elementary toy that is due to be shipped at the end of the week has failed quality control testing. A metal whistle has been shown to exceed the federal regulation guidelines for lead. The testing process showed the lead level for this particular toy tested at 103 parts per million. The federal guidelines dictate that toys cannot contain lead with more than 100 parts per million (OSHA, 2013). The projected cost to conform to federal guidelines and replace the whistle are

In 2007 a voluntary recall of 4.5 million toys worldwide because they contained high levels of toxic lead paint. The recalls were the result of protocol

The biggest environment force affected Mattel recently has been legal and regulatory with the high levels of lead paint found in their die-cast toys in 2007. This issue created a voluntary recall from Mattel for over 2 million toys and created doubt in customers to the quality of their Mattel toys. Mattel responded by immediately implementing a check system to accept paint only from certified suppliers, tightened controls throughout the production process and testing every production run to ensure compliance. Mattel said that it is working in cooperation with the U.S. Consumer Product Safety Commission and other regulatory agencies worldwide. Mattel is also working with retailers worldwide to identify and remove affected products from retail shelves.

Mattel is starting to take a step in the right direction, according to Renae Merle from The Washington Post, “Mattel said it was strengthening its process for preventing the use of lead based paint, it will only permit paint from certified suppliers and require every batch to be tested, company officials said” (Merle 1). 80% of toys in the United States are imported from China, according to Renae Merle, and 65% of those toys are created by Mattel. Although that is a step in the right direction, that still leaves 15% of the toys in the United States at a higher risk of having high traces of lead on them, going undetected. Stores like Toys ‘R’ Us that sell toys sold by companies other than Mattel, should be required to post the percentage of how much lead is in each toy directly next to or near the toy so that parents can be aware of this problem. If parents are not made aware of this problem, it is going to cause more concerns health wise. Michelle Albert, a stay at home mom of two children states that “I feel our country should be more careful about the things we import” (Albert 1). She fears that her children may have been exposed to these toys and has no way of knowing until it may be too late.

We have a large shipment of our elementary toy collection scheduled ship at the end of this week but have encountered a problem with the production. One of the products in this collection has failed the quality control testing exceeding the legal limits of lead set by the federal government. This shipment will be delivered to South American schools. As of August 14, 2011 the total legal lead content must not exceed 100 parts per million for a product (CPSC 2013). Our levels tested above these limits and require us to take action. To reproduce this product it will cost the company

This lead poisoning problem finally received the attention it deserved in 1971 when the Lead-Based Paint Poisoning Prevention Act was put into effect. This act provided Federal assistance to help communities carry out screening and treatment programs (Chisholm, 1982).

“Lead was used in many consumer products until it was phased out in the early 1980’s. Lead can be found in the soil, soot, tap water, herbal medicines from other countries and lead- based paint” (CDC, 2010. Paint in homes built before 1980 became a hazard when it peels and chips. The route of exposure is through inhalation and oral ingestion. Babies are more vulnerable because of their size, make up and behavior” (Davis, 2007). These babies are not responsible for their actions which makes the care givers not only responsible for their own safety but that of their children. “Statistics have shown that although people can be exposed to lead in the USA, most of the infants diagnosed with lead are from foreign born parents. In 2009, 47% of the pregnant women identified with blood lead levels (BLL) > 15ug/ dl, were born in Mexico” (Farley, 2010). “When mothers are exposed to lead, it passes through the placenta and affects the fetus. The current CDC target blood lead level for children under six years of age is 10ug/dl” (CDC, 2010). Even to small levels of BLL can cause health and developmental issues. Along with

Lead poison can be harmful to everyone, especially children. According to Levin et al., (2008) the U.S was the third largest producing 450,000 tons in 2003. Thus, lead is an attrition that is sturdy and pliable and it has been in used for the last 3500 BCE. In addition, children in the U.S. blood lead levels increase abruptly amid 1900 and 1975 due to the rise of lead emissions, which caused an extensive contamination. Although, the federal laws eradicated leaded gasoline, banned the sales of leaded-paint, prevented lead weld in public water methods, plumbing units, and cans from drinks and food, children are still being expose to lead (Mahaffey et al .,1982; Pirkle et al., (1998 as cited in Levin et al., (2008). Hence, according to Levin

Additional risks can be in the production itself. Toys are in a very regulated industry and any defects in production that are not within the regulatory standards can be either recalled if they are already being sold to consumers or cause the entire production run to be discarded or destroyed. Both instances are very costly but taking the initiative to create a safe work environment that is compliant with all regulations can mitigate that risk.

The magnetized toys were also made in China, but they followed the Mattel design specification. Recalling

In the contents of this case there are several management and safety issues and areas for improvement. One issue is Mattel, Inc.’s

As we can see Mattel does a pretty good job of of managing risk within its own business. However, it is some of these large multi national companies that often overlook managing corporate integrity risk in there supply networks. Companies have inserted clauses into their standard contracts with suppliers requiring them to comply with the rules and regulations applicable and materials used must exactly that which has been stated in the contract.

All the quality experts say that there are processes in which inspection will be needed. All the quality experts agree cost and competition does not compete with each other. Deming Juran and Crosby support the practice of involving the suppliers in the quality effort.

Clearly  Mattel  did  not  have  sufficiently  tight  quality  control   procedures  in  its  supply  chain  to  compensate  for  the  extra   risks  of  outsourcing  to  relatively  new  Chinese   subcontractors.  Clearly  there  were  design  flaws  in  the  toys   with  the  magnets  that  could  come  loose.   But  Mattel  deserves  praise  for  now  stepping  up  to  its   responsibilities  as  the  leading  brand  in  the  toy  industry.   -­‐What  has  Mattel  done!  :

To please the public the industry also said they would conduct research about the effects of lead, but the research was funded by the lead industry so they skewed the presentation of the results to the public. Soon there were also cases reported of lead poisoning in children from their habit of biting lead-painted toys. This time the lead industry tried to distract the public by increasing their advertisements highlighting the benefits of lead using the mascot of the Dutch Boy Painter and slogans, such as “ethyl is to gasoline what vitamins are to food.” However, by the 1970’s with the introduction of safer elements and the decrease in public support, the lead industry lost its importance in the world.