Chinese-Made Toys at Mattel - Essay Example

(A1) In my opinion, the issue of toy quality and safety was not a significant concern to Mattel because at the moment, in the 1980s, Mattel “video games and other non-toy business interests began generating large revenue losses” (The Chinese-Made Toy Recalls at Mattel Inc.,174); the company was under pressure of bankruptcy, and enforcing strict quality controls was perhaps not as important as creating profits was. Secondly, as the article states, “problem with toys containing small loose magnets was the result of Mattel’sown flawed toy designs, and not due to any lack of adherence to manufacturing requirementsin China” (The Chinese-Made Toy Recalls at Mattel Inc., 177); from this, it is inferred that the toy quality/safety problem could be avoided if Mattel paid more attention to its product design sector to devise toys in a reliable and safe manner. Any toy quality/safety problems could be overcome by making manufacturing changes. The article also mentions that there was “lax regulatory enforcement,” (The Chinese-Made Toy Recalls at Mattel Inc., 179) in the factories that Mattel had set up in China, which often meant that“these laws were routinely ignored” (The Chinese-Made Toy Recalls at Mattel Inc., 179); problems of toy quality and safety could clearly be avoided if there was stricter control and supervision of product quality in these factories. Also, this problem of safety and quality could be eliminated if Mattel had developed its Global Manufacturing Principles before it had started a supply chain trading partnership with China, and ensured that the Chinese industries followed the rules and regulations of the GMP and terminating the partnership in case the Chinese did not follow the rules. (A2) Mattel made a number of positive responses to the toy recalls that largely had the impact of improving its public image and in winning back its good reputation. Firstly, its CEO Robert Eckert appeared in a video, in which he made a public apology for the defected and harmful toys Mattel had produced and also pledged to “change how we work in the future”(The Chinese-Made Toy Recalls at Mattel Inc,176). Mattel representatives in September 2007 even made clear to the American Congressional Committee that the defected toys were a result of Mattel’s “own flawed toy designs”; this then lead to Mattel making changes in its manufacturing process. Apart from this, Mattel also guaranteed to “increase the frequency of its paint inspections, testing every batch delivered” (The Chinese-Made Toy Recalls at Mattel Inc., 176). In 2007, it also put a check on its products that were being shipped out of its Asian factories in order to thoroughly examine them for quality and potential health hazards; this had the effect of preventing “more than two-thirds of the recalled toys from reaching consumers” (The Chinese-Made Toy Recalls at Mattel Inc,177).Lastly, Mattel set up a “Corporate Responsibility division, which had accountability internally and externally for adherence to company safety and compliance procedures” (The Chinese-Made Toy Recalls at Mattel Inc., 177). The effect of all these actions was that it restored the positive image of Mattel in the public eyes. (A3) The article includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers and customers” (The Chinese-Made Toy Recalls at Mattel Inc., 179). Between Mattel and Early Light, there is a supply chain trading partnership that involves the two companies to work with one another when making decisions about manufacturing and distributing products. As the article states, the two companies have enjoyed this kind of collaboration for 15 years, and in my opinion, the two should continue to work together as supply chain trading partners since this entails a number of benefits. Firstly, the long amount of time (15 years) Mattel and Early Light have worked together in collaboration means that a high level of trust must have developed between the two. The article states that “When trust between trading partners exists, collaboration can occur,” and that “Trust and collaboration are seen as the two key requirements for buyer–supplier relationship success” (The Chinese-Made Toy Recalls at Mattel Inc., 181); Mattel should continue using Early Light as its supplier because of the high degree of collaboration and trust that exits between the two. Lastly, Kenichi Ohmae states that in today’s marketplace, with “dangerous opponents, it is best not to go it alone” (The Chinese-Made Toy Recalls at Mattel, 181,181); collaboration is clearly beneficial in the way that it can provide support to its partners. In Mattel’s behavior with other foreign companies, I feel that it would be useful for Mattel to extend supply chain trading partnerships to different companies in different countries too; as the article states, these partners indulge in “sharing of information and the pooling of resources to achieve an objective,” and how this “improves operating efficiencies,” and “creates sustainable competitive advantage for the supply chain participants and better, cheaper products for the final consumers” (The Chinese-Made Toy Recalls at Mattel Inc,179) (A4) In my opinion, there is no need to add anything more to the GMP since it already contains all the principles needed to become a responsible and successful industry. There is a great need for industries to realize that there can be cultural differences between the culture they are from and from that of the country they are setting their factories up in, in order keep up a good public image. The GMP states that any other company that shares a supply chain partnership with Mattel will“protect the environment while respecting the cultural, ethnic and philosophical differences of the countries where Mattel operates (The Chinese-Made Toy Recalls at Mattel Inc., 180).” As the article states, Mattel has been using the services of International Center for Corporate Accountability (ICCA), New York, to carry out audits and examine the events taking place in factories it controls, to see whether or not these factories are following the GMP or not. When Mattel was auditing its industries in China, it requested these industries’ managers to fill out papers on whether or not they were complying with the GNP, and also it carried out “an examination of the plant’s policies, procedures and practices with regard to the environment; employee health and safety issues; inspections of the general maintenance of the manufacturing facilities; storage, treatment and disposal of hazardous waste materials; hygiene issues; and dormitories and recreational facilities” (The Chinese-Made Toy Recalls at Mattel Inc,179). The result of all this auditing was to allow a report to be generated that could be forwarded to Mattel by the ICCA so that Mattel could take “corrective actions.” (A6) Nicholas A. Benvenuto in his paper on “Outsourcing—A Risk Management Perspective” claims that “Three-quarters of U.S. companies outsourced some or all of their information technology activities in 2004,”and he mentions three reasons for developing supply chain collaborations with other companies in other countries: “Cost or internal headcount needs to be reduced, internal capacity is constrained by increasing market demand, and internal manufacturing or service performance is insufficient or does not meet requirements.” Outsourcing or developing collaborations with other industries can help Mattel for example, to cut down on bearing heavy losses all by itself and enable it to access the resources of other industries. However, there is a negative side to outsourcing and looking towards other companies in other countries as potential supply chain trading partners. However, this outsourcing can be disadvantageous too. For instance, there is heavier reliance on suppliers; although this interdependence can be useful in the way that it allows division of labor and specialization to take place, sometimes a company can end up losing its own control over its activities. For example, many toy making industries in China that were working with Mattel were forced to shut down since “they could not afford the types of product testing Western buyers started requiring,” and “Foshan Dayi Toy Co. said their firm was raisingprices by 10 ten percent to cover the increased testing required by their customers, which included Mattel and Wal-Mart” (The Chinese-Made Toy Recalls at Mattel Inc., 182). Clearly, this interdependence that supply chain trading partnerships entails puts industries at disadvantage because it forces their actions to be directly dependent on those of its partner companies. Specifically for Mattel, an instance to illustrate how this interdependence plays out negatively is of how “Hong Li Da, a Chinese subcontractor used by Early Light, was required to use a Mattel-specified low-lead paint; however, it chose instead to use a less costly, higher lead-content paint from an unapproved supplier” (The Chinese-Made Toy Recalls at Mattel Inc,175). We can see here how Mattel had to suffer losses in millions because it had toys with dangerous levels of lead in them because of the paint that some Chinese subcontractors used, without its approval. Another risk is that the companies in distantly located areas may not even be following the rules and regulations that Mattel has lain down. The fact that the dangerously high levels of lead in Mattel toys had to do with “Chinese subcontractors (who) used unapproved paint,” just shows how difficult it can be for one industry to enforce its rules on a partner company that is geographically located very far away from it. Also, when an industry insists on keeping a close eye on the happenings inside its partner companies, there is the increased cost of hiring employees to act as managers and to keep a check on the situation. Work Cited Benvenuto, Nicholas A. "Outsourcing- A Risk Management Perspective." Http://www.isaca.org/. N.p., n.d. Web. 30 Apr. 2013. . Read More