From:Rodney Wright, Elementary Division Manager
Re:Product Test Failure due to presence of lead
A large shipment of our elementary toy collection is scheduled to be released and shipped at the end of the week. One of our products in this shipment has failed quality control testing for exceeding the legal limits of lead set by the federal government. This shipment is scheduled to be delivered to South African Schools. Federal regulation guidelines dictate that our toys not contain lead with more than 100 parts per million. (Gabler, 2011) The levels tested at 103 parts per million which is slightly higher than federal regulatory guidelines. The invoices affected by this failed test are 11256KJI220 – 11256KJI269, and are projected to cost $100,000 to replace the toy (whistle) and conform to federal guidelines. It is projected to take approximately 3 weeks to complete, affecting on-time distribution requirements to our customers.
Lead is a hazardous mineral that, if it exceeds federal guidelines, causes health conditions ranging from neurological damage, attention and learning, deficiencies, hearing loss, physical and mental development. Lead gathers in the body, and when exposed, the levels of lead increase at a fast pace resulting in accelerated negative medical issues. (Agency, 2012)
Since we are dealing with children, we need to understand that they are at a higher risk than adults. Remember the saying “curiosity killed the cat?” (Martin, 2012) Cats are curious animals that like to investigate, but their curiosity can take them to places where they might get hurt. Children, like cats, are curious and like to products in their own dangerous ways. Children tend to be curious by touching items, putting them in their mouth, and sharing them with friends and family. This causes the levels of lead to rise along with the risk of lead poisoning. (Agency, 2012)
The other part of the saying is "but, satisfaction brought it back,” (Martin, 2012) in this case it referes to our customers. The cost of $100,000 to replicate the whistle to within acceptable lead levels is a small price to pay for the satisfaction and retention of our customers both domestic and international. This also minimizes our costly legal responsibility consequences.
In order to ensure we have covered all our options for fix, we must identify those parties involved…our stakeholders. We have already identified the children and the health hazards, now lets talk about the parents, the dealers, and our internal steakholders who hold an interest and investment in the company.
•Parents – trust our company to provide safe products
•Dealers – sale our products knowing they are safe and quality built •Employees – depend on the sale of the products for their paychecks •Stakeholders – have a strong interest in the day to day business decisions as it affects employees, profits, and customer retention.
Options to Consider
a.Financial – Penalties and fines, legal fees, court costs, litigation, reproduction, and revenue b.Vendor Relations – loss of customer, strained relations with production and logistics c.Reputation – simple…start from scratch, loss of business d.Employment – layoffs, employee retention, ethically and morally affected 2.Time
a.Length – time to remanufacture product, build relations and reputation b.Reasonable – time to ship products
a.Obligations – to our customers, employees, vendors, manufacturers, stakeholders, and the children b.Due diligence – to do what is right, weigh all options and decide on taking the right risks not to jeopardize our moral and ethical position within the company and within ourselves.
As the above options run our business brings us closer to possible lawsuits and fines if we are defective. Keeping the above in mind, I have 3 separate elections in mind that must be...