Manufacturing and Low-cost Country Strategy

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Many international trade and development experts argue that China is just now discovering the difference between being a major economic player in global business and its previous peripheral role as a low-cost manufacturing site on the periphery of the world economy. What do you think? Mattel’s global sourcing in China, like all other toy manufacturers, was based on both low-cost manufacturing, low-cost labor, and a growing critical mass of factories competitively vying for contract manufacturing business. Do you think the product recalls and product quality problems are separate from or part of pursuing a low-cost country strategy? Many companies in many industries have been using low-cost countries for much of their sourcing for many years, so this process and experience goes back more than four decades in some industries Companies which have relatively more experience in low-cost country sourcing will be the first to acknowledge that a higher level of diligence is required because many of these new business venues – the people, the processes, the institutional frameworks including social expectations and product health and safety laws – are either new or non-existent in many of these countries It is therefore hard to see product recalls and quality issues separate from the low-cost country strategy; these are issues which are part and parcel of this off-shoring or best-shoring business practice

Whether it is lead paint on toys or defective sliding sides on baby cribs, whose responsibility do you think it is to assure safety – the company, like Mattel, or the country, in this case China? The company – its leadership and management – must be the first line of responsibility and accountability for quality and safety for any product or service it provides The customer ultimately expects the company via its brand and product image to assure them that the product is safe, regardless of how and by whom and where it was sourced, manufactured, assembled and...
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