Mattel Toy Recall

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Case Memo:Mattel And The The Toy Recalls

Summary: Mattel, a global leader in toy manufacturing is currently faced with a tough challenge of restoring their consumer confidence following the increased recalls of their toys made in China. At present the most important goal for Mattel is to reassure their customers that kids' safety is their highest priority and they are committed to provide good quality toys that are safe to play with. The main impediment in achieving their goal is not having an integrated supply chain. In order to achieve their goal, Mattel needs to restructure their supply chain and establish a direct relationship with vendors who manufacture the raw materials for their toys and set safety guidelines.

Problem Analysis: Manufacturing safe and good quality toys is crucial for regaining consumer confidence. As a short term solution Mattel recalled the toys that were hazardous to kids. They also gave refund and issued store coupons to provide customer satisfaction. However, this doesn't solve the problem in the long run. If recalls keep happening in the future, customers will lose faith in the company. Mattel needs to make sure that such recalls will not happen in the future. The only way to do that is by fixing the root cause of recalls, which is restructuring the supply chain management. As mentioned in the article, the main problem stems from the fact that Mattel had very “long and complex supply chain” with over 37 principal vendors, who in turn used hundreds of smaller vendors to manufacture the toys. But Mattel had direct contact with only their principal vendors. With this kind of disintegrated supply chain, it is hard to exercise quality control. Especially in a country like China where all the manufacturing jobs have been outsourced by so many companies because of cheap labor, workforce is under tremendous pressure that can results in compromising on product safety. So, it is very important for Mattel to have a well integrated and...
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