Mattel Toy Recalls 2007

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Summary of Case
Mattel’s Toy Recalls and Supply Chain Management

This case talks focuses on the event in the year of 2007 when Mattel – the leading global toymaker – voluntarily recalled its toys from worldwide stores. Mattel’s name is synonymous worldwide for its most famous product – the Barbie Doll. The recall was initially for 83 toys which had excessive lead paint and soon after 6 more products we recalled which had a design problem of small magnets coming off the toys in addition to the use of lead paints. The lead that was used could potentially be toxic for children and the magnetic parts that could come off the toys could potentially be fatal for the digestive systems of children if ingested. All the toys recalled were manufactured in China and in total more than 1.5 million toys were called back. The initial diagnosis was that the main cause of the problem was “Made in China” however the case explores that the root causes for the default were defective designs. Background – Mattel & China

* China had become the leading manufacturer of toys by 2000 * 80 % of toys coming to US were manufactured in China
* 65% of Mattel toys were produced in China
* Most Chinese toys were made in about 5000 factories located in Guangdon province in China. These factories were majorly owned by Hong Kong Mattel’s Supply Chain
Mattel’s product fell into two broad buckets. First was the core products like Barbie dolls which sold through longer periods and the second bucket comprised of the non-core products which comprised of seasonal toys like movie characters. By 2007, more than half of the revenues for Mattel came from core products that were manufactured in Mattel – owned plants in china. The remaining products which were procured from local Chinese licensed vendors. Mattel had an inspection program in place for its products. Off the 5000 products that it used to develop each year, it would randomly check products by taking them off the...
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