#07 - Teaching Case Study
Hazardous Toy Recalls at Mattel, Inc.
Key words: Chinese manufacturing, outsourcing, product recalls, global supply chain risk
Type of submission: teaching case study
Hazardous Toy Recalls at Mattel, Inc.[?]
In 2006 and 2007 Mattel, Inc. was faced with massive recalls of Chinese-made toys due to potentially dangerous levels of lead in various toy model surface paints and small magnets in toys which could fall off and be swallowed. This case describes the events leading up to the recalls, the response by Mattel, the legal, health, reputation and financial implications of the recalls, and the impacts of the recalls on Mattel’s global supply chain. Readers are asked to assess the situation and to decide what should have been done differently, if anything. The case is appropriate for undergraduate and graduate business students analyzing various purchasing, risk, and supply chain design issues.
The 2006/2007 Mattel Toy Recalls
In some respects, the period from March 2006 to October 2007 was a very troublesome time for Mattel and their Chinese toy suppliers. On a number of occasions during this period, Mattel recalled a total of about 14 million Chinese-made toys in the U.S. and Canada for the same two serious problems. Millions more were recalled in other foreign markets. These two problems were indeed significant; not only for Mattel, but for their distributors, retailers, Chinese suppliers and finally the families around the world buying their toys. Over 2 million of the recalled toys had either been sprayed with lead-tainted paint or contained potentially hazardous levels of lead within the materials, while the remaining toys contained small magnets which could come off and be swallowed. Table I summarizes these recalls.
Mattel’s Chinese-Made Toy Recalls in the US and Canada, 2006 –
|Date |Toy and Problem Description |No. Units Recalled | |03/30/2006 |American Girl jewelry containing high levels of lead | 180,000 | |11/21/2006 |Polly Pocket toys with small loose magnets | 2,400,000 | |08/02/2007 |Various Fisher Price toys with lead in surface paint | 1,000,000 | |08/14/2007 |Batman, One Piece, Barbie, Tanner, Doggie Day Care, and Polly Pocket toy | 9,350,000 | | |sets with small loose magnets | | |08/14/2007 |Sarge toy cars with lead in surface paint | 250,000 | |09/04/2007 |Geo Trax, Barbie, and Fisher-Price Bongo Band toys with lead in surface | 750,000 | | |paint | | |10/25/2007 |Fisher Price Go Diego Go toy with lead in surface paint | 40,000 | | Total | 13,970,000 |
*Source – U.S. Consumer Product Safety Commission, www.cpsc.gov
On March 30, 2006 approximately 180,000 of Mattel’s American Girl jewelry pieces in the U.S. were recalled because the Chinese-made jewelry contained high levels of lead. On November 21, 2006, following 170 reports of loose magnets on Polly PocketTM play sets, Mattel recalled over 2.4 million Polly Pocket play sets in the U.S. and Canada and another 2 million worldwide. In at least three of the cases, children who had swallowed magnets suffered serious intestinal perforations requiring surgery and hospitalization. Then nine months later on August 2, 2007, Mattel recalled almost 1 million Fisher-Price toys for using paint exceeding the lead content limit set...
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