Mattel’s Chinese Sourcing Crisis of 2007
Mattel’s Chinese Sourcing Crisis of 2007
As globalization continues, and supply chains expand across the globe, how does a company like Mattel assess the risks associated with the way it does business?
Bob Eckhart, CEO of Mattel (US), had a problem
Mattel had discovered on July 30 that a number of its toys manufactured in China contained lead paint
The following month had seen a series of recalls, rising political tensions between the United States and Chinese governments, and a suicide
But no company had been in China longer than Mattel; the original Barbie had been created there in 1959
Mattel had a depth of experience and a longevity of relationships which should have prevented it. In the end it was those relationships and that longevity which may have contributed to the product safety failures.
Global Supply Chains and Risk
Toys were based on a global supply chain which was highly sensitive to petrochemical (plastics) and labor input costs, environmental and human rights sensitivities to socially responsible and sustainable business practices, transportation and logistic disruptions, border crossings, cost and time to market – all of which added to risk.
Mattel had established its Global Manufacturing Principles in 1997, in which it established principles and practices for all companies and sites which manufactured Mattel products, either company owned or licensed manufacturing
First Chinese Signal
The crisis had actually begun in June when U.S. toy maker RC2 recalled 1.5 million Thomas the Tank Engine products made in Guangdong, the Chinese province adjacent to Hong Kong and long the center for contract manufacturing by Western firms.
Mattel followed with a series of three recalls in less than one month
The first recall of 1.5 million toys of 83 different models was on August 2, most of which were produced by Lee Der Industrial, a Mattel supplier for 15 years.
The toys contained high levels of lead paint, a chemical banned many years
As globalization continues, and supply chains expand across the globe, how does a company like Mattel assess the risks associated with the way it does business?
Bob Eckhart, CEO of Mattel (US), had a problem
Mattel had discovered on July 30 that a number of its toys manufactured in China contained lead paint
The following month had seen a series of recalls, rising political tensions between the United States and Chinese governments, and a suicide
But no company had been in China longer than Mattel; the original Barbie had been created there in 1959
Mattel had a depth of experience and a longevity of relationships which should have prevented it. In the end it was those relationships and that longevity which may have contributed to the product safety failures.
Global Supply Chains and Risk
Toys were based on a global supply chain which was highly sensitive to petrochemical (plastics) and labor input costs, environmental and human rights sensitivities to socially responsible and sustainable business practices, transportation and logistic disruptions, border crossings, cost and time to market – all of which added to risk.
Mattel had established its Global Manufacturing Principles in 1997, in which it established principles and practices for all companies and sites which manufactured Mattel products, either company owned or licensed manufacturing
First Chinese Signal
The crisis had actually begun in June when U.S. toy maker RC2 recalled 1.5 million Thomas the Tank Engine products made in Guangdong, the Chinese province adjacent to Hong Kong and long the center for contract manufacturing by Western firms.
Mattel followed with a series of three recalls in less than one month
The first recall of 1.5 million toys of 83 different models was on August 2, most of which were produced by Lee Der Industrial, a Mattel supplier for 15 years.
The toys contained high levels of lead paint, a chemical banned many years