Unsafe For Children: Mattel’s Toy Recalls and Supply Chain Management

By David Hoyt, Hau Lee, Mitchell Tseng
2008 | Case No. GS63

In August and September 2007, Mattel made a series of product recalls, totaling more than 20 million toys. The recalls were for excessive lead and for magnets that could become loose. All of the recalled toys had been made in China. The Mattel recalls followed on the heels of a number of high profile safety problems with Chinese imports, including contaminated pet food and toothpaste, defective tires, and lead-painted toys. The recalls sparked intense criticism of Mattel and its Chinese supply chain, despite the fact that more than 85 percent of the recalled toys were due to design problems (magnets), not the result of improper manufacturing (use of lead paint). The case provides a basis for discussion of outsourcing and supply chain management. The basic toy manufacturing process is fairly simple, providing a forum for discussing these issues without the complication of advanced manufacturing technology or an involved supply chain. In this case, supply chain defects, such as the use of lead paint by vendors, can have severe consequences. The supply chain must be designed to prevent these defects. The case enables discussion of why companies outsource, managing a supply chain, and the appropriate use of inspection and testing. It also provides the opportunity to examine response to a crisis situation, and the relationship between a company and government.

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