The news is filled with actions and reactions to Mattel's 'total' recall of thousand upon thousands of toys that were apparently made with lead paint and contained some small parts. Although I am not in the toy industry, my job centers around the very problems that Mattel finds itself in today.
First, buying product from China/Hong Kong/Taiwan companies is a risk that any company or entrepreneur takes upon themselves when they get into the import/export racket. If you are a one man operation, you are relying an awful lot on a quick look-see of the operations, and then the ability of the managers of the factory you are purchasing from to do the right thing and provide you the exact product you have bought.
For a large corporation with billions in revenue and assets, you would think this would be an easy task. But, the toy business is cut-throat in this region and those factories are often squeezed very tight in order to maintain profit margins for their buyer. The task is just as difficult for them as it is for the small guy. The difference is...the larger corporation has the resources to put behind the product process to monitor and ensure its products are being built to its specifications.
In Mattel's statement, they said this:
"We have immediately implemented a strengthened three-point check
system: First, we're requiring that only paint from certified suppliers
be used and requiring every single batch of paint at every single
vendor to be tested. If it doesn't pass, it doesn't get used. Second,
we are tightening controls throughout the production process at vendor
facilities and increasing unannounced random inspections. Third, we're
testing every production run of finished toys to ensure compliance
before they reach our customers. We've met with vendors to ensure they
understand our tightened procedures and our absolute requirement of
strict adherence to them," said Jim Walter, senior vice president of
Worldwide Quality Assurance, Mattel.
Reading this statement, I am assuming that none of these protocol's were in place currently and that these are all new; 'We have immediately implemented...' That is scary...and it brings me back to why I live in China in the first place...to do exactly all the things that Mattel has apparently not been doing in the first place with the company I work for.
To expand a little further with what Mattel was or wasn't doing with its product, you have to look at the supplier. Remember I mentioned the single entrepreneur who had to trust he was getting what he was buying...in a way large corporations are held to the same sort of standard. You can put in plenty of processes and procedures to ensure your products are being made with only approved materials from approved vendors in approved facilities. But, if the supplier wants to get around that, they will. Business is built on the honor system. And, with a completely corrupt system that is China and much of SE Asia, it is difficult to follow along sometimes.
Example...if the supplier is really getting squeezed by the buyer to hit a target price for his goods...he has a choice, meet the price or refuse the orders. Refusing the orders could shut his factory down and he could lose thousands. Accepting the lower price, puts pressure on him to earn his thousands. Two thirds of the cost of any product is materials...the supplier will look to that for cost savings. By substituting where he can from lower cost vendors, he can effectively make his money, while his buyer is left clueless (provided they don't have a rigorous testing regimen for their materials and suppliers).
Unfortunately when you listen to the business pundits and the talking heads of the media, they tend to focus on the business practices as though you are doing business in the USA with another USA company. China didn't get to be the fastest growing economy in the world by sitting around following the rules. People have one thing in mind here...make money...period. It doesn't matter how they get there. The risks of getting caught substituting cheaper material is so much smaller than the money made from doing it...so they will do it.
I dread the day that this sort of thing happens to me on my watch...but it will...I know it will. My job here is to keep alert to my product and the processes and ensure that we have all our bases covered so it doesn't happen. Apparently, Mattel didn't do that and now they are paying for it.