1. Mattels global sourcing in China, like all other toy manufacturers, was based
on both low-cost manufacturing, low-cost labor, and a growing critical mass of
factories competitively vying for contract manufacturing business. Do you think
the product recalls and product quality problems are separate from or part of
pursuing a low-cost country strategy?
Many companies in many industries have been using low-cost countries
for much of their sourcing for many years, so this process and experience goes
back more than four decades in some industries. Companies which have
relatively more experience in low-cost country sourcing will be the first to
acknowledge that a higher level of diligence is required because many of these
new business venues the people, the processes, the institutional frameworks
including social expectations and product health and safety laws are either new
or non-existent in many of these countries. It is therefore hard to see product
recalls and quality issues separate from the low-cost country strategy; these are
issues which are part and parcel of this off-shoring or best-shoring business
practice.
2. Whether it is lead paint on toys or defective sliding sides on baby cribs, whose
responsibility do you think it is to assure safety the company, like Mattel, or the
country, in this case China?
The company its leadership and management must be the first line of
responsibility and accountability for quality and safety for any product or service
it provides. The customer ultimately expects the company via its brand and
product image to assure them that the product is safe, regardless of how and by
whom and where it was sourced, manufactured, assembled and distributed. The
customer also rarely can know the sourcing of the products and their
components; that is competitive information on the part of the producer and is
often not shared with potential customers. If part of the marketing process for a
product distinguishes where its parts and components were manufactured and
assembled, then the sourcing and assurances of the manufacturer.
3. Many international trade and development experts argue that China is just
now discovering the difference between being a major economic player in global
business and its previous peripheral role as a low-cost manufacturing site on the
periphery of the world economy. What do you think?