Somewhat lost in the hubbub over the recall of 1.5 million toys from Mattel over safety concerns from use of lead-based paint by a Chinese supplier is that it highlights the increasingly obvious need for companies to take more proactive control of their entire global supply chains, and make additional investments to ensure safety. (See Global Supply Chain: What Will the Supply Chain Fallout be from the Mattel Toy Recall?).

Mattel, for example, relied on the offshore supplier to do its own testing, based on a level of trust built over a 15-year relationship. But it now seems clear that the supplier’s own testing of the paint, which came from another supplier was inadequate, and it also appears Mattel did not adhere to its own auditing process of the suppliers QA procedures.

A Wall Street Journal story on the Mattel incident shows the challenges – and costs. In 2003, retailer Toys 'R' Us was also involved in a recall related to lead paint, despite a rigorous inspection process during product development and launch. All was fine for awhile, but later, spot checks found lead-based paint, prompting a costly recall.

Since then, the retailer has increased its QA budget by 25%.

McDonald’s, which used Chinese suppliers for its promotional toys, tells the WSJ that the problem of lead paint is so widespread in China that the company has developed a system to monitor paint all the way through the supply chain back to the paint suppliers. The company requires its Chinese toy makers to agree to use only those suppliers.

All this means added cost to the offshore equation that must be considered when making global sourcing decisions. With many companies already not fully calculating the total costs, the QA area must be added to the spreadsheet to get an accurate picture of total landed cost.

It is also likely that new regulations will add additional costs to the supply chain in the name of protecting product safety.