News: The well-publicized recall of
1.5 million lead-tainted toys made in China
is having ramifications across corporate
supply chains, with
regulators, and Chinese officials. Meanwhile,
Mattel finally identified the factory that
produces the recalled products, with the
week-long delay in naming the Chinese supplier
likely to spur regulatory efforts to close
perceived loopholes in existing law.
SC Digest Says:
in naming the supplier alone is likely
to create calls to change the regulations
allowing the sourcing location to be
withheld, as government officials and
others will argue the supplier may be
sending other dangerous products into
the U.S. that also need to be stopped
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Mattel recall of more than one million toys
from its Fisher-Price division, encompassing
approximately 83 products on which the Chinese
supplier used lead-based paint, is the latest
in a series of high publicity incidents
related to the product safety of imports
The result is almost sure to generate even
more calls from Washington
to add regulations to offshore procurement
processes, and has CEO and Supply Chain
executives increasingly nervous about the
costs and risks in Chinese sourcing.
Story: The giant recall involved some
of the Fisher-Price unit’s most popular
toys, including Elmo, Dora the Explorer,
characters. This latest incident of unsafe
products from Chinese suppliers is adding
fuel to the growing call for stronger regulation
of Chinese imports. (See Will
Product Safety Issues Create Need for an
"Import Czar?"). It is
almost certain that additional legislation
will soon be introduced into Congress to
strengthen existing law.
the increased scrutiny from government and
the huge levels of negative publicity and
cost to Mattel from the recall incident,
will CEOs of other companies slow down or
reverse the rush to China
as an offshore supplier?
the cost to pull out of China would be huge
and unrealistic for many companies already
invested there, those that haven’t
made the move, or are considering offshoring
additional products there, will probably
slow down for a bit, experts say. In addition,
added costs to better ensure safety, and
additional costs likely to be added to the
supply chain from coming regulations, will
further reduce some of the advantage of
going offshore to China, the focus of attention
in Washington. (See
Global Supply Chain: Mattel Incident
Shows Companies Can’t Go On the Cheap
when Sourcing from China, Must Take Proactive
Control of Entire Supply Chain).
a week after the controversy started, Mattel
named the Chinese company responsible for
using the lead paint, saying the toys came
from Lee Der Industrial Co. Ltd., located
province. Under current U.S.
law, distributors and importers are not
required to identify the specific manufacturers
of recalled goods. Despite requests to identify
the supplier, Mattel had declined to do
so until yesterday, saying that it did not
want to name the Chinese supplier before
completing an investigation.
in naming the supplier alone is likely to
create calls to change the regulations allowing
the sourcing location to be withheld, as
government officials and others, with some
logic, in SCDigest’s view, will argue
the supplier may be sending other dangerous
products into the U.S. that also need to
be stopped or recalled.
Mattel’s senior vice president of
world-wide quality assurance, said, "It's
my understanding that [the Chinese supplier]
is producing toys for other companies."
is your view of the current mini-crisis
over product quality from China?
Should Mattel have named its supplier faster?
Do you believe all this will stop some companies
from moving offshore? What regulations would
help? Let us know your thoughts at the Feedback