Risk can be defined as “potential disturbances with their negative consequences”. Sharma & Bhat (2011). The objective of this assignment is to examine Mattel’s Toy recalls. In doing so a risk assessment of Mattel’s supply chain practises before the recall will be formed, the actions taken by all parties involved in the production of those toys that were recalled will be examined, the recalls impact on Mattel will be examined, the transparency and accountability of global supply chains will be identified, and Mattel’s current supply chain will be assessed to identify whether they now effectively managing risk.
Two means of risk assessment taken by Mattel prior to the first recall have been identified.
1) According to Hoyt, Hau & Mitchell (2008);
Mattel inspected materials when they came in the factory door. Suppliers were monitored for problems such as lead-based paint, and some vendors had been terminated for violations. Mattel developed about 5,000 new toys each year. New toys were first produced in small batches before approval. When full-scale production began, the company would periodically take toys off the production line for inspection. (p.3)
2) Hoyt, Hau & Mitchell (2008) state that;
Mattel required that factories in its supply chain use paint and other materials provided by certified suppliers. The company claimed that it did not put undue price pressure on suppliers, particularly as it related to paint. (p.3)
The framework (see figure 1) which has been chosen to form a risk assessment of Mattel’s supply chain practises before the first recall is the five step process for global supply chain risk management and mitigation. Manuj & Mentzer (2008) Manuj & Menter’s (2008) framework includes the following steps and will be used to form an assessment of Mattel’s supply chain practises before the first recall:
Figure 1 A five step process for global supply chain risk management and mitigation (Manuj & Mentzer (2008:137)
Manufacturing Problems Mattel identified the possibility of trademark infringement and the production of imitations.
Mattel identified the dangers that lead based paint has and acknowledged the problems that would occur should it be used on their products
Design Problems Mattel failed to identify the risk of potential defects in product design ahead of production
Product Misuse Mattel failed to identify the risk of potential misuse of products by consumers prior to production of the products
Manufacturing Problems Mattel took action to prevent the occurrence of potential manufacturing problems. This shows that having assessed and evaluated the risk they saw the severity of the risk being high and a threat to the company should it occur.
Design Problems ...