Mattel Supply Chain

756 Words4 Pages
Mattel’s Toy Recalls and Supply Chain Management The recalls in 2007 had created serious problems for Mattel and manufacturers in China. Consumers and importing country governments had responded strongly. There are several problems that lead to the Mattel recalls. At present, the most important goal for Mattel is to reassure their customers that kids' safety is their highest priority and they are committed to provide good quality toys that are safe to play with. In order to achieve this goal, Mattel has to be careful when analyzing the causes of the problems. They have to keep it in mind that their products are designed for very young children. Also, Mattel needs to restructure their supply chain and establish a direct relationship with overseas vendors. Mattel had been one of the pioneers in moving manufacturing to China; its basic strategy was to produce core products in factories that it owned, while using local vendors to produce non-core products. There are reasons for firms to outsource their productions. Large retailers such as Walmart had tremendous negotiating power over its contract manufactures, firms had to continually reduce prices in order to compete in the market. As a result, they have to looking for oversea vendors where the labor cost is very low, in order to cut costs and make profits. In addition, contract vendors helped Mattel address the highly seasonal nature of its business. There were three problems in the Mattel’s toys which were lead excess paint, defective design and misuse by customers. Despite the fact that most of Mattel’s recalled units were not due to excess lead, it damaged the company’s image. The reason of excess lead in their products was due to the problem in its supply chain management. Mattel required its vendors to use paint provided by certified suppliers and notify the company of any subcontractors. It also prohibited

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