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) ...
... middle of paper ...
...
2. Are we improving – are we delivering improved customer satisfaction, launching more new products, helping grow the company’s sales, improving our profits?
3. Do our people think we are a good place to work – is their environment improving?”
According to Gibson as long as all three questions are focused on the supply chain system with run efficiently and smoothly.
It is evident that Mattels core focus has changed considerably- especially when compared to their focus prior to the first recall. It is evident that Mattel now focuses its attention on doing the right thing for “regulators, retailers, customers and suppliers ahead of damage control or profits.” (Hurley, 2012) In doing so Mattel has built credibility around its supply chain risk management capabilities and regained the trust of the general public as well as that of other stakeholders. (Deschene, 2007)
Metalcraft’s scorecard was developed to address control issues in the supply-chain. The scorecard was a tool that provided Melalcraft a single reference point on supplier performance over a period of time along three dimensions: quality, timing and delivery. There were several business functions that utilized the scorecard; buyers, plant engineers, supplier development engineers, suppliers and various other users within the Metalcraft organization. The scorecard was also used to evaluate supplier performance at both the individual plant level as well as the aggregate supplier level. The scorecard classified supplier performance metrics with color recommendations indicating the degree in which Metalcraft would base future sourcing based on their “color” quality rating.
July 13, 2007 is the day Mattel learned their Sarge die-cast toy cars, manufactured in China, contained lead levels in excess of U.S. federal toy safety regulations (Pearce & Robinson, 25-1). The United States implemented safety regulation regarding lead-based paint years ago, as officials were aware of the potential health concerns lead can cause. The products manufactured in China leading up to the recalls in 2007 were of substandard quality, and posed serious health risks to the children of the United States. High levels of lead paint can have a detrimental effect on the health of children. Lead can damage chi...
Toy World has been facing two basic issues, as follows. The first one is if it has to change to a monthly production level. The second area of concern is the financial arrangement with the bank. These two points are analyzed in detail here in this paper. Finally, I have suggested some recommendations for the issues that I have mentioned above.
Our commitment to steady, long-term improvement in our products and processes is the cornerstone of our business strategy. To achieve this objective, we must work to continuously improve the overall quality of our design, manufacturing, administrative, and support organizations.
In 2007, the international toy manufacturer, Mattel, Inc. issued several recalls for millions of their products. These recalls were for safety reasons in that testing at the manufacturing sites and special test laboratories showed that millions of their toys were coated with dangerous amounts of lead in the paint. This lead based paint contains a potent neurotoxin that if ingested can cause serious harm to children. Mattel assured the public that the problem would be solved, the recalled products would be collected and replaced, and that the company would never let this type of incident happen again.
Woolworths LTD has commissioned EA partners for auditing their supermarkets chains. Therefore it is important to prepare a risk analysis report to be added in the audit plan in order to identify and analyze possible events that could have an impact in achieving the company’s objectives. The element of risk is embedded in every business, the risk of not achieving the company objective. Risk assessment is important to the effective operations of the company. Risk Assessment is increasingly in demand today because of the increase demand in transparency that revolves around risks. The business is under continuous scrutiny of whether the correct mechanism was in place at the time of the crisis or whether the correct information was delivered and so on. This is why risk assessment has become a part of the business auditing today.
Supply Chain Responsibility is the chain-wide reflection of issues beyond the narrow economic, technical and legal needs of the supply chain to achieve social and more importantly (in the ongoing era of global warming and natural disaster) ecological advantages along with the conventional financial expands. However, according to Laura Spence and Michael Bourlakis (2009) the key features of supply chain responsibility are:
Christopher (2011) pointed out that resilient supply chains are not the most affordable however they are more competent when dealing with uncertain organisational environments; this creates a conflict of interests.
As a consultant for Toys, Inc., I have been called in for my advice by the company’s president, Marybeth Corbella; on which of the two proposed options would be best for the company and for the customers as well. Toys, Inc. is a 20-year-old company that produces toys and board games, our company has a reputation built on quality and innovation. Although we have been the market leader in our field, the sales have become stagnant in recent years, and sales have begun to decline when comparing them to the sales in the past. With the company’s managers attributing the decline of sales on the economy, the company was forced to reduce production costs and layoffs in the design and product development departments; this action will hopefully increase
Lack of coordination in a supply chain is costly and highly disruptive. The readings this week described several factors that can lead to supply chain problems. Most of the problems occur when there is ineffective communication between the different stages of a supply chain. Within a supply chain each stage may have a different owner and different performance indicators or measures. If each stage if focused on its own local objectives this may conflict with the overall success of the supply chain and of the other stages. In many cases, information passed from one stage to the next is delayed, incomplete, misleading or inaccurate. This makes coordination a challenge.
An operations leader at Ford Motors, having successful approaches to the supply chain management needs knowledge of warehousing, manufacturing, transportation, logistics as well as customer service. Products also need to deliver to consumers on time, as well as cost-effective ways which will meet demands (The University of Scranton,
As the future risks are unpredictable, researchers believe that by putting effort focusing on identifying and assessing risk with collaboration of stakeholders and being proactive into supply chain operations can drive to prevent supply chain disruptions and mitigate risks.
A supply chain entails various entities that are involved in the beginning to end business process of delivering a product (good or service) to its end consumer (Cooper, Lambert & Pagh 1997). This process of supply chain management (SCM) consists of many activities and information flows such as the procurement of materials, the process of manufacturing and packaging, followed by the storage and warehousing of the finished products before being distributed to retailers for the end user’s consumption (Cooper, Lambert & Pagh 1997; Griffin & Thomas 1996). SCM involves the coordination of the following functions: strategic supplier partnerships, quality of information sharing, management of internal functions and loyal customer relationships (Barbosa-Póvoa, Barros & Blanco 2013). Successful integration of these functions should, in turn, enhance the flow of output and maintain an effective relationship between suppliers and customers and hence ensure their expectations are being met (Hung et al. 2010).
The Institute of Risk Management (IRM) believes that risk management is a key part of the strategic administration, encompassing methodical approach towards risks associated with their activity (IRM, 2002). Its purpose is to achieve the benefit not only within a particular activity, but also within the portfolio of all activities. Emerging in early 1990’s (Power, 2004), the risk management as a strategy aimed at reducing and optimising the cost of insurance in many companies (Olson & Wu, 2010). Other areas, namely, health and safety, environment, legal, finance, to name a few, have also commenced adopting similar approach (Hasle & Limborg, 2006). In order to manage organisational risks within different areas of a company’s activity, unconnected
Interestingly, they include the time and the frequency of risk along with the common risk dimensions, probability and impact. The risk dimension of time is viewed as the speed of the event, the speed of losses and the time for detection of the events. This time perspective follows the same ideas as in Sheffi and Rice (2005), where the authors describe the disruption profile by associating supply chain performance with time. Both studies stress the significance of time to risk