Executive Summary

Mattel has been criticized heavily for having to recall not once but thrice in 5 weeks 20 million toys manufactured in China with lead paint and/or loose, potentially dangerous magnets. Clearly Mattel does not have sufficiently tight quality control procedures in its supply chain to compensate for the extra risks of outsourcing to Chinese subcontractors and clearly there are design flaws in the toys with the magnets that could come loose. Although many observers give the company credit for responding to the crisis quickly with an apology from the CEO and pledges to institute more rigorous product safety checks, Mattel still faces a number of problems, including significant costs associated with the recalls and new
Recommendations

Long-term quality assurance measures:

Quality assurance needs to cover all activities from design, development, production, installation, servicing and documentation as well. Product quality and safety have their roots in the design process. Mattel must screen designs for a range of safety issues long before a part goes into production. For example, they could look for strangulation and suffocation, as well as part features that could pinch, cut or poke a child much before these designs hit the production floor.
Mattel needs a quality assurance process that will permit only approved raw materials to be used in the production, will check every batch of goods from the sub-contractor (and sub-sub-contractor) before it reaches the supplier, will check every production run of finished toys from its suppliers to ensure compliance before they reach its customers. Mattel also needs to increase random inspections by both internal and external auditors and quality inspectors. Mattel needs to test failure rather than test compliance, which is the practice in the rest of the toy industry11. Testing to failure has its own benefits as it reveals root causes of problems in ways that often remain hidden with compliance testing. Mattel needs to continue to invite independent and public monitoring of its manufacturing facilities12.

To address the above long-term quality assurance measures, it is recommended that a