Unsafe For Children: Mattel’s Toy Recalls

and Supply Chain Management

In August and September 2007, Mattel made a series of product recalls, totaling more than 20
million toys. The recalls were for excessive lead and for magnets that could become loose. All of
the recalled toys had been made in China. The Mattel recalls followed on the heels of a number of
high profile safety problems with Chinese imports, including contaminated pet food and
toothpaste, defective tires, and lead-painted toys. The recalls sparked intense criticism of Mattel
and its Chinese supply chain, despite the fact that more than 85 percent of the recalled toys were
due to design problems (magnets), not the result of improper manufacturing (use of lead paint).
The case provides a basis for discussion of outsourcing and supply chain management. The basic
toy manufacturing process is fairly simple, providing a forum for discussing these issues without
the complication of advanced manufacturing technology or an involved supply chain. In this case,
supply chain defects, such as the use of lead paint by vendors, can have severe consequences. The
supply chain must be designed to prevent these defects. The case enables discussion of why
companies outsource, managing a supply chain, and the appropriate use of inspection and testing.
It also provides the opportunity to examine response to a crisis situation, and the relationship
between a company and government.

Crocs (A): Revolutionizing an Industry's

Supply Chain Model For Competitive
Advantage
This case discusses the astounding growth of Crocs, Inc., a manufacturer of plastic shoes, from
2003 through early 2007. Much of the company’s growth was made possible by a highly flexible
supply chain which enabled Crocs to build additional product within the selling season. The normal
model used within the fashion industry was to take orders well in advance of each selling season,
and produce to those orders, with relatively little additional production. If demand was far in
excess of this production, there would be stockouts and the company would lose the ability to
capture revenue for that season. The product might, or might not, be in fashion the following year,
when production would again be based on pre-season orders. Crocs’ ability to build additional
shoes within the season enabled it to take advantage of strong customer demand, resulting in the
company filling in-season orders totaling many times that of the initial pre-booked orders. The
case describes the Crocs supply chain. It asks students to assess the company’s core competencies
and how those can be exploited in the future. The case was revised in March 2011 to present
information on the company’s results in 2007 and prepare students for discussions of problems
would face in 2008 (covered in the B and C cases).