Wednesday, August 15, 2007

You can't have the cake and eat it too!

The latest in thing after the Paris Hilton saga and Lindsey Lohan's DUI is blaming the Chinese, at least in mainstream US media.  Yesterday, Mattel announced one of the largest recalls of toys ever!  Who are they blaming? - a sub-contractor in China. I am not surprised.

The US consumers have come to expect low prices on almost every conceivable good there is, thanks to the happy "outsource" manufacturing strategy adopted by many US firms.  However, what seems to be lost in this euphoria of low prices is that, such low-price regimes come with certain quality constraints.  One of the main reasons that I see why US firms are keen to outsource manufacturing is because federal compliance laws concerning safety standards are quite high and require the manufacturing firms to invest millions in testing, standards, quality control and using quality materials.  To get around this, firms have managed to outsource their manufacturing to China and elsewhere, where such requirements are often absent.  However, what I cannot comprehend is how Mattel or any other firm can act as if they did not know this was happening.  Aren't they responsible fir the debacle ? Weren't they supposed to oversee what was going into their products?  Before they can blame the Chinese, they should start blaming themselves, for lack of oversight.  I cannot simply believe that they just sat here in their board rooms assuming that the Chinese would do it right, without them overseeing the process.

The federal government has to take the blame as well.   Having a system in place that sets controls for manufacturing in the US and does not check imports for non-compliance, is nonsensical.  They let 8 million toys come into the US and did nothing! 

Although, I personally think Mattel is responsible for this debacle, I also feel they deserve credit for announcing the recall.  Finally, one cannot have the cake and eat it too!  US consumers are waking up to the realities of low prices.  Low price does not come magically - it often comes with lower quality!  I hope this is just a wake-up call for all of us before we buy something cheap at Walmart or elsewhere.

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