Mattel: We Need You, China

As I was busy dissecting the Ariba/Procuri deal and hanging out in China the past couple of weeks, I took my eye off the "made-in-China-quality" ball, missing a story about Mattel's recent apology to their Chinese suppliers for passing the buck on a recent set of product recalls. According to a story on MSNBC, Thomas Debrowski, Mattel's EVP for Worldwide Operations, was quoted as saying "Our reputation has been damaged lately by these recalls ... And Mattel takes full responsibility for these recalls and apologizes personally to you, the Chinese people, and all of our customers who received the toys." MSNBC then goes on to note that "this kowtow isn’t a sudden outbreak of good manners or even responsibility at a Fortune 500 company. Rather, it's a sign of how the balance of power has shifted between massive American consumer-products companies and their rapidly growing China-based suppliers."

Given the reliance of so many North American manufacturers and retailers on Chinese suppliers -- especially in low-cost, high volume product categories -- it's not surprising that Mattel would adopt a Chinese way of doing business by helping its critical supply partners save face. I mean seriously, there's no doubt in my book that Mattel's Chinese suppliers were in part to blame for the recent safety-related issues (regardless of what Mattel said in the headlines). But accepting responsibility and moving on is a cultural smart strategy. Especially considering Mattel has no other choice. MSNBC notes that in today's world, Mattel "can't do business without Chinese partners. In a highly competitive environment, they need suppliers who can turn around new products quickly, complete their orders ahead of those placed by rivals, and commit to maintaining the desired production levels at the desired costs. Yes, Chinese toy producers need Mattel's orders. But it's now a two-way street." Indeed it is.

Jason Busch

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