Stratoserve LLC

Mature Global design Strategies improve profits

I was rather happy to read the Aberdeen report's summary which highlights that global product design and development leads to reduction in product development time and time to market while allowing the protection of intellectual property through Digital Rights Management.

This blog and my research has been investigating these issues for some time and I am glad that the data is now available. The question is how do you make it work in practice, particularly if you are not a gigantic organization that can afford to open offices worldwide and actually place your person to work with the supplier in another country. That is an interesting question .....

Toy recall , tire recall and the supply chain

Tell me frankly- if you have children are you worried about brain damage caused by lead paint from toys ? If you changed a tire recently, did you look for the "Made in" label - discreetly but anxiously.Globalization is really catching up with everyone and I feel bad for the supply chain managers at Mattel and Fisher and Price and their marketing folks and Chinese suppliers.

I can't believe that the toy specifications did not have a "no lead paint" clause in early versions. What must have happened is that marketing must have gone on pressurizing for lower costs and the supply chain managers, being less influential than marketing in organizations, must have passed on the cost pressures to the supplier who in turn passed it on to their Tier 2 paint supplier. Thus, according to CNN, one toy supplier committed suicide while the paint supplier who was in the same compound has gone missing. The paint supplier, according to the story was a friend of the toy maker and the visuals showed some of the thousand workers who became  jobless. At the consumer end, people are frantically checking toy boxes and are being advised to get the blood lead content checked for their children, and be worried only if the lead content is high. There is talk of  medical monitoring  and a fund to meet the costs of all these testings. What a mess!

For supply chain managers to have instituted lead paint checks in acceptance quality checks is ludicrous because if you live in the US lead paint is so obviously a "no-no." So why is there such a large disconnect between buyers and sellers ? Obviously because there are tiers of suppliers and everyone on the US side depends on written specifications and controls. On the Chinese side of multiple tiers in a highly context driven culture things like lead paint do not seem like  a big deal. In addition,communication,trust and an ability of suppliers to say no to unreal lower prices and an inability of buyers to understand the ground reality of overseas costs, legal and cultural environments are probably culprits here.

No amount of quality controls, PLM and SRM software, visible supply chains, can overcome this situation. A change of orientation in supplier management is called for.In the meanwhile, this situation will continue to unfold.