Christopher S. Tang
When something bad happens at a factory in a developing country such as Bangladesh or China, the whole world wants to identify and punish the real culprit. However, as one digs deeper into the factory in question, the real culprit is less defined. For example, it was not a simple task to identify the person who was responsible for the collapse of the factory building in Rana Plaza (Bangladesh). Was it the factory owner? the construction company? the building safety inspector? the building material supplier? the western customers who paid the factory owner too little?
IN 2007, Mattel recalled 18 million Chinese made toys that were tainted with lead. The root cause was not easy to identify because of its multi-layer supply chain (Figure). The press exposed Mattel’s contract manufacturer (Lee Der) fairly quickly. After facing extreme pressure to close down his factory and feeling guilty for creating hardship for the factory workers, Lee Der’s owner committed suicide. While it is true that Lee Der failed to conduct its quality inspection properly, the original crime was actually committed by one of the employees who worked at Dongxing, a factory supplying paint to Lee Der. This employee was siphoning the unleaded pigment from the factory by: (a) replacing the expensive unleaded pigment with the cheap leaded pigment; and (b) selling the expensive unleaded pigment to make a profit.
The factory work at Dongxing committed a petty crime, but the impact was huge: death, factory closure, bad publicity for Mattel and for products made in China. A small hiccup along a supply chain can cause big damages, and companies must be vigilant when managing their global supply chains.
Without putting in commensurable efforts in screening, monitoring, and controlling different supply chain partners, the company itself would become the weakest link!