The Great Quality Crisis

At the root of Mattel's problems with their suppliers, various contaminated food recalls and the like are explicit failures of quality assurance (QA). Why is this happening and what can be done about it?

QA has become one of the core competencies common to a whole range of processes, a common methodology and set of objectives that encompasses just about every aspect of manufacturing and even service industries. This approach was first widely applied during the first successes of Japanese industry in the 1960s. It was recognized that by honing to well-defined, and continuously-improving quality standards, the manufacturing process could be gradually tuned to drastically reduce component failure, improving everything from profits to consumer satisfaction with greatly-enhanced reliability. Soon, in self-defense, QA became a reforming battle-cry in American industries reeling under this new-fangled sort of competition.

Another series of events, in Europe, was to consolidate QA into the wide-reaching methodology it has become. NATO, in purchasing weaponry from member countries, found that the process of developing specifications had to go much further than the obvious requirements of detailed blueprints and the like. To avoid costly errors and redundancies, the specifications themselves had to be specified, so that the provenance of all processes and sub-specifications leading to a good or service was documented in a uniform manner. Publishing every aspect of manufacturing, through specific commitments and contractual obligations, has, for the companies embracing ISO 9000 and so-called Good Manufacturing Practices, resulted in much greater success rates than "business as usual" had previously.

Although ISO 9000 compliance has a hall-of-mirrors quality, it is simply the conclusion of a painstaking attempt to be honest and explicit, so much so that one can in theory proudly document every detail of your manufacturing/service process, and withstand audits and suggested changes from ones suppliers and customers. Although this may seem to put everyone in a position of being meddled with, the realities of manufacturing, say of the AirBus, make this sort of dovetailing far from optional.

Given that this intellectual leap has been made by high-tech manufacturers, pharmaceuticals and others, and ISO exists to certify compliance and there is a body of accepted practice, software support and so on, one might reasonable wonder why ISO or GMP has not become become all but universal.

One reason is cost. Initially, the concepts and scope of ISO are difficult to appreciate and a whole internal culture of ISO-informed wisdom has to be nurtured to take hold within companies, and this may seem to have scant payoff at the start. Industries without the need for highly-coordinated specifications may feel a lack of urgency to start rationalizing their QA process to the degree required by ISO.

My impression is that, sooner or later, companies that have adopted ISO or GMP will find themselves at a significant advantage. If Mattel employs ISO, it should be far less vague about the state of its subcontractors than has been let on in news reports. If the news reports are accurate, that somehow Mattel was so lax with its own manufacturing that it was satisfied making verifying checks only every three months (and on a regular basis rather than on a surprise, random basis), then it has every expectation of being rudely awoken with back-breaking recalls on an ever-frequent basis. Given the money involved, and the acutely important issues attending the wide distribution of potentially dangerous toys to countless children, it is all but incomprehensible that Mattel hasn't been on top of safety and compliance issues not matter who their suppliers are.

For this last reason, I feel that there is much less control of the manufacturing process at Mattel than one would suspect for a company making toys. Without a synoptic view of its own and suppliers' manufacturing and safety process, any company could be quickly brought to its knees and bankrupted by random fluctuations in supplier behavior. Ultimately, the supplier will not bear the ultimate burden of the company's failure to secure its QA: That will fall on the company, its customers and shareholders.