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Hundreds of new companies are lured every year by the promise of
lower manufacturing costs to set up production in low cost
destinations around the world.
China, with its large workforce
and low wage rates, tops the list of low cost manufacturing
centers.
Reportedly, moving production to China could cut the cost of
manufacturing by 20 to 40 percent, depending on the type of
product.1
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However, regardless of the cost advantages of
manufacturing in China, concerns have been expressed in the recent past
about the safety and quality of the products made in the country.
In June 2007, RC2 Corporation, a toy company based in Illinois in the
US, announced the recall of 1.5 million toy train sets that were sold
under the Thomas & Friends name in the US. The reason given for the
recall was that the toy was coated with a paint that had a high lead
content, which could prove to be poisonous if ingested.
The popular toy was manufactured at one of the company's facilities in
China that was operated by Chinese entrepreneurs (RC2 refused to
disclose the name of the Chinese company or the reason why it had
started investigating into its production practices). It had been a
voluntary recall on part of RC2, and at the time of the recall no
injuries had been reported related to the train set.
Recalls of 23 other toys (made by different companies) had preceded the
recall of RC2's Thomas & Friends train set in the US, in the first five
months of 2007. All the toys had been made in China. Among the recalled
toys were a set of toy drums and a toy bear, which had also been coated
with toxic paint.
In addition to this, an infant rattle had been recalled because it could
pose a choking hazard. Another toy called the Floating Eyeball, sold by
Atico International USA Inc., a company based in Florida, was recalled
after it was found that it was filled with kerosene.
The discovery of the hazardous nature of toys made in China alarmed
consumer advocacy groups, parents and regulators. According to analysts,
toy recalls were not a matter to be treated lightly, as the potentially
dangerous products had been meant for children. Reputed toy companies
around the world usually had strict quality and safety management
practices, and monitored the safety of their products rigorously.
But increasing competition and the need to cut production costs was
leading to major safety issues. In 2007, Hasbro, one of the leading toy
companies in the world, recalled around one million of its popular
Easy-Bake Ovens following reports that several children had got their
hands and fingers stuck in the oven, with some of them suffering severe
burns. These ovens had also been made in China.
The quality and safety issues related to Chinese made goods were not
limited to toys. Reportedly, the maximum number of product recalls
initiated in the US by the Consumer Product Safety Commission (CPSC), an
agency of the federal government, pertained to goods that were made in
China. In 2006, more than sixty percent of the overall product recalls
in the US were Chinese goods - a significant increase from 36 percent in
2000.2
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1] http://www.outsourcingnetwork.net
2] Eric Lipton, David Barboza, “Toys Made in China
Set Recall Record, Alarming Parents and Regulators,” The New York Times, June
19, 2007. |
