What Level of Product Failure is Acceptable?

Tuesday, September 25, 2007 6:23
Posted in category Uncategorized

The last 3 months have been a nightmare for anyone with a Made in China sticker on their goods, and for China as a whole.

Through this process, one of the things I keep coming back to is “what level of product failure is acceptable”. For consumers, the first response is none. No product failures should be accepted. that 1 is too many…. but is that reasonable? Is it economical?

or have consumers gone a bit overboard?

In debating this, there are three examples that have particularly bothered me, or at least have led me to ask this question:

1) FTS/ Hongce Tires – One of the first cases to hit the press, this story received a lot of attentention early on.

Through press accounts, of the 450,000 or so tires imported, 2 tires failed. a failure rate of .0004%.

2) Mattel – Probably the most covered of all the recalls, Mattel has announced 3 recalls this year of more than 20 million toys across multiple categories. 20 million toys is a lot of toys, and according to a WSJ article today 2.2 million of the toys were recalled for led paint and 17.4 million pieces for magnets being too small
So, 19.6 million toys were recalled… of the more than 800 million Mattel produces on an annual basis. That is a 2.45% failure rate (manufacturing failure rate was .275% vs. product design failure rate 2.18%) assuming all the toys were made this year…..

3) Baby Cribs – The most recent recall, this is the one that really makes me scratch my head. Following the death of 3 babies/ toddlers, a recall of more than 1 million baby cribs has been initiated.

That is a failure rate of .0003%

But according to reports

in all three deaths, consumers had installed the drop-rail side of the crib upside down, the agency said. This creates a gap in the crib that children can slide into and suffocate.

so… 999,997 put the cribs together properly?

Obviously, I am cherry picking a bit to make my point, or to frame what I hope will be an interesting discussion, but at what point do we look at these recalls as being a bit over the top. Of course, the deaths that have resulted are sad and those families need to be compensated (perhaps over compensated) for what they have gone through, but these recalls have had a global impact.

When managing suppliers, and global supply chains, things are going to go wrong no matter what. For every container we have people on the ground when it ships, and for many of our shipments, we have a mid-production inspection as well to ensure that everything is coming off the line as we need it. but sometimes things get by, and that is why we have further inspections at the client sights…

As the supply chain has gone global, it is clear that many people just do not understand the basic concepts of manufacturing. Sure, they know something is Made in China, but that is all they know. Today’s consumers are so far away from the factory floor that they do not really have any idea of how their goods are made, of the economics that dictate the current pricing of their products, or just how many steps go into making a Nike shoe (I believe it is 140 steps).

Add to the general level of ignorance of how goods are made,the fact that there is absolutely no reporting at this time that highlights why product failures occur, or what are really the core issues behind the recalls (Lou Dobbs blaming “communist China” does not count) and it is no wonder consumers have unreasonable expectations.

So, I guess where I am going with this is … what level of product failure (design or manufacturing) is acceptable? Obviously the Bridgestone recall was warranted, but was the FTS recall necessary? What about the baby cribs where it was actually consumers who incorrectly put cribs together?

This is obviously going to be an issue going forward for everyone, and I hope you will weigh in with your thoughts.

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