RE: Lead Elements in “True Heroes” Police Action Figure
A. Lead Contamination – Problem and Solutions
Upon recent inspection of the “True Heroes” line of action figures, our quality assurance team detected lead elements in the whistle of the police action figure. According to their testing, the lead content is above that which has been identified as a legally acceptable limit for children age 7 and under in the U.S. We are in the process of fulfilling a 6 unit order set to ship out this week to schools in South America. It has been estimated that the cost to reproduce the product and repack the product will be close to $100,000.
After studying the situation and the facts, I have come up ...view middle of the document...
It is important to express to the client that it the safety of our products is our highest priority and that we will do whatever it takes to ensure that our products meet and/or exceed U.S. safety standards. Once the whistles have been replaced, we would then repackage and ship the products to the client. If the client expresses discontent with the delay, we could offer them a discount on the units ordered.
The problem with this solution is that it comes with a hefty price tag. As previously stated, the estimated cost to repackage the toys is $100,000. This is exclusive of any discounts that we might offer the customer. There is also a chance that the customer may cancel the order entirely due to the delay and seek products from our competitors. However, an advantage of this approach is that by remaking the whistles, this option shows our dedication to the quality and safety of our products. It also shows our commitment to making ethical decisions through our openness and honesty to our customers. It also eliminates the potential for legal actions that the first option could potentially have by leaving the lead contaminated whistles in the South American shipment.
A third solution would be to use another whistle from a different toy line that already meets our quality and safety standards and swap out the contaminated whistle. I have identified such a whistle in our “Stars of the Field” action figures line. For this toy line, we currently use a plastic whistle which is the same size as the metal whistle in the “True Heroes” line. Checking our stock, we currently have enough back stock to fulfill the current units on order. While we work to replace the whistles with our back-stock, we can place an order for more for both lines. The time it will take to swap the whistles and the reduced cost of the plastic whistle over the metal one will not only save the company up to 75% of the cost to completely repackage the toys but also allow us to meet the customer’s shipping deadline.
By using plastic whistles, the company can void the ethical issue of shipping products out to foreign client’s whose governments do not have the same high standards for product safety. It also virtually eliminates the risk that future whistles will be contaminated since no metal will be used. The draw backs of this option are that there is still a cost associated with removing the old whistles and adding the plastic ones. We have also had complaints from customers in the past that the plastic whistles are less durable than the metal ones.
In summary, after identifying the problem and gathering the relevant facts, I have come up with three potential alternatives: 1) ship the products as is, 2) contact the client with the problem and repackage new whistles, or 3) replace the whistles with existing whistles from another toy line. The following is my recommendation for action.
After analyzing the pros and cons and giving considerable thought of the...