I was doing some research yesterday on manufacturing quality control better practice in China when I came across the Sept 2007 Congressional testimony of Mattel CEO Robert Eckert regarding the lead paint related recalls of Chinese made toys. The testimony was very interesting, I was surprised at the level of detail regarding Mattel's operations.
The last I remembered, Mattel had issued an "apology" to China, saying that the recalls were the result of its own "design failures". I remember thinking when I heard that that it was typical China ass-kissing by Western corporations. It turns out that with a close reading of the "apology" one learns that it refers only to the loose magnet related recalls and not to the lead paint.
There were 3 main reasons given for the lead paint issue. All of these should be familiar to anyone with responsibility for procurement in China, but usually aren't familiar at all:
1) Use of undisclosed subcontractors by approved vendors
2) Use of undisclosed manufacturing facilities by approved vendors
3) The sale by a subcontractor of approved paint provided by Mattel to its vendor (who then provided it to the subcontractor) and then substitution with inferior (in this case lead tainted) paint
This follows on nicely from a meeting I had last night with a major global corporation who runs a large fleet of vehicles and found a very high level of non-conformance in safety related parts it purchased in China. In that case there was an issue of undisclosed subcontracting and substitution of components as well.
With the proper controls in place, it is perfectly possible to realize low-cost savings while ensuring consistent quality. Unfortunately, company after company after company is sourcing in China and company after company after company makes the same errors. Its really quite depressing.