Well, as mentioned in yesterday’s blog post, China has been found to be notoriously lax at enforcing intellectual property rights, making it riskier to source there. Then, we all heard about toothpaste manufactured in China containing antifreeze.
Yesterday, my wife alerted me that it’s been discovered that Thomas The Tank Engine toys manufactured in China have been found to contain lead paint, which could poison the children playing with them. The US government outlawed the use of lead-based paint years ago.
All of this news should be making purchasers very nervous about sourcing from China, or any other country for that matter. When countries have less rigorous environmental, health, or safety standards, you might be asking for trouble by sourcing there. There just may be a reason it is “cheaper” to buy there.
All of that incremental profit could easily be way more than offset by the cost of the recall of dangerous products. And what effect on your company’s future would there be if your company’s customers started dying as a result of LCCS decisions?
Now, I am not suggesting adopting a domestic-sourcing-only approach. Global sourcing is a necessary tool if you want to maximize your success in today’s purchasing and supply management world.
But what I am saying is that you really need to realize how much additional due diligence needs to go into selecting a foreign supplier. From the outside, it seems like the sourcing professionals who have made some of these decisions weren’t looking far beyond price.