Response to case study scenario 1

Decision
No I would not ignore it, 3 units out of 200 is an unacceptable failure rate (1.5%)
If you look at some recalls on this website http://www.allroadsleadtochina.com/index.php/2007/09/25/what-level-of-product-failure-is-acceptable/ you can see recalls for failure rates as low as 0.0003%

If these matters are not addressed immediately, the fault will remain and more and more devices will be made to these specifications increasing the chances of death or serious injury

Safety not reliability
This is a safety issue, if it were a fault it would be acceptable as product replacement would be covered under the warranty with no embarrassment to us. However being a fire risk it violates both consumer trust and safety.

Risk to consumers.
In the UK http://www.capic.org.uk/house_fires.html states in 2004, 375 people died in house fires, the majority of these fires (53%) occurred in the kitchen, there is no count of fires caused by faulty electrical goods. As household fires generally start in the kitchen they have increased fire detection and prevention. Adding additional fire risks to other rooms poses a significant risk to consumers. A fire could start in an upstairs bedroom and could become life threatening very quickly.

Brand Impact
"Band news travels fast" is a well known saying and its very true, a product recall at this stage would affect our immediate customer, but not his customers. According to http://www.articlearchives.com/company-activities-management/product-management/1775255-1.html consumers generally consider companies recalling products to be acting morally and in the consumers interests.

From my own experience when a device does fail it has a quite serious brand value impact. I can tell you that a Lenovo Laptops purchased ~2006/2007 batteries fail after 13 months, IBM's Deskstar 75GXP is unreliable, etc etc. All of which have impacted on the brand. However recalls I've been involved in have improved it. In my work placement I was responsible for mobile phones. A Nokia had a product recall on the battery. Most of which were quite old, after 2 years of use a new battery was a welcome replacement.

What's Next
Before my decision can be considered we must understand the impact of it. I have explicitly detailed above the unacceptable risks of ignoring the problem.
Now I'll detail my proposed course of action to resolve the problem taking into account as many of the business aspects as possible.

Internal Process improvements
The testing I do is intended to highlight these risks, this has no value if I'm not reporting before goods are shipped, this internal process needs changing.

Customer impact
Our immediate concern must be to inform the customer; before we can do this we must anticipate his needs. The customer will want the following

1. Why the batch was shipped - blame the shipping clerk
2. When he'll receive his next batch - we need to immediately implement the improvements my report has identified and start producing, we can test the customers batch when we receive it and re-use any devices which don't have the fault.
3. An offer of compensation - sales need to arrange a sweetener

Financial Impact
Obviously we'll bear the costs of re-testing and re-making devices which have the fault, but this would barely be the legal costs of fighting a signal law suite (ignoring the other risks and costs if we lost a suite)

My next steps
In order to progress this matter I have chosen to re-address it with my manager (to give him another chance to assess his position with this additional argument)
I'll then tell me manager that I am not happy with his decision and take it to his superior. I'll also e-mail it to the sales person handling the clients account, the head of marketing and sales and production the manager. This will raise significant interest in the matter and result in my suggestions being acted upon. Otherwise I'll send this information to the client to guarantee a response with minimal embarrassment to my employer