Problem:
John Edward, president of Edwards Toy Company, Inc. in South Carolina, has just reviewed the design of a new pull-toy locomotive for 1- to 3- year-olds. John's design and marketing staff are very enthusiastic about the market for the products and the potential of follow-on circus train cars. The sales manager is looking forward to a very good reception at the annual toy show in Dallas next month. John, too, is delighted, as he is faced with a layoff if orders do not improve.
John's production people have worked out the manufacturing issues and produced a successful pilot run. However, the quality testing staff suggests that under certain conditions, a hook to attach card to the locomotive and the crank for the bell can be broken off. This is an issue because children can choke on small parts such as these. In the quality test, 1- to 3- year olds were unable to break off these parts. These were no failures. But when the test simulated the force of an adult tossing the locomotive into a toy box or a 5-year-old throwing it on the floor, there were failures. The estimate is that one of the two parts can be broken off four times of 100,000 throws. Neither the design nor the material people know how to make the toy safer and still perform as designed. The failure rate is low and certainly acceptable by six-sigma level. However, children could choke and die when the failure happens. Also John was recently reminded in a discussion with legal counsel that U.S. case law suggests that new products may not be produced if there is actual or foreseeable knowledge of a problem with the product.
The new product line could bring a lot of revenue and people work there will not be laid off. It is such a complex issue. What should John do?