Lego supply chain case study. LEGO's game 2019-02-22

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Lego case study Essay

lego supply chain case study

Finally, Knudstorp made big changes to the management team, firing five of seven manufacturing executives and appointing a new leader for the team. For instance, it would no longer be acceptable to make manual changes in a molding machine without informing the finished-goods packing team, an important consideration since different kits are packaged in different boxes. Despite the urgency, executives paid real attention to detail. Acquisition of Marvel Entertainment by the Walt Disney Company has created a serious impact on the securities licensing agreements toy. They would rather have the same white brick be used in both the X-Wing or Y-Wing Starfighter sets. The colorful, interlocking toys are loved the world over by youngsters who use them to design and construct buildings, vehicles, robots, and other imaginative toys. The Lego Group paid as much attention to the thousands of stores that together generated only one-third of its revenue as it did the 200 larger chains that accounted for the other two-thirds.

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Changing shopping habits are messing with Lego’s supply chain strategy

lego supply chain case study

To rebuild profitability, the company had to refashion every aspect of its supply chain. Lego can produce its bricks at a nice efficient pace and hold off on committing specific pieces to end products until there is a clearer picture of what will be demanded. Advantage: Prague In 1932 Ole Kirk Christiansen founded what is now the sixth-largest manufacturer of toys in the world. A psychoanalyst was brought in to teach the management team how to identify decision-making made by logic versus emotion. The team took a deliberate approach, building on the resin-sourcing work to analyze the true costs of each element and identify those whose costs were out of line with the rest of the stock.

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Lego

lego supply chain case study

One more strength of the company is its ability to innovate by making the use of technology without affecting the core standards of the company. Yes, but focus alone was unlikely to be the silver bullet. For nearly six decades, this way of doing business had served the company very well — and then the system started to fail. But we have to realize that technology is not replacing the physical toy. Profitable Once More Thanks in part to its supply chain transformation, the Lego Group is profitable once more. I have written extensively about Lego and how it used the process above to re-invent itself and kick into the S-curve of the Business Life Cycle which others like Kodak failed to do. Once the new transportation structure was in place, careful planning helped Lego achieve its goal of more efficient line hauls.


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Lessons learned from the LEGO turnaround

lego supply chain case study

This list shows those product lines that sells the best in 2010 and 2011. At the same time, the operational team put a process in place to help designers make more cost-effective choices. In the early years, this idea had helped the com­pany develop its brand and instill pride in its employees. Godtfred's cautious nature extended all the way to the profit margins: he championed slow, steady growth. Many new products cost the company money.


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Analysis: toy manufacturing

lego supply chain case study

In addition to this, the company wants to continue their financial success and maintain market dominance in the increasing toy industry in coming years. Answer all the Questions at the end of the case correctly 50 f. The designers seemed to take those words to heart. The team shared and debated the realities of the situation with the total workforce early in the process and consulted with them throughout in putting together the painful plans to address redundancy. Keep improving and optimizing your value chain to stay ahead of the competition. Big Box toy discounters trampled mom-and-pops and lowered prices dramatically.

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Analysis: toy manufacturing

lego supply chain case study

Globally recognized brand name as a leader in creative and imaginative toys. It frequently sourced unique and therefore higher cost materials, and did little to leverage its total buying power. Which actions were the least effective? While the bricks themselves teach children the fundamentals of construction and creativity, the company's almost century-old history of management change has important lessons for businesspeople. Sometimes they fail to do so and their business model expires like a yogurt in the fridge. What new concept is introduced in this case? Lego has worked hard to establish this brand through a number of routes.

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Changing shopping habits are messing with Lego’s supply chain strategy

lego supply chain case study

That allows for a pooling strategy. To address this, executives decided to go with near total transparency — strategies and potential changes were widely communicated throughout the company. It established more fixed production cycles, and better tied manufacturing to the rest of the supply chain. Reviews and mentions of publications, products, or services do not constitute endorsement or recommendation for purchase. Given the worldwide economic downturn, sales are unlikely to be as strong in 2009.

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LEGO's Great Business Model Turnaround Story — Strategyzer

lego supply chain case study

Although he was not a Kristiansen by birth, Knudstorp's management style and business ideals closely mirrored those of its founding fathers. Speedy attention to the supply chain, the leaders reasoned, would not only buy them time to deal with the other challenges, but could help set in motion a virtuous circle of improvements that would support subsequent changes in the rest of the company. The price of colored resins, always a major expenditure for the company, was highly volatile. New Toys should engage kids on multiple levels. The company designers were dreaming up new toys without factoring in the price of materials or the costs of production. One cross functional group was developed to focus on the overall supply chain strategy, while another was formed to drive those strategies through to execution. But the leadership team found that new products were delivering less and less profit.

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Lego case study Essay

lego supply chain case study

They also recommended cutting back on the thousands of different police officers, pirates, and other figures in production. The numbers had crept up gradually over the years, as product developers sought new materials. Putting parameters on how people innovate had the paradoxical effect of making them better at it. Advances in the field of information technology and introduction of new hi-tech form of entertainment such as tablets and gaming consoles had left Lego trailing in the entertainment field. This step alone saved more than 10 percent in transportation costs.

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