LEGO 3

[robharris]

How can LEGO handle the supply chain complexity to improve knowledge
sharing, flexibility and coordination?

[rddiaperman]

LEGO needs to improve their communication, standardization, and
documentation. This would establish consistent operations with process
controls. LEGO should consider hiring a consultant to recommend a
solution to their complex logistical issues via a standardized
information platform to be used by all parties in their supply chain.
The improvement in communication, production control, and product
tracking would be a huge leap forward in simplification this issue.

[tiffany neff]

LEGO also needs to continue to cut down on suppliers which leads to
better communicaiton. A large problem not being able to improve
knowledge sharing, and flexibility lead to the fact that there were to
many suppliers to keep track of and create managable progess of
products. When an organization has suppliers that they need to
communicate with on a daily, weekly, or even monthy basis it is
imparative that they are able to generate strong communication
realationships with their suppliers. With thousands and thousands of
suppliers it would take hundreds of employess to maintain strong
communication between each supplier on a a regular basis. There is
less flexibility with mutiple suppliers and it is much harder to share
and develop ideas with over 11,000 suppliers as LEGO had. So LEGO
needs to reduce the amout of suppliers to improve its supply chain.

> > sharing, flexibility and coordination?- Hide quoted text -
>
> - Show quoted text -

[Brent Bascom]

Drawing on Tiffany's point, the amount of suppliers available to LEGO
make it harder for communication to be fluid throughout the company.
This is a problem that affects many global companies. Once your
company reaches a point when your employment force reaches into the
thousands, how do you maintain a clear message on flexability,
knowledge sharing, and coordination within the company? Mark also
brought up a terrific point. A way to alleviate the communication
breakdown affecting LEGO is to hire a consultant that is given the
task of simplifying communication and knowledge sharing throughout the
company. This area may in fact be the key to helping LEGO become a
leaner and more efficient company.

[Curtis Lucas]

I would agree with Eric that much of the communication could be
streamlined if that developed a consistent platform for
communication. My questionis this "Do think this problem is more
related to LEGO's complicated offerings and their supply chain having
too many suppliers?

[Gini Stieger-Lawson]

I agree with Eric and Curtis that there needs to be a consistent
platform for communication between LEGO and suppliers. For Curtis's
question about too many suppliers, this can also be an issue with
communication. Supplier partnerships are much more effective when the
number of suppliers is limited. Higher production volumes can give
LEGO an advantage when negotiating prices. The complicated offerings
required expensive molds for what could be very limited edition
products. I would be interested to know what the payback period was
on production of these specialized "licensed" products.

> > leaner and more efficient company.- Hide quoted text -

[Emily Hackett]

I also would be interested to know the payback period on the molds.
I thought it was insightful that at the end of the case, they
mentioned that one of the things that LEGO is doing is limiting the
number of new offerings and requiring a minimum % of brick SKUs that
LEGO already has. That will certainly do a lot to stem the tide of so
many new brick SKUs.
However, the communication needs to be there with suppliers. I get
the feeling that one of the things that happened is that when LEGO
developed a new product, it went looking for bids on the supplies
needed for that new product.
It usually chose the lowest cost bidder, which in many cases, was a
new company looking to get the LEGO business. Then, when up for a
renewal of the contract, the new supplier raised their prices so they
can begin making more of a profit, so LEGO reduced their PO to a
minimum quantity and set out finding another low cost bidder....I am
of course just speculating here, but that scenario makes sense to
me.

[Jonathan Nutter]

Lego most likely would not have a supplier if they didnt need
something from then, what they really need is an organized structure
to their suppliers. No where did they mention tiering their
suppliers. By only having to flow information to only tier 1 suppliers
it would greatly aid Lego in flexibility and building relationships
quicker and more effeciently. The Tier 1 suppliers could then handle
the tier 2 and 3 suppliers. This might force the merger of several of
the smaller suppliers into one company, further streamlining their
communication channel. Finally, the botched Flextronics deal did
teach them how to codify their knowledge, they need to do this not
only in production processing, but in all sections of their business.

[Priscilla Scotland]

For Brent's questions: how do you maintain a clear message on
flexibility,
knowledge sharing, and coordination within the company? I would
recommend a culture change/alignment - developing a mission that is
representative of the actions taken by the CEO downwards. When higher
level executives are maintaining a transparent effort to share
knowledge and increase flexibility, lower level associates will feel
more compelled to coordinate. Looking at their mission currently it
is still highly focused on the consumer so although LEGO has brought
manufacturing back in-house, have they really communicated their
strategy effectively - or are they doomed to repeat similar increased
SKU or outsourcing mistakes when the next CEO or two takes over and
tries to save some dollars?

On Nov 21, 8:37 am, Brent Bascom <brent.bas...@gmail.com> wrote: