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My Lego Case Lanja

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o ran one of the largest injection-moulding operations in the world, with production sites in Denmark and Switzerland, and packing and other facilities in the Czech Republic, the US and South Korea.

The analysis: The company gathered a diverse group of senior executives and outside specialists in a “war room”, where they analysed the company’s product development, sourcing, manufacturing and logistics process. They developed a plan called “Shared Vision” and by October 2004 the strategy was approved by the board.

A new model: In 2005, through a series of collaborations between different functions in the company, Lego cut the number of colours by half and reduced the number of stock-keeping units to 6,500.

The company also decided to outsource logistics and production.

Additionally, to better understand the requirements of Lego’s key customer base, the company interviewed its top 20 clients, representing 70 per cent of Lego’s total business. This process revealed one very important trend: contrary to what the company had thought, most customers did not require daily or next-day deliveries.

This led to Lego’s decision to deliver to customers just once a week and ask for orders to be placed in advance.

Results for customer: While customers saw the number of product options reduced and were asked to change their ordering hab…...

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