| |
In lugnet.lego, Arne Lykke Nielsen wrote:
> Hi,
>
> Just noticed this press release:
>
> http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=12504&countrycode=2057
>
> Kjeld Kirk Kristiansen retires, and LEGOLAND parks will be a seperate company,
> after new losses this year.
>
> Arne, Copenhagen
Wow, Jørgen Vig Knudstorp looks really young for a CEO of a company the size of
LEGO. Good for him, I hope he can make it happen for LEGO.
jt
|
|
| |
In lugnet.lego, Arne Lykke Nielsen wrote:
| |
Hi,
Just noticed this press release:
http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=12504&countrycode=2057
Kjeld Kirk Kristiansen retires, and LEGOLAND parks will be a seperate company,
after new losses this year.
Arne, Copenhagen
|
Wow, the new CEO is only
35 years old - he was 8 or 9 when Space came out!
Good luck to Mr. Knudstorp!
Marc Nelson Jr.
|
|
| |
In lugnet.lego, Marc Nelson, Jr. wrote:
| |
In lugnet.lego, Arne Lykke Nielsen wrote:
| |
Hi,
Just noticed this press release:
http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=12504&countrycode=2057
Kjeld Kirk Kristiansen retires, and LEGOLAND parks will be a seperate
company, after new losses this year.
Arne, Copenhagen
|
Wow, the new CEO is only
35 years old - he was 8 or 9 when Space came out!
Good luck to Mr. Knudstorp!
Marc Nelson Jr.
|
He’s AFOL age. (average age being 30 ish, not based on any real numbers, just an
observation) and probably remembers classic space as a kid. Good news!!!!
|
|
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In lugnet.lego, Marc Nelson, Jr. wrote:
| |
Wow, the new CEO is only
35 years old - he was 8 or 9 when Space came out!
|
Yeah, he’s a sharp cat. As I understand, Kjeld is stepping down as planned (he
came back into the daily operations fold to help get things back on track). Now
that the Action Plan is in place and seems to be working, he’s turning over
daily operations his hand picked successor.
Jake
---
Jake McKee
Community Liaison
LEGO Community Development
|
|
| |
| |
Yeah, he’s a sharp cat. As I understand, Kjeld is stepping down as planned
(he came back into the daily operations fold to help get things back on
track). Now that the Action Plan is in place and seems to be working, he’s
turning over daily operations his hand picked successor.
Jake
|
I hope you’re right, but the two top guys in TLC now have a combined 5 years
experience with the company and it’s all on the financial side.
Spinning off the parks, or selling them outright, sounds ominous. It suggests a
level of distress calling for drastic measures. I cannot imagine TLC divesting
LL Billund because it’s so close, physically and emotionally, to the heart of
the company and its history. But I could see LLCA gone in a hearbeat -- it’s a
small kid theme park in very competitive market. Personally, that’s very sad. My
wife and I just bought Ambassador passes only a few weeks ago. We aren’t
interested in LLCA as a theme park, but as a link to TLC.
If I were taking LEGO back to basics (the recurring theme of the past 12 years),
I would still want to push the Brand Retail concept in areas were it could be
combined with multi-acre Minilands and special event centers. LEGO knows how to
build bricks better than anyone else, but competing to make the better
rollercoaster is a different ballgame.
-Ted
|
|
| |
In lugnet.lego, Mike Kollross wrote:
> In lugnet.lego, Marc Nelson, Jr. wrote:
> > Wow, the new CEO is only
> > <http://cache.lego.com/upload/contentTemplating/LEGOAboutUs-PressReleases/otherfiles/2057/upload7A6EF65A-234F-4E59-99B4-9DA9F7B94C81.pdf
> > 35 years old> - he was 8 or 9 when Space came out!
> >
> > Good luck to Mr. Knudstorp!
> > Marc Nelson Jr.
>
> He's AFOL age. (average age being 30 ish, not based on any real numbers, just
> an observation) and probably remembers classic space as a kid. Good news!!!!
But does he LIKE the product, or is this just a job for him? Ditto the CFO... I
have opined in the past that I wonder how many Danes view working at LEGO as
just another job rather than as a passion....
Also, I have to say I was puzzled by this previous release in the context of the
new release:
http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=9062&countrycode=2057&yearcode=2004&archive=true
(April: a new Senior VP, Patrick Bogaers, for Supply Chain is appointed,
replacing the old one)
But Patrick Bogaers is not listed as the Senior VP for Supply Chain in the new
announcement!!! That is now Lars Altemark. No statement of why, of course,
that's not typically done.
Note this statement from the release:
" During the second half of the year a small proportion of European sales was
adversely affected by supply problems involving the Company’s best selling
products – but this situation is expected to be brought under control during the
coming weeks. "
As I have opined many many times here and elsewhere, supply chain management,
product lifecycle management, accurate and geography specific demand
forecasting, and nimble reaction to changes in demand are absolutely vital in
todays day and age.
I'd opine that LEGO *still* doesn't have this right. Third supply chain VP in a
year, acknowledgement of supply chain problems, acknowledgement of overcapacity
coupled with inability to meet demand... not good. Lots of room for improvement.
Consider this from a recent Information Week:
(it's a long article about various Walmart IT initiatives, a really good read if
you care about this stuff even if IW is a free magazine)
http://www.informationweek.com/story/showArticle.jhtml?articleID=47902662
"Today, Wal-Mart captures all the day's sales and product data across its global
operations on an hourly basis. Database queries can start running as soon as
data is available. That ability comes in handy, particularly on the Friday after
Thanksgiving, when Wal-Mart buyers start watching what's happening in stores at
6 a.m. on the East Coast, then use that data to make decisions in real time that
can affect the big day's sales. Wal-Mart once used its data prowess on a Black
Friday to query sales of a PC advertised in a circular; when execs found out it
wasn't selling well, they called stores and discovered the reason was that
customers thought they had to pay separately for the system and monitor. So
store clerks quickly put the two boxes together and spelled out the
pay-one-price deal in a sign. "We've done a lot of work for performance and
availability, and making sure the data is current," Phillips says."
Now, Walmart is a retailer not a manufacturer. But note that they track demand
on an hourly basis and react instantly.(1) How often does LEGO track demand?
Walmart encourages their suppliers to colocate in AR for efficiency, either the
warehouses or the manufacturing itself.
Contrast that with LEGO. LEGO chose to centralise manufacturing and uses sea
shipping to reach US and Asian markets. How could they possibly react quickly?
Closing Enfield molding and manufacturing in my view was a penny wise, pound
foolish decision. Molds can be sent by air! But product can't economically be...
They've lost the ability to react to North America demand changes in days
instead of weeks.
XFUT out of .general to just lugnet.lego
++Lar
1 - Ascential products may or may not be part of how they get this done... I
couldn't officially say. But suffice it to say that we can load and unload
Teradata databases faster than anyone else (since we exploit native parallel I/O
capabilities) and WalMart is a *huge* TeraData installation. You connect the
dots. It's either us or Informatica.
|
|
| |
In lugnet.lego, Arne Lykke Nielsen wrote:
> Hi,
>
> Just noticed this press release:
>
> http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=12504&countrycode=2057
>
> Kjeld Kirk Kristiansen retires, and LEGOLAND parks will be a seperate company,
> after new losses this year.
>
> Arne, Copenhagen
Follow-up: In the Danish TV News, in two interviews,
the new CEO said, that most of the production would probably be moved to China
(where Click-its and many parts are already made)
and
KKK said that the trouble for LEGO was that they had focused too much on growth,
and had becomed too dependant on licensed products, as opposed to the basic
brick !!!!
and furthermore it was mentioned, that KKK will give 800 mill DKr (appx 140 mill
US dollars) of his own personal fortune to TLC.
Arne, Copenhagen
|
|
| |
In lugnet.lego, Larry Pieniazek wrote:
> As I have opined many many times here and elsewhere, supply chain management,
> product lifecycle management, accurate and geography specific demand
> forecasting, and nimble reaction to changes in demand are absolutely vital in
> todays day and age.
Absolutely agree.
> I'd opine that LEGO *still* doesn't have this right. Third supply chain VP in a
> year, acknowledgement of supply chain problems, acknowledgement of overcapacity
> coupled with inability to meet demand... not good. Lots of room for improvement.
I'm not sure how much of the problem is a 'TLC supply chain issue' tho. Perhaps
it is in EU where the supplier is more closely coupled with the retail outlets.
On this side of the pond I have seen much LEGO product that a particular
ratailer could have sold (at full retail) had they merely market shifted it to a
different market where it would sell better. Perhaps that would actually cost
more than just clearancing it where it sits. If anything, retailers (like WM
mentioned below) should perhaps keep more of the product warehoused and dispatch
it to the stores more quickly as it sells-through in the store. I think that is
some of what the article (mentioned below) alludes to. The existing model seems
to be a 'high speed dispatch' from Enfield to the retailers warehouses to the
actual stores (where it gets effectively warehoused until finally disposed of).
In the case of TRU, they will shift stuff from one store to another (typically
at a customer's request), but the logistics causes the transfer to take anywhere
from 6-10 weeks (which is not acceptable for most customers).
> Consider this from a recent Information Week:
>
> (it's a long article about various Walmart IT initiatives, a really good read if
> you care about this stuff even if IW is a free magazine)
>
> http://www.informationweek.com/story/showArticle.jhtml?articleID=47902662
Yes, most interesting article. I read that when it was /.'ed a week or two back.
Ray
|
|
| |
In lugnet.lego, Ted Michon wrote:
| |
I hope you’re right, but the two top guys in TLC now have a combined 5 years
experience with the company and it’s all on the financial side.
Spinning off the parks, or selling them outright, sounds ominous. It suggests
a level of distress calling for drastic measures. I cannot imagine TLC
divesting LL Billund because it’s so close, physically and emotionally, to
the heart of the company and its history. But I could see LLCA gone in a
hearbeat -- it’s a small kid theme park in very competitive market.
Personally, that’s very sad. My wife and I just bought Ambassador passes only
a few weeks ago. We aren’t interested in LLCA as a theme park, but as a link
to TLC.
If I were taking LEGO back to basics (the recurring theme of the past 12
years), I would still want to push the Brand Retail concept in areas were it
could be combined with multi-acre Minilands and special event centers. LEGO
knows how to build bricks better than anyone else, but competing to make the
better rollercoaster is a different ballgame.
-Ted
|
Interesting that you mention this, I was concidering an Ambasador Pass for
myself this year, but now I’m not so sure it’s worth it. I remember when Marine
World was sold to Six Flags. It lost most it’s charm and became a Magic Mtn
clone.
Mat
|
|
| |
In lugnet.lego, Ted Michon wrote:
| |
Spinning off the parks, or selling them outright, sounds ominous. It suggests
a level of distress calling for drastic measures. I cannot imagine TLC
divesting LL Billund because it’s so close, physically and emotionally, to
the heart of the company and its history. But I could see LLCA gone in a
hearbeat -- it’s a small kid theme park in very competitive market.
Personally, that’s very sad. My wife and I just bought Ambassador passes only
a few weeks ago. We aren’t interested in LLCA as a theme park, but as a link
to TLC.
|
IMHO selling the LL parks to an outside company is just beyond stupid. I mean
HELLO - this is LEGOland. This is not some generic theme park where it does not
really matter who is running it - I don’t want to see LLCA run by some random
company. What happens to THE major thing that keeps me buying year passes - the
LL exclusive items, the S@H only sets at the parks - the things like the Classic
Space hat that only LLCA has? What happens to those?
I would not mind seeing a new division within Lego to just run the parks - I
think THAT is what the problem is they seem to be forgotten (noting the NUMEROUS
broken parts within the attractions) and a division that has the sole
responsibility of keeping the parks up would be the way to go. There may be one
of them now, I am not sure - but if there is they need to do a better job.
I go to Legoland to go to LEGOland, not Legoland brought to you by Pepsi.
Mark P
http://www.promobricks.com
x-fut this part to .legoland
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|
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In lugnet.lego, Mark Papenfuss wrote:
| |
In lugnet.lego, Ted Michon wrote:
| |
Spinning off the parks, or selling them outright, sounds ominous. >
|
|
| |
I would not mind seeing a new division within Lego to just run the parks - I
think THAT is what the problem is they seem to be forgotten (noting the
NUMEROUS broken parts within the attractions) and a division that has the
sole responsibility of keeping the parks up would be the way to go. There may
be one of them now, I am not sure - but if there is they need to do a better
job.
|
I have some strong negative feelings about Legoland CA. I drove my kids (15
hours) specifically to visit Legoland (CA) and we were all looking forward to
the experience. I have visited numerous parks in my 42 years and I must say
Legoland was the worst park/ and experience I have ever had.
As Mark mentioned above I found numerous items broken. I was appalled at the
number of displays that were broken and filthy. Handsel and Gretel had so many
cobwebs and spiders on them it scared my 4 year old. The park in general was
dirty, bordering on filthy. This includes building walls, rides, displays and
trash around the park. (we were there at the opening and it was a really slow
day for the park).
The employees were collectively the most appethetic uncaring group of employees
I have ever come across. Most (9 out of 10) employees acted bored, were ignorant
about their own park and basically did not appear to care about their job or
park. For instance I wanted to get a mosaic of each of my two boys. I had three
separate employees send me to three separate different parts of the park ( and I
mean ALL over the park) and they were ALL wrong. One employee had never heard of
the mosaic but he atleast called administration(?) on a park phone. They
insisted the mosaic was in the Technic ride area. I mentioned that the Technic
ride was closed and that it did not make sense that it was there, they (admin)
insisted they were correct. (they weren’t) I finally gave up trying to find the
mosaic.
I waited 5 minutes at a small shop in the Knights Kingdom area to pay for a
shield and sword for my son. The cashier was having an intense conversation with
her boyfriend about her personal life. Her boyfirend finally left and she then
waited on me. (I timed the gal and I was standing right in front of her, the
boyfriend was standing next to me)
The special fee charged for my 4 year old to brush dirt away in the dino dig
area was down right insulting!
I could go on and on, but I will stop with the negative.
Positive
I did manage to find a few good employees. They guys running the Fire Station
ride were enthusiastic and gave my boys and I a thoroughly enjoyable experience.
These guys were just as enthusiastic at 10 AM as the were at 4 PM.
Some of the rides were fun and different.
Miniland had some great models and we really enjoyed looking at the models,
however this is an area where many, many things were broken.
The most insulting experieince we had was an encounter with the park model
builders. There were two builders and boy and an older woman. The boy was fairly
new but he expressed extreme graditude for his job and he tried hard to talk
with us. The woman was sarcastic and actually had the gall to complain about her
job and how building the NASCAR signs was soooo hard and she didn’t like it. No
one should complain about a model building job!
Maybe new management would improve the park. The current management is doing a
poor job!
Rose
BTW I was just at the Park, September 24, 2004.
|
|
| |
Much snippage. And I mostly agree with Ray...
In lugnet.lego, Ray Sanders wrote:
> In lugnet.lego, Larry Pieniazek wrote:
> > As I have opined many many times here and elsewhere, supply chain management,
> > product lifecycle management, accurate and geography specific demand
> > forecasting, and nimble reaction to changes in demand are absolutely vital in
> > todays day and age.
>
> Absolutely agree.
>
> > I'd opine that LEGO *still* doesn't have this right. Third supply chain VP in a
> > year, acknowledgement of supply chain problems, acknowledgement of overcapacity
> > coupled with inability to meet demand... not good. Lots of room for improvement.
>
> I'm not sure how much of the problem is a 'TLC supply chain issue' tho.
Supply chains stretch in both directions from a firm, both upstream and down.
TLC's upstream supply chain presumably delivers stuff like raw pellets (in
various colors), printed boxes and instructions, and manufacturing related
supplies, among other things.
I think there's an upstream problem. Not a big one, but a problem. It centers,
in my uninformed opinion, around lead times for pellets.
There is also an internal or midstream supply chain. Bricks have to get from
where they are molded to where the sets are packed, and sets have to get from
where they are packed to the distribution centers, prior to going to retailer
channels. Which bricks need to move where depends on accurate demand
forecasting.
I think there's a HUGE midstream problem, LEGO tried to handle it by moving all
manufacturing closer together. But I think that misses the point.... and that's
what I refer to regarding closing Enfield molding and packing. NA is the largest
market for LEGO. Other European and Japanese manufacturers have moved
manufacturing here in order to respond quicker. Granted unless Enfield molded
every kind of element, there would still be supply chain tangles when a certain
element wasn't on hand, but I think closing Enfield may go down as a bad
decision. I may be wrong. I'm on the outside looking in.
You're focusing on the downstream part and I won't argue that part. BUT....
Assuming they are not channel stuffing, that's not where the problem is. (that's
not to say I disagree with your analysis of retailing flaws)
> Perhaps
> it is in EU where the supplier is more closely coupled with the retail outlets.
> On this side of the pond I have seen much LEGO product that a particular
> ratailer could have sold (at full retail) had they merely market shifted it to a
> different market where it would sell better. Perhaps that would actually cost
> more than just clearancing it where it sits. If anything, retailers (like WM
> mentioned below) should perhaps keep more of the product warehoused and dispatch
> it to the stores more quickly as it sells-through in the store. I think that is
> some of what the article (mentioned below) alludes to. The existing model seems
> to be a 'high speed dispatch' from Enfield to the retailers warehouses to the
> actual stores (where it gets effectively warehoused until finally disposed of).
>
> In the case of TRU, they will shift stuff from one store to another (typically
> at a customer's request), but the logistics causes the transfer to take anywhere
> from 6-10 weeks (which is not acceptable for most customers).
> > Consider this from a recent Information Week:
> >
> > (it's a long article about various Walmart IT initiatives, a really good read if
> > you care about this stuff even if IW is a free magazine)
> >
> > http://www.informationweek.com/story/showArticle.jhtml?articleID=47902662
>
> Yes, most interesting article. I read that when it was /.'ed a week or two back.
>
> Ray
|
|
| |
In lugnet.lego, Jake McKee wrote:
| |
In lugnet.lego, Marc Nelson, Jr. wrote:
| |
Wow, the new CEO is only
35 years old - he was 8 or 9 when Space came out!
|
Yeah, he’s a sharp cat. As I understand, Kjeld is stepping down as planned
(he came back into the daily operations fold to help get things back on
track). Now that the Action Plan is in place and seems to be working, he’s
turning over daily operations his hand picked successor.
Jake
---
Jake McKee
Community Liaison
LEGO Community Development
|
Jake,
Looking at the organizational chart, wouldn’t “stepping up” be a more
appropriate term, as he is leaving the CEO position but remaining Deputy
Chairman?
-Brian
|
|
| |
In lugnet.lego, Arne Lykke Nielsen wrote:
Snip
> Follow-up: In the Danish TV News, in two interviews,
> the new CEO said, that most of the production would probably be moved to China
> (where Click-its and many parts are already made)
Snip
> Arne, Copenhagen
well, i weathered the color change, & lego ultra-juniorization/B.U.R.P etc.
garbage, but this might break it for me. Lego, you darn well better absolutely
NOT use slave labor & conditions!!!! (although that's probably what they're
counting on to cut costs by going to china. I don't wanna hear about poor
abused children being forced into making one of the best toys invented FOR
children. way to go Lego, you really tick me off.
Jeff
|
|
| |
Maybe they’ll sell it to Disney. They would fix it.
|
|
| |
In lugnet.lego, Arne Lykke Nielsen wrote:
> Hi,
>
> Just noticed this press release:
>
> http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=12504&countrycode=2057
>
> Kjeld Kirk Kristiansen retires, and LEGOLAND parks will be a seperate company,
> after new losses this year.
>
> Arne, Copenhagen
i read the news today, oh boy
about a lego man who lost his job
and though the news was rather sad
well i just had to laugh
i saw the photograph
he blew his resources on bionicles
while mega bloks had just released na-no
a crowd on lugnet came and saw
they'd seen his face before
nobody was really sure if he was the boy on the town plan
i'd love to build with bricks....
--
Thomas Main
thomasmain@myrealbox.com
|
|
| |
In lugnet.lego, Jeff Szklennik wrote:
> In lugnet.lego, Arne Lykke Nielsen wrote:
>
> Snip
>
> > Follow-up: In the Danish TV News, in two interviews,
> > the new CEO said, that most of the production would probably be moved to China
> > (where Click-its and many parts are already made)
>
> Snip
>
> > Arne, Copenhagen
>
> well, i weathered the color change, & lego ultra-juniorization/B.U.R.P etc.
> garbage, but this might break it for me. Lego, you darn well better absolutely
> NOT use slave labor & conditions!!!! (although that's probably what they're
> counting on to cut costs by going to china. I don't wanna hear about poor
> abused children being forced into making one of the best toys invented FOR
> children. way to go Lego, you really tick me off.
>
> Jeff
Yes all that and now the possibity that MegaBlocks and Lego being made in the
same manufacturing plant. They'll just take the better ones and put them in the
"Lego" bin with the poorer ones going to the other knock offs.
-Patrick
|
|
| |
In lugnet.lego, Patrick S. O'Donnell wrote:
> In lugnet.lego, Jeff Szklennik wrote:
> > In lugnet.lego, Arne Lykke Nielsen wrote:
> >
> > Snip
> >
> > > Follow-up: In the Danish TV News, in two interviews,
> > > the new CEO said, that most of the production would probably be moved to China
> > > (where Click-its and many parts are already made)
> >
> > Snip
> >
> > > Arne, Copenhagen
> >
> > well, i weathered the color change, & lego ultra-juniorization/B.U.R.P etc.
> > garbage, but this might break it for me. Lego, you darn well better absolutely
> > NOT use slave labor & conditions!!!! (although that's probably what they're
> > counting on to cut costs by going to china. I don't wanna hear about poor
> > abused children being forced into making one of the best toys invented FOR
> > children. way to go Lego, you really tick me off.
> >
> > Jeff
>
> Yes all that and now the possibity that MegaBlocks and Lego being made in the
> same manufacturing plant. They'll just take the better ones and put them in the
> "Lego" bin with the poorer ones going to the other knock offs.
>
> -Patrick
I'm just shocked...I can't even begin to say what this means to me....other than
I guess the market for old Lego collections will just continue to go through the
roof. <sigh>
When will it ever end?
|
|
| |
In lugnet.lego, Thomas Main wrote:
> In lugnet.lego, Arne Lykke Nielsen wrote:
> > Hi,
> >
> > Just noticed this press release:
> >
> > http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=12504&countrycode=2057
> >
> > Kjeld Kirk Kristiansen retires, and LEGOLAND parks will be a seperate company,
> > after new losses this year.
> >
> > Arne, Copenhagen
>
> i read the news today, oh boy
> about a lego man who lost his job
>
> and though the news was rather sad
>
> well i just had to laugh
> i saw the photograph
>
> he blew his resources on bionicles
> while mega bloks had just released na-no
>
> a crowd on lugnet came and saw
> they'd seen his face before
>
> nobody was really sure if he was the boy on the town plan
>
> i'd love to build with bricks....
>
> --
> Thomas Main
> thomasmain@myrealbox.com
Good one Thomas,
That really cracked me up. Now I know I'm showing my age here, but I have to
wonder, how many ppl actually sang that to themselves instead of reading it???
Apparently the creativity around here is not just limited to building.
Janey "Red Brick"
|
|
| |
In lugnet.lego, Timothy Wade wrote:
| |
In lugnet.lego, Patrick S. O’Donnell wrote:
| |
In lugnet.lego, Jeff Szklennik wrote:
| |
In lugnet.lego, Arne Lykke Nielsen wrote:
Snip
| |
Follow-up: In the Danish TV News, in two interviews,
the new CEO said, that most of the production would probably be moved to
China (where Click-its and many parts are already made)
|
Snip
well, i weathered the color change, & lego ultra-juniorization/B.U.R.P etc.
garbage, but this might break it for me. Lego, you darn well better
absolutely NOT use slave labor & conditions!!!! (although that’s probably
what they’re counting on to cut costs by going to china. I don’t wanna hear
about poor abused children being forced into making one of the best toys
invented FOR children. way to go Lego, you really tick me off.
Jeff
|
Yes all that and now the possibity that MegaBlocks and Lego being made in the
same manufacturing plant. They’ll just take the better ones and put them in
the “Lego” bin with the poorer ones going to the other knock offs.
-Patrick
|
I’m just shocked...I can’t even begin to say what this means to me....other
than I guess the market for old Lego collections will just continue to go
through the roof. sigh
When will it ever end?
|
As sad (wrong depending on how ones sees it) as it may sound that TLC is moving
production to China it *IS* the way of this century. Expect to see a lot of
this occuring for the rest of our lifetime! 1st world countries *CAN NOT*
compete against the wages of those countries. That is off coruse the way of
capitalism. I’m not saying it is wrong, that is just the way it is.
Case in point, today on Nationa Public Radio they had a segment of the DRUG
ROUTES. Basically colombia drug lords are now using the central american
corridor to bring drugs up to the USA. Nobody stops them (governments, local
police, the people) becuase if a fisherman who earns $10 per week “help”
transport some drugs from one port to the next he gets a $1,000.00 “reward”.
With that amount of money his family is set for the year!
It is disparelty of wealth that allowed “cheap labor” to grown in certain areas
of the world. So don’t blame TLC for going where everyone else is going. If
they don’t they won’t be competitive and if they can not be competeive then say
good bye to TLC!
You and I and everyone else on this board don’t have the power to change the way
stuff is so don’t bother. Just be happy that TLC is doing things (which you amy
not agree on) to keep itself alive and making the brick.
You know kids todays are not into the brick as we were. Yes it has it’s
following but the brick in the US can’t really compete against the SONY
Playstations... =)
-AHui
A&M LWorks
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In lugnet.lego, Thomas Main wrote:
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he blew his resources on bionicles
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Yup, it’s a darn shame that he put money into a non-licensed product that so
took the world by storm that while it was still fairly obscure it ranked as the
top selling ACTION FIGURE line (beating Star Wars, Power Rangers, etc.),
all by itself, with no help from any other more “pure” LEGO theme. Yeah, it’s
too bad that they’re pulling in so much profit on one theme, and that it’s
proved to be a marketable enough property that they can make money on
licensing fees from other companies, rather than the other way around.
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while mega bloks had just released na-no
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Yeah, they did, and it’s a cute concept (one that probably won’t get them sued,
either), but I stand by my position that the 1:1 height/width ratio is going to
prove to be a severe limiter on construction possibilities. Any hardcore
Schliem fan can tell you how useful it is to be able to pull off minor offsets
that are only possible because of the 6:5 height/width ratio.
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as sad (wrong depending on how ones sees it) as it may sound that TLC is
moving production to China it *IS* the way of this century. Expect to see
a lot of this occuring for the rest of our lifetime! 1st world countries
*CAN NOT* compete against the wages of those countries. That is off coruse
the way of capitalism. I’m not saying it is wrong, that is just the way it
is.
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Actually, I don’t think it will save them much at all. Sea transport will now
be across the atlantic, they have built the factories in Hungary, have the ones
in Bulland (sp), ect. Cost to run the actual factories is relatively low in
terms of personel. IIRC, when Enfield was closed, it used 1 person to run 34
molding machines. They would use more people where the molds are changed more
often, but not many more. Probably not more than 3-4 people on the floor of the
molding shop at a time. Having seen the packing display at LLCA, I would
suspect a similar level of supervision amongst the packing machines. Meaning
that the total on the floor people in a plant is like 8-10 at a time, plus
service people. (Probably another 8-10 people). Given a 1 min mold cycle, and
8 pieces a mold, that gives you:
8x34x60x8 (one shift)
=130560 bricks
To cover the cost of the employees. I’d suspect that the shot time is rather
less than a min for most elements. I’d also think that given inteligent design,
those numbers have come down rather than gone up. The press release talks of
overcapacity, not undercapacity.
Lego is a capital intensive operation, rather than a labour intensive one.
Maximizes advantages of working in 1st world, minimizes advantages of 3rd world.
James Powell
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I sang to it, one of the best songs on Sgt. Pepper.
--- Member 1893
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> Follow-up: In the Danish TV News, in two interviews,
> the new CEO said, that most of the production would probably be moved to China
> (where Click-its and many parts are already made)
That's right, those 12 people in the production facility are what led you to two
consecutive years of heavy losses.
I swear, this world is being ruined by the decisions of MBAs and accountants who
have no natural talent for their occupation, let alone their industry.
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In lugnet.lego, Jeff Szklennik wrote:
> Lego, you darn well better absolutely
> NOT use slave labor & conditions!!!! (although that's probably what they're
> counting on to cut costs by going to china. I don't wanna hear about poor
> abused children being forced into making one of the best toys invented FOR
> children. way to go Lego, you really tick me off.
That is some rather ignorant ranting. Why would you expect those single kids,
spoiled by two parents and four grand parents, would be forced to work? And
what is this "slave labor"? Some cold war garbage?
Yes you really tick me off too.
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In lugnet.lego, Arne Lykke Nielsen wrote:
> Hi,
>
> Just noticed this press release:
>
> http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=12504&countrycode=2057
>
> Kjeld Kirk Kristiansen retires, and LEGOLAND parks will be a seperate company,
> after new losses this year.
> > Follow-up: In the Danish TV News, in two interviews,
> > the new CEO said, that most of the production would probably be moved to
> > China (where Click-its and many parts are already made)
> > and KKK said that the trouble for LEGO was that they had focused too much
> > on growth, and had becomed too dependant on licensed products, as opposed
> > to the basic brick !!!! and furthermore it was mentioned, that KKK will
> > give 800 mill DKr (appx 140 mill US dollars) of his own personal fortune to
> > TLC. Arne, Copenhagen
Could some one clarify, didn't TLG plan-on, or already move some production/
warehouse facilities to Eastern Europe to cut-costs?!?
Anyways, i'm betting quality standards will slip in China...
(i know, this nation is making better products daily, but i
simply expect more from Lego...perhaps i shouldn't, but i do)
Good cars are still made in Germany, BMW can attest...
Can't Lego retain its production in Europe, and still be profitable.
Quantity over quality is gonna be TLG's new motto.
What happened to those efficient Danish manufacturing plants, or are they gonna
ship the machinery over to China and utilize their labour intensive slave system
to churn out the bricks.
I hope some under-cover reporter does an investigative report on Lego in China
in five years and reports a scandal...would serve them right.
Isn't TLG the #1 major industry in Denmark... what will happen to the countries
GDP...the Nation should subsidize TLG as a protected-national-corporation and
work with them!
Man this sucks...
I mean, how much good can come of this?
Cheaper bricks!?!
Yup, both in price and in product!
!Just wow,
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In lugnet.lego, Ka-On Lee wrote:
> In lugnet.lego, Jeff Szklennik wrote:
> > Lego, you darn well better absolutely
> > NOT use slave labor & conditions!!!! (although that's probably what they're
> > counting on to cut costs by going to china. I don't wanna hear about poor
> > abused children being forced into making one of the best toys invented FOR
> > children. way to go Lego, you really tick me off.
>
> That is some rather ignorant ranting. Why would you expect those single kids,
> spoiled by two parents and four grand parents, would be forced to work? And
> what is this "slave labor"? Some cold war garbage?
>
> Yes you really tick me off too.
Riiiiiiiiiiiiight, and the majority of China's factory labor force is
upper-middle class, university educated!?!
Bad factory environments exist in much of the Global South, and China in no
exception! Some generalizations are valid, simply because they still apply.
Peace,
--==Richard==--
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In lugnet.lego, Richard Noeckel wrote:
> In lugnet.lego, Arne Lykke Nielsen wrote:
> > Just noticed this press release:
> >
> > http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=12504&countrycode=2057
> >
> > Kjeld Kirk Kristiansen retires, and LEGOLAND parks will be a seperate
> > > Follow-up: In the Danish TV News, in two interviews,
> > > the new CEO said, that most of the production would
> > > probably be moved to China
>
> Could some one clarify, didn't TLG plan-on, or already move some production/
> warehouse facilities to Eastern Europe to cut-costs?!?
>
> Anyways, i'm betting quality standards will slip in China...
> (i know, this nation is making better products daily, but i
> simply expect more from Lego...perhaps i shouldn't, but i do)
> Good cars are still made in Germany, BMW can attest...
> Can't Lego retain its production in Europe, and still be profitable.
> Quantity over quality is gonna be TLG's new motto.
> What happened to those efficient Danish manufacturing plants, or are they gonna
> ship the machinery over to China and utilize their labour intensive slave system
> to churn out the bricks.
>
> I hope some under-cover reporter does an investigative report on Lego in China
> in five years and reports a scandal...would serve them right.
>
> Isn't TLG the #1 major industry in Denmark... what will happen to the countries
> GDP...the Nation should subsidize TLG as a protected-national-corporation and
> work with them!
>
> Man this sucks...
> I mean, how much good can come of this?
> Cheaper bricks!?!
> Yup, both in price and in product!
>
> !Just wow,
I got so worked up that i forgot to sign my name at the bottom of this post!
Oh, and just for Ka-On Lee, i only meant "labor intensive slave system" in terms
relative to the developed western nations ideology towards humane treatment of
industry workers.
Signing-off,
--==Richard==--
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Snipped a lot of the post because I see much of it has been covered by others
already.
In lugnet.lego, Richard Noeckel wrote:
> Isn't TLG the #1 major industry in Denmark... what will happen to the countries
> GDP...the Nation should subsidize TLG as a protected-national-corporation and
> work with them!
ONE good thing about the EU is that this sort of anti-competitive chicanery is
against EU rules. And sometimes the EU even actually does something about it.
Why? Because it's a terrifically dumb idea.
So no, Denmark SHOULDN'T subsidise TLG.
XFUT .debate
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In lugnet.lego, Ka-On Lee wrote:
> In lugnet.lego, Jeff Szklennik wrote:
> > Lego, you darn well better absolutely
> > NOT use slave labor & conditions!!!! (although that's probably what they're
> > counting on to cut costs by going to china. I don't wanna hear about poor
> > abused children being forced into making one of the best toys invented FOR
> > children. way to go Lego, you really tick me off.
>
> That is some rather ignorant ranting. Why would you expect those single kids,
> spoiled by two parents and four grand parents, would be forced to work? And
> what is this "slave labor"? Some cold war garbage?
>
> Yes you really tick me off too.
Just to think about how we're (USA) going to support the baby boom generation in
retirement and that there are four times as many humans in China with little in
the way of future generations to support those. Of course their family
structure is different than ours most likely. Still with 1,200,000,000 people
there I would too find it hard to believe slave labor does not exist. Someday I
hope to find out for myself first hand - inspired by this RUSH song.
-Patrick
Tai Shan
High on the sacred mountain
Up the seven thousand stairs
In the golden light of autumn
There was magic in the air
The clouds surrounded the summit
The wind blew strong and cold
Among the silent temples
And the writing carved in gold
Somewhere in my instincts
The primitive took hold.
I stood at the top of the mountain
And China sang to me
In the peaceful haze of harvest time
A song of eternity
If you raise your hands to heaven
You will live a hundred years
I stood there like a mystic
Lost in the atmosphere
The clouds were suddenly parted
For a moment I could see
The patterns of the landscape
Reaching to the eastern sea
I looked upon a presence
Spanning forty centuries.
I stood at the top of the mountain
And China sang to me
In the peaceful haze of harvest time
A song of eternity
I thought of time and distance
The hardships of history
I heard the hope and the hunger
When China sang to me...
When China sang to me.
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> Follow-up: In the Danish TV News, in two interviews,
> the new CEO said, that most of the production would probably be moved to China
> (where Click-its and many parts are already made)
> and
> KKK said that the trouble for LEGO was that they had focused too much on growth,
I've worked with China before. I hate dealing with them. They wanted me to do
all this work, then trying to get paid was like squeezing blood from a stone.
Took me six months to get paid. Chinese people are smart--but I have found a
rather unethical culture exists there. It was pretty intense--it went up the
chain of command pretty quick--I had someone about two-three levels below the
CEO of company demanding payment from the China teams.
Didn't Lego win a lawsuit regarding patent/design infringement some time ago?
From what I've read, it's an ongoing thing that Lego keeps fighting Asian
knockoffs...and yet...they want to move more to Asia? Doesn't this mean more
lawyers need to be employed...and doesn't that make operations more capital
intensive?
It is my personal opinion that Chinese business culture is that they
(manufacturing operation/company) agree to one thing and sign contracts, but are
highly willing to sell that stuff out the back door when nobody is looking.
That's when you see how smart they are--because they are very sneaky about not
getting caught. I need to start documenting every time I see things like that
in the news. I recall reading an article one time where a Hollywood movie
studio had a problem with a Chinese company that made the films to be
distributed to theaters, and were allegedly selling prints in China without
studio permission.
Sorry I have a personal bias against China, but the bias comes as a result of
dealing directly with them--their business culture needs to change to a more
business ethical-based culture before I will change my opinion of doing business
in China.
(The views expressed above do not represent the views of either of my employers)
Scott Lyttle
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> well, i weathered the color change, & lego ultra-juniorization/B.U.R.P etc.
> garbage, but this might break it for me. Lego, you darn well better absolutely
> NOT use slave labor & conditions!!!! (although that's probably what they're
> counting on to cut costs by going to china. I don't wanna hear about poor
> abused children being forced into making one of the best toys invented FOR
> children. way to go Lego, you really tick me off.
I would like to see exactly how much more expensive per anum to make the
stuff in Denmark than it is to make it in China.
And what the extra expense is going towards (taxes? wages? electricity
costs? what?)
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In lugnet.lego, Erik Olson wrote:
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Maybe they’ll sell it to Disney. They would fix it.
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Um, have you seen some of the Disney theme parks as of late? This would be a
poor idea. Outsourcing parks like Legoland isn’t a bad idea, if you pick the
right company to run them. Six Flags = Bad. However, all of Disney’s Tokyo parks
are actually owned by the Oriental Land Company, and they are considered some of
the best run theme parks on the planet. But more likely than not, Legoland will
get shafted.
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In lugnet.lego, Ted Michon wrote:
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Spinning off the parks, or selling them outright, sounds ominous. It suggests
a level of distress calling for drastic measures. I cannot imagine TLC
divesting LL Billund because it’s so close, physically and emotionally, to
the heart of the company and its history. But I could see LLCA gone in a
hearbeat -- it’s a small kid theme park in very competitive market.
Personally, that’s very sad. My wife and I just bought Ambassador passes only
a few weeks ago. We aren’t interested in LLCA as a theme park, but as a link
to TLC.
If I were taking LEGO back to basics (the recurring theme of the past 12
years), I would still want to push the Brand Retail concept in areas were it
could be combined with multi-acre Minilands and special event centers. LEGO
knows how to build bricks better than anyone else, but competing to make the
better rollercoaster is a different ballgame.
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I think they’d have better spent the money on LEGO stores throughought the US.
I think stores where you can “pick a brick” would do much to increase sales.
More widespread “pick a brick” sales could be part of an overall strategy to
make TLC more nimble and better able to respond to changes in demand. If demand
for new sets changes and they’re left with some pieces that won’t make it into
sets, just send them to all of the “pick a brick” stores and get rid of them.
Jeff
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In lugnet.lego, David Laswell wrote:
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In lugnet.lego, Thomas Main wrote:
| |
he blew his resources on bionicles
|
Yup, it’s a darn shame that he put money into a non-licensed product that so
took the world by storm that while it was still fairly obscure it ranked as
the top selling ACTION FIGURE line (beating Star Wars, Power Rangers,
etc.), all by itself, with no help from any other more “pure” LEGO theme.
Yeah, it’s too bad that they’re pulling in so much profit on one theme, and
that it’s proved to be a marketable enough property that they can make
money on licensing fees from other companies, rather than the other way
around.
|
Well, I meant that as a joke. I am aware that Bionicle is extremely sucessful.
But your post did get me to thinking. Bionicle is such a strong brand by itself
that as long as TLC is looking to sell properties to (I assume) raise
cash...Bionicle would be a heck of a choice :P
--
Thomas Main
thomasmain@myrealbox.com
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In lugnet.lego, Adrian Egli wrote:
> In lugnet.lego, Arne Lykke Nielsen wrote:
> > Hi,
> >
> > Just noticed this press release:
> >
> > http://www.lego.com/eng/info/default.asp?page=pressdetail&contentid=12504&countrycode=2057
> >
> > Kjeld Kirk Kristiansen retires, and LEGOLAND parks will be a seperate company,
> > after new losses this year.
> >
> > Arne, Copenhagen
>
> Local news has gotten the story-
>
> http://www.signonsandiego.com/uniontrib/20041022/news_1b22lego.html
>
> Adr.
I thought this part of the article was completely off base:
Dennis Speigel, president of International Theme Park Services,
a consulting firm, said Legoland has a high-quality product but
it appeals to a limited segment of the population: families with
small children.
"People have always had a good experience there," Speigel said.
"It is a very narrow demographic. It does not appeal to teenagers
or adults."
My guess is that this statement is based simply on data on the ages of visitors
to Legoland. and does not take into account the background of the parents.
My guess is that families who go to Legoland have at least one parent who is an
AFOL, or at the very lest, has fond memories of playing with LEGO as a child.
I'd like to know how many "families with young children" have at least one
parent who played with LEGO as a child.
My guess is that yes Legoland does appeal to a limited segment of the
population. It appeals to parents who loved playing with LEGO as a child.
Jeff
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In lugnet.lego, James Powell wrote:
| |
Meaning that the total on the floor people in a plant is
like 8-10 at a time, plus service people. (Probably another 8-10 people).
Given a 1 min mold cycle, and 8 pieces a mold, that gives you:
|
Supposedly, it’s around 7 seconds to cool and eject a new element from the mold
(obviously differs according to piece size, etc). So if you count injection
time, it’s probably around 10 seconds or so? And I believe the number of
elements produced per year is supposedly about 20 billion? Hmm. How many parts
get squeezed off in a single mold? I know I’ve seen 2x4 molds that have 8 parts,
let’s go with that for starters.
That’d be 6,944,444 hours per machine per year meaning roughly 800 molding
machines going non-stop, not including time to switch molds and to switch color
batches. So assuming 2 people per 30 machines (adding 1 to help fudge the
mold/color switching) that’s about 27 people (let’s say 30) at any given time at
the plant. Assuming 4 shifts of full-time people, that’s a total crew of 120,
probably more, plus other staff for the facility itself (executive, security,
janitorial, etc).
So, maybe a ~200 person operation all told? That sound reasonable? No clue what
wages are in Denmark vs. China-- but at a guess we’re probably talking about $5
to $15 million in Denmark, and maybe half that in China? But that’s just a
pulled-out-of-my-ABS kind of guess.
| |
Lego is a capital intensive operation, rather than a labour intensive one.
Maximizes advantages of working in 1st world, minimizes advantages of 3rd
world.
|
From what I’ve heard, Lego sounds sort of top-heavy. Probably part of why
MegaBloks can compete so well-- a top-heavy company has lots of executive chains
and processes to go through to get a final product. And Lego’s attention to
detail and struggle to be “the best” only make it slower. MegaBloks by
comparison probably has a MUCH faster turnaround time for new products, and less
attention to quality, which is (I’d guess) where the REAL savings are.
DaveE
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In lugnet.lego, Jeff Findley wrote:
| |
I think they’d have better spent the money on LEGO stores throughought the
US. I think stores where you can “pick a brick” would do much to increase
sales.
|
I don’t know. It would nice to have one closer to Detroit, but there’s also the
overhead of operating a bunch of physical stores. What are people’s impressions
as to the success of these new stores?
I do think that PAB is a nice low investment way of enhancing the in-store
shopping experience and for helping to motivate core sales, although I don’t
feel it’s there to directly generate sizable revenue. My experience with the PAB
wall has varied widely - from an almost madhouse free-for-all in Orlando to
practically listening to crickets chirp in Schaumburg.
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More widespread “pick a brick” sales could be part of an overall strategy to
make TLC more nimble and better able to respond to changes in demand. If
demand for new sets changes and they’re left with some pieces that won’t make
it into sets, just send them to all of the “pick a brick” stores and get rid
of them.
|
How well that works might depend on the type of piece in question and the costs
of adding it to the mix, as PAB seems to run best with a core palette of
basic/highly versatile parts with a few specialized pieces thrown in. If the
demand for a set fell far short of projections, I’d imagine recouping left over
loose inventory wouldn’t do much to offset manufacturing, marketing, R&D, etc
losses.
There is always the K8 option too.
Spencer
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In lugnet.lego, Jeff Findley wrote:
| |
... I think stores where you can “pick a brick” would do much to increase
sales.
|
I’ve spent a lot of time at Pick-A-Bricks (LLCA, DDT Anaheim, Glendale Galleria)
and my observations suggest they are great for us, but not the average customer.
My eperiences is that the average visitor says “wow” when they see all the
items, but in the end buys nothing. The next most common customer fills a bag at
a PAB by weight and has it weighed, realizes it’s way too expensive, and quietly
stashes the bag someplace to avoid having to sort it back into bins.
I recall one day at DDT where 4 of us spent 3 hours packing large cups. About 20
people came by with the “wows” and not one of them bought any bricks.
-Ted
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In lugnet.lego, Jeff Findley wrote:
> I thought this part of the article was completely off base:
>
> Dennis Speigel, president of International Theme Park Services,
> a consulting firm, said Legoland has a high-quality product but
> it appeals to a limited segment of the population: families with
> small children.
>
>
> "People have always had a good experience there," Speigel said.
> "It is a very narrow demographic. It does not appeal to teenagers
> or adults."
>
> My guess is that this statement is based simply on data on the ages of
> visitors to Legoland. and does not take into account the background of the
> parents.
>
> My guess is that families who go to Legoland have at least one parent who is
> an AFOL, or at the very lest, has fond memories of playing with LEGO as a
> child. I'd like to know how many "families with young children" have at least
> one parent who played with LEGO as a child.
Is the article off-base, or just not specific? I mean, it sounds completely
accurate to me.
Most kids who grew up in the 70's and 80's in the US (who are becoming parents
now) had some experience with Lego. As a kid, almost everyone I knew had *SOME*
Lego. Maybe only a set or two, but nevertheless it was pretty much a universal
toy. Hence, it's sort of irrelevant.
But my guess is also that the crowd it attracts is parents with small children
who PLAY with Lego. If your kid isn't a Lego fan, they're not dying to go off to
LegoLand, and unless as a parent you're trying to urge your child INTO playing
with Lego, why take them to LegoLand versus some other park and/or museum?
Plus, LegoLand sounds like a gigantic advertisement; but moreso understood (I'd
guess) than, say, DisneyLand. I think people nowadays think of DisneyLand not as
much as an advertisement for Disney products, but as an amusement park. I mean,
think about the impression you'd have if they came out with HotWheelLand or
something. Just sounds to a casual observer more like a "Buy our products!"
ploy. And parents often avoid things that only encourage their kids to want
more-- especially when it's an expensive product like Lego.
The downfall of LegoLand is just as the article claims-- it misses out on the
demographics that matter most: older kids, teenagers, and adults without kids.
Those are HUGE demographics. Attracting parents with kids is more of a
small-timey operation. Like a children's museum or something. Not an entire
theme park. To be successful, LegoLand's got to broaden its appeal, or shrink
its scale.
DaveE
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In lugnet.lego, David Eaton wrote:
> Is the article off-base, or just not specific? I mean, it sounds completely
> accurate to me.
I'd have to agree there.
> But my guess is also that the crowd it attracts is parents with small
> children who PLAY with Lego. If your kid isn't a Lego fan, they're not dying
> to go off to LegoLand, and unless as a parent you're trying to urge your
> child INTO playing with Lego, why take them to LegoLand versus some other
> park and/or museum?
That's possibly a big problem with their location. Firstly, they're in
California, one of the two biggest concentrations of amusement parks in the
nation, along with FloriDisney World. Secondly, they're not right next door to
any of the major theme parks. That hurts them twice right off the bat. If
you're an average person on a short vacation to California, you're probably
going to put Disneyland, Universal Studios: Hollywood, and SeaWorld at the top
of your theme park list, and they're all close enough that you could get a
single hotel room and visit each of them in three consecutive days. LEGOLAND is
far enough off the beaten path that you'll probably need to switch hotel rooms,
and unless you're doing both amusement parks and nature parks in the same trip,
and you want to stop by the Carlsbad Caverns, you'll probably skip it. Parents
with little kids might actually prefer it to Disneyland because it's probably
got a much slower pace and you won't have to be scouring the park for things to
do that don't involve standing next to a height gauge...but the vast majority of
kids are going to push for Disneyland before all else. Local residents can be
counted on to pick up annual passes, but that's because annual park passes are
usually killer deals, where a regular visitor is only paying a few bucks for
admission, plus receiving a number of free Guest Passes to hand out to visiting
friends/family, and when you're able to attend whenever you have a few free
hours, there's less incentive to stay and buy park-priced food.
> The downfall of LegoLand is just as the article claims-- it misses out on the
> demographics that matter most: older kids, teenagers, and adults without
> kids. Those are HUGE demographics.
Not only that, but they're often less spend-thrifty. Teens often have part-time
jobs and no bills to pay. All other things being equal, a childless couple will
have a lot more free spending cash than a similar couple with even a single
child, much less 2-3. And the more likely they are to do repeat visits.
Anyways, the part of this article that I found most interesting is that The LEGO
Company could very well end up selling off the LEGOLAND parks to the very same
family holding company that the Christiensen family set up to own them. In
other words, the parks would be spun off into an independant company that would
have to stand or fail on its own (and wouldn't be affecting the bottom line for
the main LEGO Company), but they'd still be part of the compined LEGO family.
That should be a lot more bearable for hard-core FOLs who don't want to see it
handed off to a company that doesn't care about the Brick very much, and might
turn the bulk of what people like about LEGOLAND into a backlot side attraction,
while filling the bulk of the park with rides that have nothing to do with LEGO
bricks.
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In lugnet.off-topic.debate, Richard Noeckel wrote:
> Riiiiiiiiiiiiight, and the majority of China's factory labor force is
> upper-middle class, university educated!?!
No, but they've learned a lot over recent years. They've set up huge
manufucturing districts, and the way it usually works is young adults will work
there for a few years, earn enough money in that time to go buy a small farm,
start up a family, and subsist off of whatever they can produce themselves for
the rest of their lives.
> Bad factory environments exist in much of the Global South, and China in no
> exception! Some generalizations are valid, simply because they still apply.
Are there still instances of child labor in China? I'd be shocked and amazed if
there aren't, but I can say the same thing about the US, where there are still
underground slave rings that sell young children for sex. BUT, there are enough
reputable manufacturing companies that TLC should be able to maintain full
legitimacy in their business dealings there. Quality control is a much more
painfully significant issue in this case. I once caught someone telling a
supplier in China that his customer needed them to adhere to strict quality
standards...and that this time they actually meant it. That to me screams
"empty promises" in that regard.
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In lugnet.lego, James Powell wrote:
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as sad (wrong depending on how ones sees it) as it may sound that TLC is
moving production to China it *IS* the way of this century. Expect to see
a lot of this occuring for the rest of our lifetime! 1st world countries
*CAN NOT* compete against the wages of those countries. That is off
coruse the way of capitalism. I’m not saying it is wrong, that is just the
way it is.
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Actually, I don’t think it will save them much at all. Sea transport will
now be across the atlantic, they have built the factories in Hungary, have
the ones in Bulland (sp), ect. Cost to run the actual factories is
relatively low in terms of personel. IIRC, when Enfield was closed, it used
1 person to run 34 molding machines. They would use more people where the
molds are changed more often, but not many more. Probably not more than 3-4
people on the floor of the molding shop at a time. Having seen the packing
display at LLCA, I would suspect a similar level of supervision amongst the
packing machines. Meaning that the total on the floor people in a plant is
like 8-10 at a time, plus service people. (Probably another 8-10 people).
Given a 1 min mold cycle, and 8 pieces a mold, that gives you:
8x34x60x8 (one shift)
=130560 bricks
To cover the cost of the employees. I’d suspect that the shot time is rather
less than a min for most elements. I’d also think that given inteligent
design, those numbers have come down rather than gone up. The press release
talks of overcapacity, not undercapacity.
Lego is a capital intensive operation, rather than a labour intensive one.
Maximizes advantages of working in 1st world, minimizes advantages of 3rd
world.
James Powell
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I would agree here. Maybe they are looking to take advantage of a newer,
cheaper ABS supply? Is there a tax write-off in Denmark for relocation expenses
like these? Its gotta cost a pretty penny to move the stuff.
Jeff
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In lugnet.lego, David Eaton wrote:
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In lugnet.lego, James Powell wrote:
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Meaning that the total on the floor people in a plant is
like 8-10 at a time, plus service people. (Probably another 8-10 people).
Given a 1 min mold cycle, and 8 pieces a mold, that gives you:
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Supposedly, it’s around 7 seconds to cool and eject a new element from the
mold (obviously differs according to piece size, etc). So if you count
injection time, it’s probably around 10 seconds or so? And I believe the
number of elements produced per year is supposedly about 20 billion? Hmm. How
many parts get squeezed off in a single mold? I know I’ve seen 2x4 molds that
have 8 parts, let’s go with that for starters.
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2x4 bricks are in 8-part molds, yes. I’d venture a guess that 1x1 molds produce
more parts per shot, and that some really large parts might even be single-part
shots. Now that’s all because you want to use the full volume capacity of the
machine on parts where you know you’re going to have to tool up new molds on a
regular basis. For limited production parts, you want to minimize the amount of
wasted tooling work, so you cut down the shot size as much as you can while
still having a reasonable expectation of meeting the minimum required quantity.
The BIONICLE Vahi mask, which isn’t very big, was limited to a 2-part shot
because it was intended to be packed with expensive video games, not included in
fast-selling sets. Most of the other Kanohi were produced in 4-shot molds,
while the smaller Krana and Kraata were produced in 8-shot molds like the 2x4
bricks.
A few parts, like baseplates, are thermoformed instead of injection-molded.
Whether they are vacuum-formed, pressure-formed, or a combination of the two I
couldn’t say, but if you look inside the taller raised baseplates you can see
the distinctive freeze-lines that result when the part has only touched a mold
surface on one side. Since there are no mold numbers showing on the outside of
the part, there’s no way of knowing if they’re running those in single-part
shots or running a full 4’x8’ sheet at a time. Since the flat baseplates could
be cut down into whatever size you wanted, it’s probably a safe bet that those,
at least, used to be run in 2.5’ increments (the minimum size to give you the
option of either 48x48 X-Large or 32x32 Large plates) and then just chopped up
into whatever size they want with a press. I’m not so sure newer baseplates are
produced the same way. If you look at the corners, they have round corners
instead of just having the tips knocked off at 45 degrees, the top edge is
radiused, and they actually have mold info stamped into the bottom
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That’d be 6,944,444 hours per machine per year meaning roughly 800 molding
machines going non-stop, not including time to switch molds and to switch
color batches. So assuming 2 people per 30 machines (adding 1 to help fudge
the mold/color switching) that’s about 27 people (let’s say 30) at any given
time at the plant. Assuming 4 shifts of full-time people, that’s a total crew
of 120, probably more, plus other staff for the facility itself (executive,
security, janitorial, etc).
So, maybe a ~200 person operation all told? That sound reasonable? No clue
what wages are in Denmark vs. China-- but at a guess we’re probably talking
about $5 to $15 million in Denmark, and maybe half that in China? But that’s
just a pulled-out-of-my-ABS kind of guess.
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Since they’ve been cited as having laid off more than double that amount in
production labor at a time, that can’t possibly be right.
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From what I’ve heard, Lego sounds sort of top-heavy. Probably part of why
MegaBloks can compete so well-- a top-heavy company has lots of executive
chains and processes to go through to get a final product. And Lego’s
attention to detail and struggle to be “the best” only make it slower.
MegaBloks by comparison probably has a MUCH faster turnaround time for new
products, and less attention to quality, which is (I’d guess) where the REAL
savings are.
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When you’ve got cheaper design, cheaper raw materials, and cheaper labor, you
can sell less product and still make a lot more profit. TLC has been running
with a comfortable 1-year turnaround on new themes/sets, but they’ve recently
announced that they’re going to be dropping that down to a six-month period
(which, yes, means that no more than half of the year’s product could ever be
shown at Toy Fair, because anything that’s going to see a September release
wouldn’t even have been sketched up the previous February, and would be old news
by the next).
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In lugnet.lego, Thomas Main wrote:
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Well, I meant that as a joke.
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Yeah, well, the joke stopped being funny about three years ago. About the time
when they had to start up an entirely new production line just to keep up with
consumer demand for BIONICLE product (don’t worry, they upped the price on Toa
by a buck to cover the cost of the new equipment, so it’s not draining funds
from other themes).
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I am aware that Bionicle is extremely sucessful. But your post did get me to
thinking. Bionicle is such a strong brand by itself that as long as TLC is
looking to sell properties to (I assume) raise cash...Bionicle would be a
heck of a choice :P
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Common sense says that when you’re trying to trim up your company to become
profitable, you don’t drop the stuff that’s making money. The theme parks sound
like they’re one of the big drains that needs to be plugged up, but getting rid
of BIONICLE would put them deeper in the hole (not to mention the fact that in
order to find a willing buyer, they’d probably have to bundle free or
nearly-free use of the entire TECHNIC system in with it). WotC played this same
game when Hasbro tried to trim them up, and it didn’t go over very well. They
were told to cut expenses by a simple percentage, so what the top management did
was go through and axe entire projects that they weren’t very fond of, rather
than getting rid of the dead weight that was dragging them down. The result was
that they were even less profitable since those ex-projects were actually
bringing in a small profit, while some of the favored projects where bleeding
like a stuck pig because various do-nothing friends had been hired into
meaningless positions as personal favors. They screwed up when they were given
the chance to handle it on their own, so Hasbro’s corporate people came in and
did it for them. Or to them, in some cases.
Now, in WotC’s case, they were running the company like a giant frat party, but
they had a couple of huge money-makers (Magic: The Addiction, and PokéCrack)
that kept them profitable. In TLC’s case, they’re trying to run a clean company
but market shifts are draining their profits while they try to figure out how to
adjust. In either case, improving the company’s bottom line requires careful
cost/benefit analysis, not cutting projects based solely on personal preference.
After all, that could backfire on everyone. Perhaps the person left to make
such decisions would feel that the Designer series isn’t glamorous enough for
today’s market, and replace it with some flash-in-the-pan movie license.
The only thing they need to do with BIONICLE is start taking advantage of its
full potential, by licensing it out to more than a scant handful of companies.
Kids have been begging them for Halloween costumes since the line debuted, and
they’re just finally producing two costumes, neither of which appear to come
with the appropriate accessories (nor can you buy those specific weapons
seperately). Another big request is something that could be used for a
BIONICLE-themed birthday party, and all I’ve been able to suggest before now was
buying mask packs as party favors, and seeing if they could get official
permission to have a cake made using copyrighted characters.
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In lugnet.lego, David Laswell wrote:
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So, maybe a ~200 person operation all told? That sound reasonable? No clue
what wages are in Denmark vs. China-- but at a guess we’re probably talking
about $5 to $15 million in Denmark, and maybe half that in China? But that’s
just a pulled-out-of-my-ABS kind of guess.
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Since they’ve been cited as having laid off more than double that amount in
production labor at a time, that can’t possibly be right.
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Yeah, it does admittedly sound low to me-- where are you getting the cite? Of
course, I guess I also didn’t include packaging and shipment, either-- and
that’s not necessarily just the “final” packaging, but shipping to other areas
to be “finally packaged” (assuming that those packaging facilities don’t also
move to China as well).
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When you’ve got cheaper design, cheaper raw materials, and cheaper labor, you
can sell less product and still make a lot more profit. TLC has been running
with a comfortable 1-year turnaround on new themes/sets,
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Huh! Where’d you hear that? From what I’ve heard it’s been anywhere from 6
months to 5 years for sets and themes (depending on how involved they are), and
usually around 3 years (IIRC I remember hearing that various things like Legends
and standalone models like the Wright Flyer or something are quicker to
production)
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but they’ve recently
announced that they’re going to be dropping that down to a six-month period
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That’s awesome! (or, *should* be awesome if they don’t start dropping even more
quality). Did I miss some uber-cool announcement somewhere? But anyway, that’d
allow for less time for MB to steal their designs and whatnot (which I’ve heard
they’ve done in the past) Hm. I wonder how long it takes MB to do a product
design?
DaveE
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In lugnet.lego, Ted Michon wrote:
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In lugnet.lego, Jeff Findley wrote:
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... I think stores where you can “pick a brick” would do much to increase
sales.
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I’ve spent a lot of time at Pick-A-Bricks (LLCA, DDT Anaheim, Glendale
Galleria) and my observations suggest they are great for us, but not the
average customer. My eperiences is that the average visitor says “wow” when
they see all the items, but in the end buys nothing. The next most common
customer fills a bag at a PAB by weight and has it weighed, realizes it’s way
too expensive, and quietly stashes the bag someplace to avoid having to sort
it back into bins.
I recall one day at DDT where 4 of us spent 3 hours packing large cups. About
20 people came by with the “wows” and not one of them bought any bricks.
-Ted
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Although that may be your observations, in the time that I have been with LEGO
Brand Retail, PaB cups have been top sellers in many stores nearly every week.
I know that at Tyson’s Corner, there are some bins that we are always refilling.
While we have some amount of “Wow”s and abandoned cups, that is far outweighed
by the window shoppers who sudden declare it “the coolest thing ever” and
promptly fill a cup to purchase.
Pick A Brick is an absolutely wonderful thing for Brand Retail and LEGO as a
whole.
-Brian
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In lugnet.lego, David Eaton wrote:
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Yeah, it does admittedly sound low to me-- where are you getting the cite?
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2-3-03, when 161 waged production workers in Billund were laid off, and 1500
was the number cited as being employed in the affected departments.
2-27-03, when 43 administrators were in Billund were laid off, and 2000 was the
number cited as being employed in the whole Billund organization (meaning they
have about 500 people in administrative or higher positions).
10-27-03, when they announced that one of the Swiss plants would be shut down,
and that there were 130 employees just at that one plant (and it sounds like
that was one of the plants that produced bricks).
Also 10-27-03, where they announced another 257 layoffs in Billund, primarily
in the production ranks.
3-16-04, when they announced about 500 layoffs globally, 1/3 of them from
Denmark.
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Of course, I guess I also didn’t include packaging and shipment, either-- and
that’s not necessarily just the “final” packaging, but shipping to other
areas to be “finally packaged” (assuming that those packaging facilities
don’t also move to China as well).
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Loose bricks would be packed up and shipped to other plants (clearly, since the
Czech plant paints parts, but does not mold them), but if a given plant is
packing the sets, there is no logical reason that I can think of that they
wouldn’t also be packing the cases right afterwards. As it is, while they’ve
been shipping parts to Enfield to be packed locally, early runs of sets are
still shipped fully packed from Denmark to get shelves stocked right away.
After all, it saves having to wait for them to finish packing the loose bricks
that would be coming in on the same shipment, but it’s got to be cheaper to ship
loose bricks from Denmark and pack them here than it is to ship lots of
half-full (or much less, in the case of Spybots). If production moves to China,
labor costs drop quite a bit, so it might be cheaper to have everything packed
there and shut down all of the factories except one in Billund (for
prototyping/design purposes) and Germany (for tooling), leaving places like
Enfield as not much more than warehousing/shipping/marketing outfits.
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Huh! Where’d you hear that? From what I’ve heard it’s been anywhere from 6
months to 5 years for sets and themes (depending on how involved they are),
and usually around 3 years (IIRC I remember hearing that various things like
Legends and standalone models like the Wright Flyer or something are quicker
to production)
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<snip>
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That’s awesome! (or, *should* be awesome if they don’t start dropping even
more quality). Did I miss some uber-cool announcement somewhere? But anyway,
that’d allow for less time for MB to steal their designs and whatnot (which
I’ve heard they’ve done in the past) Hm. I wonder how long it takes MB to do
a product design?
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If you scroll down a bit on
this page, they mention that the development time for product ideas will be cut
by about 50%. The industry standard for major toy companies has been about a
year for quite some time, but I can’t find anything specifically listing
12mo/6mo timeframes. That might be something that I was told during my last Toy
Fair visit, or I might be subconsciously combining the two bits of info (I do
remember that they didn’t have Han Solo ready to display with the new Millennium
Falcon, but they had his dark-blue parka hood). We’ll have a pretty good idea
by the end of next year, once we see exactly how much late-release product was
not shown at NY Toy Fair compared to previous years. Now that they’ve switched
over to a rolling release schedule with new product coming out nearly
year-round, there have always been a couple of sets released way late in the
year that weren’t even mentioned at Toy Fair in February, but they’ve also had
at least a couple sets scheduled for release as late as October. Never anything
from the following November/December/January, though.
I could see, though, that an idea could be bounced around for a few years before
it gets the go-ahead for full-out development, or they might be doing loose
planning well in advance of where they’re actually at (it’s been mentioned on a
few occassions that the BIONICLE story outline was laid out for seven “books”,
the second of which just began with the release of the Metru-themed sets), but
if they’ve been taking 3-6 years to develop each and every set, they very well
deserve to go bankrupt, because there’s no way they can keep up with market
changes with numbers like that. If a line completely flops, you’d have years of
wasted development for sets that wouldn’t then ever be released. And it would
take a few years to pick up the slack in product releases. They’d be
hard-pressed to be able to release Star Wars sets before their associated
movies, since Lucas works on a three-year schedule, with designs being finalized
well into the production process.
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In lugnet.lego, Ka-On Lee wrote:
> In lugnet.lego, Jeff Szklennik wrote:
> > Lego, you darn well better absolutely
> > NOT use slave labor & conditions!!!! (although that's probably what they're
> > counting on to cut costs by going to china. I don't wanna hear about poor
> > abused children being forced into making one of the best toys invented FOR
> > children. way to go Lego, you really tick me off.
>
> That is some rather ignorant ranting. Why would you expect those single kids,
> spoiled by two parents and four grand parents, would be forced to work? And
> what is this "slave labor"? Some cold war garbage?
>
> Yes you really tick me off too.
I apologize, Ka-On Lee, for not making my point clearer. I had no intention of speaking negatively of children. I was lamenting the tendency of large corporations to abuse what they see as less developed economies by using the most vulnerable in a society for VERY cheap labor in poor working conditions. I admit, not all of China's labor force is slave labor, but i've read horror stories of large US toy companies (mattel & hasbro) & retailers (especially Wal*Mart, being the biggest, but not the only pne) being the cause of Chinese children & early teens (many being girls) to become, in effect, slave laborers in order to support their families, just so richer nations can have cheap conveniences. Some US companies are so absolutely in pusuit of profit because consumers want cheap stuff, and don't care who gets abused to make it. I REALLY try avoid the abusive companies/retailers, or if i deal with them, make sure the product is made somewhere else) Basically, my point was that i don't want my favorite toy, a source of joy for me & many other adults & children, to be made BY children in slave labor conditions. Thanks for calling me on my un-clearness b4
Jeff
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In lugnet.off-topic.debate, Jeff Szklennik wrote:
woah! why didn't the text 'wrap' like in the
editing box? can someone fix my post (b4 this one)?
Sorry!
Jeff
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In lugnet.lego, David Eaton wrote:
SNIP
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From what I’ve heard, Lego sounds sort of top-heavy.
Probably part of why > MegaBloks can compete so well
-- a top-heavy company has lots of executive chains
and processes to go through to get a final product.
And Lego’s attention to detail and struggle to be
“the best” only make it slower. MegaBloks by
comparison probably has a MUCH faster turnaround time
for new products, and less attention to quality, which
is (I’d guess) where the REAL savings are.
DaveE
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surprise-overpaid upper mananagement cutting labor to save costs.
we can still have the best product without keeping the perception that
more management is better.
Jeff
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In lugnet.lego, Jeff Szklennik wrote:
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surprise-overpaid upper mananagement cutting labor to save costs.
we can still have the best product without keeping the perception that
more management is better.
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It’s really easy to look at it that way, but the evidence suggests otherwise. I
cited a few press releases elsewhere in
this thread, most of which dealt with layoffs. Within a month of announcing 161
production layoffs last year in Billund, they also announced 43 administrative
layoffs (plus 11 more through attrition). The two releases listed the
production force in Billund as being about 1500 people, and the total workforce
there being about 2000, which means there’s about a 3:1
production/administration ratio. 161 to 54 is still weighted a little against
the production force, but not by much. The other layoff notices don’t say
anything more than that “most” of the layoffs will be in production, but there’s
nothing to suggest that 25% of those layoffs aren’t in administration.
They also culled about a third of the top management positions earlier this
year, dropping down from 14 execs to only 9, and some of those have been
replaced. Kjeld Kirk Kristiansen has also been quoted as saying that he’ll be
pumping a large chunk of his own personal wealth back into the company, which
sounds like it’ll be enough to make it break even.
Mr. Kristiansen, the grandson of the man who founded the company, has also just
stepped down as CEO.
Yeah, it sucks when a company constantly looks to the production staff as an
expendable source of profit reclamation while doing everything they can to
protect and line the pockets of the upper management, but these aren’t the
actions of such a company.
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> Follow-up: In the Danish TV News, in two interviews,
> the new CEO said, that most of the production would probably be moved to
> China (where Click-its and many parts are already made)
Okay...
They will be using the same molds so part quality should remain similar. (This
says nothing for color consistency or actually getting the right parts in each
bag/box)
They probably won't save much money because they've often said that the factory
is so automated that very few people are required to run it.
It will probably cost a lot of money to shut down the old factory and set up
operations in China. It will probably take many years for the small labor
savings to cover these setup costs.
After the setup costs have been covered, yearly savings from the cheaper labor
in China will remain an insignificant part of the big picture.
None of TLC's problems will actually be solved, but they will have shaved a bit
of cost out of their production. After they realize that these cost savings
aren't helping them, they will regret shutting down the factory in Denmark, but
it will be too late to do anything about it.
From my own observations and things in the various news articles recently linked
in this thread, TLC has two big problems:
1. Supply Chain Issues - Moving to China does not solve this. At the worst, it
may make things worse. At the best, it will require TLC to restructure the
entire supply chain. (That may prove to be a very good thing in the long run,
depending on how things go.)
2. Low Sales. The article that started this thread said that sales in 2004 are
expected to be 8b compared to 8.4b in 2003. I'm tempted to suggest that this 5%
decrease is caused by the "insignificant" minority of AFOLS who do not like the
new colors, but I wouldn't want this post to get sent to lugnet.color so let's
forget about that. :)
The bigger problem is not the 5% drop compared to last year, but the fact that
it's part of an ongoing trend. I blame the the lower sales volume on high prices
and less appealing set designs.
LEGO prices have risen at an abnormal rate since the year 2000. I believe that
bad set designs since the mid 90s resulted in TLC eventually charging more in
2000 to make up for lower sales. Come the year 2000, less children were getting
into LEGO because it is expensive and the set designs are not very appealing.
Older children are also getting away from LEGO at a younger age because the set
designs are unappealing. Set designs are slowly starting to improve (with some
exceptions), but it's not helping enough. The rate at which older children are
giving up LEGO is probably higher than the rate at which young children are
getting into it. That would explain why TLC's been focusing so much effort on
younger children lately. Sadly, I think it's backwards. Retaining the older
children should be more important than gathering the young ones. Older children
will pass the hobby to their younger siblings anyway.
The problem with the focus on younger children is that TLC is doing so in a
"trendy" way. Movie licenses, flashy boxes, and gimmicky set designs, etc. They
generate the quick sales without creating any brand loyalty. Children get into
LEGO and then give it up after a year or two, so TLC has to keep trying to woo
the next generation of 4-8 year olds year after year while the 8-12 audience is
nowhere near what it once was or should be.
This move to China will not result in lower set prices for customers. The
savings will be used to help offset some of TLC's losses. Turning the company
around will have to come from an increase in sales volume. What's their plan for
that? I guess we'll have to wait and see the 2005 set designs in a few months.
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I wonder if LEGO has considered how that would affect prices in various
countries. For example in Canada LEGO is duty free since Denmark is considered
a preferred trading partner, but I am not sure on the situation with China, will
see if I can find it's status. Otherwise it might bump the raw cost of the
goods in CAnada at least if there would be a duty applied. OUCH!
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In lugnet.off-topic.debate, Jeff Szklennik wrote:
> In lugnet.off-topic.debate, Jeff Szklennik wrote:
>
> woah! why didn't the text 'wrap' like in the
> editing box? can someone fix my post (b4 this one)?
Not that I am aware of, as fixing spacing or linewrapping is a kind of editing
and LUGNET does not support editing.
You can repost it and request a cancel of the original post if you like, but no
one can change it, not even you, as far as I understand the system.
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Not sure farming things out to China will benefit LEGO that much, the production
system is so automated it doesn't involve that much hand work to my
understanding but it would be interesting to have someone from LEGO comment on
this.
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