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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.
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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
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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
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