Subject:
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Re: Lego changes CEO after new losses
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Newsgroups:
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lugnet.lego
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Date:
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Thu, 21 Oct 2004 21:51:24 GMT
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Viewed:
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5519 times
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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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Message is in Reply To:
 | | Re: Lego changes CEO after new losses
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| (...) Absolutely agree. (...) 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 (...) (20 years ago, 21-Oct-04, to lugnet.lego)
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