the-lego-group.jpgFive years ago, the LEGO Group was one of the worst companies in the toy industry at handling its logistics. Last month, the Group received the European Supply Chain Excellence Award for its logistics operations. Men in dinner jackets, women in evening gowns – it was like an evening at the Oscars when Egil Møller Nielsen, Vice President, Global Distribution Logistics, and his team represented the LEGO Group in London recently to receive a European Supply Chain Excellence Award 2008 in the “Logistics & Fulfilment” category.

The LEGO Group – which back in early 2004 struggled to cope with an old-fashioned, rigid, costly logistics and distribution system – was awarded the prize for the very comprehensive and successful way it had turned the situation around and, for example, established a single logistics and distribution centre for the whole of Europe and Asia (European Distribution Centre) in Jirny, Czech Republic.
Fantastic acknowledgment

Egil Møller Nielsen says: “I see it as a fantastic acknowledgment of the vision and journey we began back in 2004. The award is a huge compliment to all employees, colleagues, customers and suppliers who have been involved in our turnaround. Our journey has occasionally been hard and challenging but we’ve made it to our destination and delivered what we promised: performance, costs, flexibility and innovation. That’s why we’re incredibly proud of this award.”

Before the award was decided, Egil Møller Nielsen and Jesper Toubøl of LEGO Customer Logistics were invited to address the panel of judges – and delivered a presentation which the panel found very clear and well documented.

The panel motivated its decision: “The supply chain changes are seen as one of the keys to helping the LEGO Group turn around from its situation in 2004. Tasks were given directly from group management, and the aim was to become an agile supply chain in order to support the business. A number of innovations were seen in the LEGO Group presentation, and we felt that the organisation in its core disciplines was better than others in the logistics category – for instance, in its use of Logistics Strategy as a Strategic Asset to meet business goals.”

The judges also liked the fact that the LEGO Group keeps a close eye on its logistics and distribution costs via a monthly scorecard, and that supplier services are measured by means of a KPI system which issues bonuses – and penalties. Global Distribution Logistics has also agreed with suppliers that together they will pursue a shared vision and set the global standards for logistics on a win-win basis. Pain/gain sharing to ensure same direction and targets. A customer survey had been conducted before planning the changes so that the LEGO Group knew its customers’ wishes and how to deliver them.

LEGO Global Distribution Logistics
Egil Møller Nielsen, Vice President
Tel: +45 7950 570

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