Lego: Consolidating distribution (B)
Case Study

Lego: Consolidating distribution (B)

7 pages
March 2009
Reference: IMD-6-0316

By the end of 2006, LEGO had to make a key decision: continue with the closure of the remaining regional logistics operations and transfer responsibility to DHL in the Czech Republic, or find an alternative solution.

Costs were spiralling and the partnership with DHL was on the brink of a divorce. None of the solutions would be simple to implement, but did LEGO and DHL really have any other choice?

This is a follow-up on the A-case and describes the actions taken by LEGO and DHL to ultimately create an efficient and flexible logistics process, more advanced than any of its closest rivals and one that will especially demonstrate its strength and true value during turbulent times.

Learning Objective

Both partners were initially looking at the entire process from their own perspective, creating a situation that, at first sight, appeared irresolvable. It took them a year before they realized that a solid partnership can only be developed on some common ground. After that, both parties became more open-minded and agreed to make concessions. Often, a simple event between two parties, like a dinner or good heart-to-heart talk can make a breakthrough. In this case it was a secret hotel meeting that did the trick. With the pieces of the puzzle now more easily falling into place, the partnership grew stronger and LEGO and DHL now share the same objectives and targets. Not satisfied with only creating a standard centralized logistics process, LEGO pushed hard for new and inventive logistics solutions and services. The results, by the end of 2008, was that they had built a world-class process with a gain/pain sharing program, real-time performance measurement data, lean workshops, regular customer feedback surveys and additional value-added customer logistics services.

Keywords
Outsourcing, Change Management, Partnership, Production Management, Operations Management
Settings
Europe, Asia
2003-2008
Type
Field Research
Copyright
© 2009
Language
English
Related material
Teaching note, Video
Case clearing houses
IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre, UK Office

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Fax +44 (0)1234 751125
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

The Case Centre, US office

Babson College

Babson Park, Wellesley MA 02457, USA
Tel +1 781 239 5884
Fax +1 781 239 5885
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

Contact

Research Information & Knowledge Hub for additional information on IMD publications

2011 ECCH AWARD WINNER (Production and Operations Management)
2009 EFMD AWARD WINNER (Supply Chain Management)
Looking for something specific?
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics