Lego’s Renaissance

Named as the toy of the century, Lego has been around for fifty years but faces huge competition from toy manufacturers around the world. Seven Lego sets are sold each second. On average there are 62 Lego bricks for every person on earth. With a production of about 306 million tyres a year, the Lego Group is the world’s largest tyre manufacturer. Nearly 400 billion Lego elements have been manufactured since 1949. The Sunday Telegraph has a really good article on the renaissance of the Danish business Lego - the world’s fifthlargest toy manufacturer.

As the company celebrates fifty years as an iconic manufacturer of building brics, it is part way through a seven year relocation and restructuring programme designed to reduce costs, improve productivity, invest in product development and carry the business well into their second half century. Lego’s strategy is known as Shared Vision and aims to rebuild the company and revitalise the LEGO brand as a synonym for creative building fun and role play.

The changes have included

Outsourcing manufacturing away from Denmark to new production facilities in Eastern Europe and Mexico
Maintaining the specialist skills manufacturing facilities in Denmark
Development of products and product lines centred on the classic product idea, the LEGO brick
Speeding up the time period between developing a new product and bringing it to market - that time span is now less than 12 months

The Telegraph reports that

‘Lego’s renaissance has been about a return to core values though ...There has been a series of job cuts, asset sales and cost-cutting measures. Staff numbers have fallen from 6,000 in 2004 to some 4,500 today with further reductions to come, while perks such as the company private jet have been scrapped. The company also recouped £278m by selling off its Legoland theme parks to Blackstone, the private equity group.Perhaps the biggest change was the decision to outsource distribution, packaging and production plants to Eastern Europe and Mexico, resulting in job losses and threatening the relationship of Lego with Billund, its birthplace.’

Approximately 19 billion LEGO elements are made every year equivalent to approx. 2m elements an hour or 36,000 a minute.

Read the full article here

Further reading

Lego UK

BBC “Lego celebrates 50 years of fun”