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Essay / Research Paper Abstract
In order to compete with increasing levels of competition Lego had to reorganize their supply chain. This 3 page paper examines the impact of the reorganization, which included centralization of distribution. The bibliography cites 1 source.
Page Count:
3 pages (~225 words per page)
File: TS14_TElego02.rtf
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Unformatted sample text from the term paper:
countries. Facing increased competition from areas such as China, were costs are much lower as a result of comparative advantages, Lego has had to develop ways of competing as well
as undertaking strategies to contain costs. There have been some significant changes in the supply chain, aimed at reducing costs and increasing efficiency. The financial results are indicative of
the positive outcome of the change despite the competition the firm is going from strength to strength with increasing sales. The high level of differentiation is supported with the underlying
systems that allow the goods to be distributed in a cost effective manner. With the opening up of then DHL Excel Supply chain contract has been able to create value,
signing a five year contract with the firm, who are handling all of the supply chain logistics. The distribution of all of the Lego bricks that are going to Europe,
Africa, Asia and South America are all channelled through a single distribution centre in the Czech Republic. The impact of this change has been far reaching and generally positive. The
result has been the closure of five regional distribution centres which had created a far more fragmented supply chain, by creating a more focused approach the firm is able to
benefit for fewer overheads and a simpler system. By effective outsourcing the supply chain management there has also be the ability to leverage the technology and expertises in supply chain
management that exists in the commercial environment without having to make large investments and face a steep learning curve, however, this also places much of the dusctio outside of the
direct control of Lego. . The centralization has resulted in faster distortion times between order being placed and the goods being received by the client. This helps to enhance
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