Lego to end outsourced production
By Staff -- Playthings, 7/2/2008 8:26:00 AM
BILLUND, Denmark—The Lego Group said yesterday that it was moving its production largely in-house, announcing a plan to end its 3-year-old outsourcing relationship with Singapore-based Flextronics by early 2009.
As part of its plan, Lego is in talks to assume management of Flextronics’ facilities in Juárez, Mexico, and Nyíregyháza, Hungary, a deal it hopes to have completed by the end of this month. Ultimately, the company’s plan will move production of toys for U.S. distribution from Juárez to a new site in Monterrey, Mexico, in early 2009.
“We have had an intensive and very valuable cooperation with Flextronics on the relocation of major parts of our production. As expected this transition has been complicated but, throughout the process we have maintained our high quality level,” said Iqbal Padda, Lego’s executive vice president in charge of the company's global supply chain. “Jointly, we have now come to the conclusion that it is more optimal for the Lego Group to manage [its] global manufacturing set up. With this decision the Lego supply chain will be developed faster through going for the best, leanest and highest quality solution at all times.”
In addition to Flextronics’ sites in Mexico and Hungary, Lego has factories of its own in Billund, Denmark, and Kladno, Czech Republic, and cooperates with other manufacturing suppliers in Poland, Hungary and China. After the change in the production relationship with Flextronics, the LEGO Group will have a total of about 6,500 employees.
Separately, this week Lego said that Sten Daugaard had become the Lego Group’s new chief financial officer effective July 1. He joins the company from SGL Group, where he also served as CFO.
