1. What were LEGO’s main expectations and learnings from the relationship with Flextronics? Prior to the Flextronics offshore outsourcing project‚ LEGO had a very tight control of all the elements of the value chain. Their production plants were expansive and specialized which‚ in theory‚ would create a higher degree of standardization. Their Swiss factories only produced DUPLO toys and Technic products‚ their Danish factory solely produced LEGO System products‚ and the U.S. facility focused on
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significant logistics functions to Flextronics‚ a Singapore-based contract manufacturer. Microsoft already knew Flextronics because they had already contracted out the manufacture of computer mice to them. Since Microsoft had worked with Flextronics for several years‚ relationships between employees of the two companies are very good making the strategic alliance an advantage to Microsoft. Another advantage of the outsourcing to Flextronics was the cost and quality of Flextronics. There are always
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traditional ODM companies. Second‚ threat of new entrants is high; as the growth of EMS facilities was rapidly over last decade through vertically integrated‚ and they had more sophisticated production engineering and greater manufacturing capacity than ODMs. By 2004‚ most of the leading EMS companies extended client lists to break into ODM sector. As OEM R&D budgets shrank and product life cycles shortened‚ they looked to outsource aspects of design along with manufacturing‚ thus ODM and EMS were
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1.What were LEGO’s main expectations and learnings from the relationship with the Flextronics? Expectations: a. Saving cost by outsourcing to low-cost countries: Prior to outsourcing‚ LEGO owned and operated production plants mainly in relatively high labor-cost countries‚ such as the United States‚ Switzerland and the South Korea. The main reason for this is that LEGO built plants close to its main markets to save transportation cost. But LEGO finally realized that the reduced labor cost in some
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its growth and size‚ why is Inventec not very profitable? It can be concluded into 3 main factors : 1. Rivalry existed In the existing ODM industry‚ there are lots of competitors such as Quanta‚ Mitac and Compal. Because of the fierce competition‚ there is increase difficulty for completing differentiation. Moreover‚ client companies tend to limit ODM use to highly commoditized products commoditized products. There is also inherent risk associated with the need of frequent technology innovation
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Group: An Outsourcing Journey - Assignment #5 Question: Why do you think Lego’s outsourcing “failed”? (What factors explain the short-lived outsourcing relationship between Lego and Flextronics?) To answer this question‚ I want to state the fact that short-lived relationship between Lego and Flextronics was not a total failure. And to begin with‚ I want to list some of things that Lego learned through this outsourcing. From this list‚ we can also see why their relationship was short-lived
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Case Write-Up: LEGO Group-An Outsourcing Journey Q1 LEGO’s main expectations and learnings from the relationship with Flextronics LEGO’s main expectation was to optimize its global supply chain by saving cost and reducing production complexity from the cooperation with Flextronics. However‚ the contract between those two lasted for only 3 years. In the end‚ LEGO re-took control of plants in Czech Republic‚ Hungary and opened a new site in Mexico Lessens LEGO received from this unsuccessful
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MANAGEMENT INFORMATION SYSTEMS IMT - MIS (Assignment Questions) Institute of Management Technology Centre for Distance Learning Ghaziabad 2 IMT CENTRE FOR DISTANCE LEARNING GHAZIABAD Distance Learning Programme MANAGEMENT INFORMATION SYSTEMS Notes: a. Write answers in your own words as far as possible and refrain from copying from text books/handouts. b. All answers should be of 200 words. c. Write on one side of the paper. d. Answers of Assignments I‚ II‚ III and IV (Case Study)
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What were LEGOs main expectations and learnings from the relationship with Flextronics. The Legos main expectations were: A 1. The rapid cost cuttings so as to overcome the largest internal financial crisis in the history of company. 2. The problems of product development and distribution would be sorted out. 3. To reduce the production complexity by attracting large sub contractors. However‚ the deal was not successful and Lego learnt that 1. Outsourced facilities are always not effective
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1. How has Altera modified its strategy? Why? Altera learned a hard lesson in inventory management after losing $115 million worth of inventory in the 2000-2001 timeframe. Altera produced its programmable logic devices and stocked them in warehouses waiting for customer demands. Their thought was to provide a cost advantage to their customers by having readily available stocks. Altera also leaned forward to help customers by building new products from specs. This push strategy backfired‚
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