Strategic Analysis of Lego Group's Global Supply Chain Management

This report provides a comprehensive analysis of the Lego Group's global supply chain management. It begins by explaining how the House of Quality contributes to customer value and identifies strategic and competitive priorities. The report then maps out the structure of the supply chain, detailing the stages, organizations involved, and their functions. It further explores the concepts of variation, uncertainty, and buffering mechanisms in relation to the case study, examining the role of the supply chain in these practices. The analysis also investigates how competitive priorities influence these three aspects of the supply chain. The report emphasizes the importance of customer orientation, quality management, and strategic alignment within the supply chain to enhance customer value and maintain Lego's competitive position.

Managing the global supply chain
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TABLE OF CONTENT
Introduction .........................................................................................................................3
1. ..........................................................................................................................................3
Using the House of Quality, explain how the supply chain of the lead organization
contributes to customer value. Identify strategic and competitive priorities as well ....3
2............................................................................................................................................5
How is the supply chain structured? Map out the stages that you can identify and
organizations involved in each stage and functions they perform. ................................5
3............................................................................................................................................7
How the concepts of variation, uncertainty, buffering mechanisms is related to the case
study. Role of supply chain in these practices .............................................................7
4..........................................................................................................................................10
How have competitive priorities influenced these three aspects...................................10
Conclusion ........................................................................................................................12
References .........................................................................................................................13
ILLUSTRATION INDEX
Illustration 1: House of quality............................................................................................4
Illustration 2: Supply Chain management............................................................................7
Illustration 3: Competitive priorities..................................................................................10
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INTRODUCTION
Supply chain is an important phenomenon in the process of operations
management in which company focuses on the sources through which products and
services can be delivered to the end users and other associated parties (Wang,
Gunasekaran, Ngai and Papadopoulos, 2016). Thus, in this respect the present research
study has been made on Lego Group which is a toymaker company operating business in
USA. The company holds third largest position all across the world in the area of toy
making. Therefore, in this respect the study has been describing the role of supply chain
in enhancing customer value. Apart from this, discussion has also been included
regarding influence of competitive policies in different aspects of the business. Each and
every process of supply chain should be aligned in specific manner so that all the
functions perform the duties and responsibilities in effectual way.
1.
Using the House of Quality, explain how the supply chain of the lead organization
contributes to customer value. Identify strategic and competitive priorities as well
House of quality is the process that starts with the thinking process . It enables
people to think together. The process is used for planning of product development. The
services associated with it starts with the voice of customer. Typically, House of Quality
is a diagram which has different structure and parts that depicts the structure of a house.
This is useful in demonstrating how the product is meeting up all the requirements and
preferences of customers. The House of Quality is useful for Lego Group as using such
technique aids the entity to map the requirements of customers with that to product’s
capabilities (Gilling and Ulmer, 2016). It is also useful in collecting suitable data abut the
requirements of products and how it will be accepted by the clients. Thus, it is a major
part of the quality function deployment which makes use of planning matrix and access
the needs and demands of customers. Thus using such method Lego Group has come up
with several innovative toy products that can match the requirements of clients (Zhou,
Su, Yeung and Viswanathan, 2016).
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Source :(Ross, 2016).
Apart from this House of Quality also looks like a house which has a correlated
matrix at its top and that specifies the demands and needs of customers and how the
product can satisfy the requirements. Henceforth, it can be said that House of Quality
differently shows how a product is designed by keeping the needs and demands of the
customers. Customers needs can be categorized into requirements that includes what is
required to customer. A list of requirements from customers and management. It is also
reported that there exists a cross functional integration within the organizations that are
using it and that happens especially among marketing, engineering and manufacturing
(Ross, 2016). Thus, moving on to this dimension, it can be said that at Lego Group,
employers and employees are concerned about the voice of customer analysis tool which
holds much importance in Quality Functional Deployment. Therefore, in order to meet
the requirements of customers, Lego Group has been emphasizing on the following
aspects:
 House of Quality is used as a major chart of Quality Function Deployment
 It is also data intensive and is capable of capturing large amounts of information
in company’s processes (Razak, Rowling, White and Mason-Jones, 2016)
 The left side of the house represents customer’s needs
 Ceiling has the design features along with the technical necessities
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Illustration 1: House of quality

 The Roof is another matrix that shows the connection between different design
features. This is used for the purpose of showing how the requirements of the
design interact with each other (Burgess, Grimshaw, Huaccho Huatuco and Shaw,
2017).
 Competitive section is based on requirements of customers
 Last is the lower level foundation that shows that depicts the target values to rank
the ‘hows’. These actions are useful for the purpose of satisfying the customers.
Therefore using such technique aids Lego Group to emphasize more on customer
value as the toy products are highly associated with customer’s needs and preferences.
Moreover, in this respect it can also be said that the phenomenon not only enhances
customer value; but also it leads the business entity to focus on strategic and competitive
aspects which safeguards Lego’s position in external market place (Tatoglu and et.al.,
2016). The method is only being used to develop a good patch among the needs of
customers and the engineering variables. Henceforth, all the requirements and demands
of customers are accomplished with the help of emphasizing on quality associated facets.
2.
How is the supply chain structured? Map out the stages that you can identify and
organizations involved in each stage and functions they perform.
The house of quality begins with the customer's requirement which are called as
customer attributes. Every time customers are not the end users. Customer attributes
includes the regulators demand and the needs of retailers and the vendors as well.
According to House of Quality process, Lego group has determined its requirements for
supply chain and on that basis, quality facets are being included in the product
management. It is the prime responsibility of Lego Group to focus on customer’s
requirements as on that basis only the services of business are being managed (Zsidisin,
2016). Apart from this, there is a specific chart which needs to be followed on so that to
regulate all the functions of operations department. This is highly aligned with the
requirements of customers and at the same time this ensures to amend the ratio of
customer satisfaction
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 At the initial stage, data is collected about the aspects that are essential while
producing toy products at Lego Group. This includes identification of customer’s
requirements and accordingly toy products are being introduced in the market
place (Schönsleben, 2016). Data about the customers is collected from different
sources and at the same time it aids in bringing specific products and services at
the market place.
 Afterwards, focus is laid on the requirements of customers in which several other
processes like surveys and interviews are being conducted for communicating
and interacting with the end users (Afolayan, White and Mason-Jones, 2016).
This also includes direct communication wherein customers can specify what
they need from the business entity. Apart from this, it is also crucial for Lego
Group to emphasize on key components of quality management.
 Lego Group then accentuates on designing features and technical requirements so
that suitable toy products can be brought at market place. After that, the company
also focuses on aligning the requirements of customers with that to attributes of
products (Fredendall and Hill, 2016). Therefore, it clearly specifies that Lego
Group is entirely emphasized towards the requirements of end users. This is the
only way that is enhancing primary and supporting activities of operational
department of Lego Group.
 On the basis of ordinal measurement scale, employees of Lego group focuses on
customer’s perspective and accordingly several modifications made to the
product categories (Coyle, Langley, Novack and Gibson, 2016). Focus is also
being laid on competitor’s analysis.
 Several strategies and standards are being defined for the purpose of performing
each and every aspect of the business. Thus, considering this Lego Group focuses
on bringing more innovation in the toy products for satiating the requirements of
end users (Mangan, Lalwani and Lalwani, 2016).
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Source: (Wieland and Handfield, 2016)
Therefore, according to the discussion it is evident that Lego group is concerned
towards quality dimensions because the company focuses on customer orientation
approach. Thus, accordingly, Lego group has formed a series of relationships with
companies that buy and sell supplies from each other. This also assists Lego group to
develop more partners and establish new ventures (Christopher, 2016). However, in order
to improve the supply chain efficiency, members of Lego group are required to show
their agreement in increasing agreement. It does not change the organizational structure;
but it aids the business entities to buy and sell more products to each other. At the same
time it also helps in developing more formal relationships which enhances product’s and
business’s capabilities.
3.
How the concepts of variation, uncertainty, buffering mechanisms is related to the case
study. Role of supply chain in these practices
Supply chain management is an integral part of business and essential to company
and customer satisfaction. It boost ups the customer service and reduces operating
costs .Operation management as well as supply chain management both are regarded as
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Illustration 2: Supply Chain management

complex and dynamic field of management and both have changed the development
facets of Lego Group. According to scientific management, there has been a
revolutionary change in manufacturing practice which is broke down into diverse
components (Wieland and Handfield, 2016). This involves best practice of working
which were then also used as a standard process to produce appropriate products. This
has interrelationship with variation, uncertainty and buffering mechanism which
strengthens the practices of Lego Group. Supply chain management plays crucial role in
minimizing variations because that helps Lego Group to determine estimates about each
and every facet of the production department.
The provision of variation allows Lego group to focus on appropriate quantity of
production and at the same time, it also helps in emphasizing on different techniques of
managing toy products. Customers expect the correct and quantity product to be
delivered. They want availability of the product at desired location. Customer wants on
time delivery of product. Delays are not acceptable as customer satisfaction is the
priority. Moreover, in this context variation depicts the importance of changeability and
flexibility in the supply chain procedure (Fredendall and Hill, 2016). However, this is
also useful for the purpose of determining the role of flexibility and transformation in
production process. Hence, Lego group has been emphasizing on quantifiable parameters
so that to control variables in optimizing the conflicting trade offs. Basically, this aids in
cost optimization and cost minimization which is a competitive dimension for
encouraging ratio of sales. This scientific system also encourages the sales ratio and at
the same time, it divides the system in diverse parts to measure the value of each process
(Zsidisin, 2016).
Whereas, on the other hand Lego Group also focuses on Operations management
because it holds importance in undertaking strategic business choices. It is also closely
related to reducing the trade-off drivers. Thus, this helps in promoting the value of
continuous improvement that brings more success to Lego group. This also results in
variation by developing stable processes (Burgess, Grimshaw, Huaccho Huatuco and
Shaw, 2017). In this way, it can be said that improved quality enhances the productivity
and performance aspects which is vital to enhance customer value. At the same time,
other benefits such as customer loyalty and long term relationships with the business
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entity can be derived accordingly. Further, for long term benefits, the process also assists
in eliminating wasteful variations which subsequently leads to lean thinking.
Moreover, in this context the concept of agility needs to be stressed upon (Razak,
Rowling, White and Mason-Jones, 2016). This is a response to a dynamic market without
incurring on trade-off consequences. Nonetheless, flexibility also emphasizes on such
procedure as a central source of supply chain management. This includes product design,
distribution and customer’s requirements with a much more impact on business
development aspects. Another dimension that is focused in this concept is postponement
which is used to attain customization and efficiency within Lego’s operating system.
Therefore, it can be said that the interaction of customer data, operations and design
enable postponement strategies to customize products and other business standards
(Gilling and Ulmer, 2016). At the same time, it also enhances technical reach of Lego
Group which leads the business to focus more on product sustainability.
4.
How have competitive priorities influenced these three aspects
Source: (Wang, Gunasekaran, Ngai and Papadopoulos, 2016)
Competitive priorities of Lego group have influenced various dimensions of
business entity and that can be categorized into positive and negative aspects. In this
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Illustration 3: Competitive priorities

respect, three major aspects are being selected to showcase the influence of competitive
priorities. Supply chain includes the suppliers and services needs to a company for
manufacturing and distributing products. These structures vary from informal relationship
to supplier groups that are diverse to a joint venture. To increase efficiency supply chain
members can collaborate.
 Adoption of new technologies: Lego Group has been adopting new tools and
techniques to manage the business aspects and this happened because of
development of new technologies. Lego is greatly following all technologies so
that business services can be improved (Wang, Gunasekaran, Ngai and
Papadopoulos, 2016). This shows how Lego group have grown in terms of
development among different players. It is the adoption of technology only that
helped Lego to get the position of largest business entity in Toy making industry.
Around all over the world, the business has spread its operations which helped in
enhancing customer base and which also helped in facilitating more
development. Lego is also adopting new technologies as the business has great
concern towards competitive forces and also towards getting sustainability
benefits (Gilling and Ulmer, 2016).
 The type of buyer-supplier relationships that have developed: According to
current changes in supply chain management, various alterations are observed in
buyer- supplier relationship. Typically, this has downsized long chain of
distribution which leads the business entity to focus on those aspects only that
are essential in supplying a product (Zhou, Su, Yeung and Viswanathan, 2016).
Competitive priorities of Lego group have changed the relationship between
buyer and supplier and now the associated parties focuses only on acquiring the
products through convenient sources. In this way, it is clear that buyer as well as
supplier both holds more importance in organizational development of Lego
group. This also contributes in enhancing performance and productivity facets of
Lego group. Traditional sources of distribution have also been changed
accordingly (Razak, Rowling, White and Mason-Jones, 2016).
 Sustainability: Focus on competitive aspects have helped Lego group to attain
benefits related to long term sustainability and related benefits. With the help of
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this aspect, Lego group is focusing more on meeting the needs of customers and
for that the business critically emphasizes on quality methods. Similarly,
competitiveness has several provisions of business development; hence it is
being adopted by Lego group (Burgess, Grimshaw, Huaccho Huatuco and Shaw,
2017). Apart from this, competitive priorities of Lego group have been changing
and the business also focuses on competitor’s policy as well so that more
development can be facilitated. Regarding this, Lego group seems to be focused
on more globalization not only for business success; but also to reach maximum
number of customers (Schönsleben, 2016).
Thus, on the basis of above discussion it can be said that there are various factors
that helps Lego to grow and prosper. Chiefly, the business is focusing on product
optimization so that more value can be provided to the customers. Moreover, Lego
group is also changing its approach in logistics department and accordingly distribution
patterns are also transformed (Mangan, Lalwani and Lalwani, 2016). This shows
adoption of new tools and technologies for delivering suitable services to the customers.
All such aspects greatly contribute in enhancing customer base of Lego group.
CONCLUSION
Summing up the entire research study, it can be said that quality optimization is
the main aim of Lego group that aids the business to meet all the requirements of
customers. This not only gives customer related benefits; but also it aids in enhancing
long term benefits to the organization. Moreover, the study has also helped in analyzing
the importance of supply chain management in encouraging strategic facets of the
business entity. Thus, in order to support the description, it can be contended that
mapping of processes is vital because that helps in managing each and every aspect of
operation management. Quality seems to play major role in this aspect that aids Lego
Group to focus more diverse dimensions of operations management.
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