Scribd
Upload
385 views2 pages

Lego Group Forecasting Techniques

opm

Uploaded by

Aqsa tariq
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
385 views2 pages

Lego Group Forecasting Techniques

opm

Uploaded by

Aqsa tariq
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

The major demand for Lego is around the holiday season of Christmas.

However, due to brand


partnerships with brands such as Star Wars and Disney, it is hard to predict demand or the
lifecycle of the product because of shifting customer mindsets.

Lego’s inability to forecast properly led to shortages of Lego sets during peak holiday period in
the European and North American markets.

The inability to forecast sales led to poor inventory management, increasing work-in-progress
inventory by 30% in 2016. Work-in-progress inventory makes up 70% of the total inventory
while competitor Mattel only has 18%. Inefficient distribution strategies for small, private outlets
compared to larger outlets has added to this.
Lego now uses in house developed artificial intelligence statistical forecasting and in house
developed demand planning end user portals.
The LEGO Group uses a combination of techniques to forecast demand for their products. These
techniques include:

1. Historical Data Analysis:


LEGO analyzes past sales data to identify patterns and trends in demand. They consider factors
such as seasonality, product launches, and promotional activities to understand how demand has
behaved in the past.

2. Market Research:
LEGO conducts market research to gather insights on consumer preferences, trends, and
purchasing behavior. They may use surveys, focus groups, and other research methods to
understand customer needs and preferences.

3. Sales and Retailer Data:


LEGO collaborates with retailers and collects data on sales, inventory levels, and customer
feedback. This data helps them understand how their products are performing in the market and
make informed decisions about future demand.

4. Collaborative Planning, Forecasting, and Replenishment (CPFR):


LEGO works closely with their retail partners to share information and collaborate on demand
forecasting. This collaborative approach helps them align their production and distribution plans
with the expected demand.

5. Predictive Analytics:
LEGO utilizes advanced analytics and predictive modeling techniques to forecast demand. They
may use algorithms and machine learning to analyze various data sources and generate accurate
demand forecasts.

LEGO has built a more Adaptable supply chain by:

– Monitoring economic changes, especially in developing markets.

– Understand the needs of the final costumers. Gauge their interests and what they look for in the
product.

– Develop and foster more supplier relationships.

– Understand product design impacts the supply chain and ensure standardization and
postponement techniques are employed.

Lego also focuses on using demand forecasting strategies like Qualitative methods such as
Market Surveys or Jury of Executive Opinion and Quantitative Methods such as Moving
Averages and Trend Projection.
By developing Agility improving Adaptability in its supply chain, Lego will be able to better
respond to the changes in supply and demand in the market. Through implementing proper
demand forecasting and understanding consumer behaviour, the company will be able to focus
on products in the portfolio that have higher demand. Through nearshoring and developing
complete centres in its key markets namely Europe, Asia and America, it will be able to deliver
products in time. This also assists in analysing demand during the holiday season. Agility and
Adaptability helps serve markets such as Europe and North America that are currently struggling
in terms of order fulfillments. This also ensures less time and money spent on logistics of
delivering product from the Asian factory to these markets. This allows each facility to properly
cater to its market and Lego can ultimately deliver its high-quality toys to children across the
globe to foster creative thinking. This aligns with the company’s mission, vision and motto.

Another major improvement of the supply chain, was to change the entire transportation
network. They closed a bunch of warehouses around Europe and moved its main distribution
center to Prague. This now allows LEGO to be closer to the customers in terms of delivery,
which is crucial because of the constant shift in product demand

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy