36 SCS:THE EUROPEAN SUPPLY CHAIN EXCELLENCE AWARDS 2008 DECEMBER 2008 SUPPLY CHAIN STANDARD
www.supplychainstandard.com
Shortlisted
Argos in partnership with
Kuehne + Nagel
BT Supply Chain
Donaldson Europe BVBA
Ekol Logistics
Electrabel
Ikea Distribution Service
NikeStore in partnership
with Menlo Worldwide
Logistics
SEW Eurodrive GmbH
& Co KG
The Lego Group
Alan Cross (far right),
Kewill’s vice president of
professional services for
Europe, presents the Award
to The Lego Group’s Lars
Kjaerboelling (2nd right),
director of strategic projects,
(from left), Jesper Toubøl,
director, global customer
logistics, Peter Husted,
director, global transports,
Bo Helmar, director DC
operations Europe.
Logistics & Fulfilment Sponsored by Kewill
Winner
The Lego Group
Logistics and fulfilment is a core element of supply
chain management, so of all the categories this is
the one where virtually all our entrants could have
made a worthy contribution – and indeed, nine of them
did. Contenders for the prize were: Argos in partnership
with Kuehne + Nagel, BT Supply Chain, Donaldson
Europe BVBA, Ekol Logistics, Electrabel, Ikea
Distribution Service, NikeStore in partnership with
Menlo Worldwide Logistics, SEW Eurodrive GmbH & Co
KG, and The Lego Group.
Across this long list there were many examples of good
practice and a high degree of competence, but the judges
were looking for excellence and this narrowed the focus to
three entries: Electrabel, NikeStore in partnership with
Menlo Worldwide Logistics and The Lego Group. All three
were very high scoring with barely a point or two between
them, which made it difficult for the judges. However, a
winner had to be found.
As described in more detail in the Public Sector,
Services & Utilities category, Electrabel has transformed its
supply chain over a two-year period from a cost-plus
operating model to one based on availability. The
Belgium-based power generation company has centralised
fast moving parts in a new national warehouse serving 15
power plants, a project that has resulted in a ten million
euro reduction in inventory and a payback on the project
within 18 months. This was a strong entry, but the huge
demands brought about by NikeStore’s ambitious growth
plans, and the radical transformation and global scope of
The Lego Group’s entry narrowed the focus still further.
It is predicted that three per cent of all retail sporting
goods purchases in Europe will be transacted online in
2008 and this figure is expected to grow exponentially as
broadband penetration increases. Nike’s online presence
at NikeStore.com has been established to respond to this
growing demand and with its logistics service partners,
Menlo Worldwide Logistics, an agile supply chain has been
created, centred on its Laakdal distribution centre in
Belgium. This 18-month programme to manage growth
involved the implementation of lean operations, strategic
supplier relations and deep collaboration between the two
organisations to ensure that practices and operations were
standardised across the two companies. In addition,
customer segmentation was undertaken to create gold,
silver, and bronze service levels which are being satisfied
at a high rate. Kaizen improvement on the shop floor has
also achieved sound results.
Again, this was all good stuff, but the judges decided
that the sheer scale and scope of the Lego entry, backed
up with a comprehensive set of impressive metrics,
determined the final result.
The Lego Group has been on a four-year journey to
transform the business, and this turnaround has centred
on the supply chain. Ten operations have been
consolidated into one global logistics service centre
Customer satisfaction has improved
dramatically, responsiveness
has increased, very significant
savings have been made and
the strategy is fit for the future.
located in the Czech Republic, serving 130 countries
around the world on a five-day delivery basis. The number
of logistics service providers has been cut from over 100 in
2004 to just 15 today, and a new agile, customer facing
supply chain has been created with delivery performance
rising dramatically.
The judges say, “Lego has really transformed its entire
logistics and distribution model. The company has
improved capacity while flattening off peaks in demand
and it has achieved this through the way it plans and
distributes its product. Customer satisfaction has
improved dramatically, responsiveness has increased, very
significant savings have been made and the strategy is fit
for the future.” This is an example of where a logistics
transformation has secured the future growth potential of
the organisation. The scale and global scope of this
transformation, its methodical implementation, and the
success in achieving set objectives secured the Logistics &
Fulfilment Award for The Lego Group.
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