Rebuilding LEGO: A Success Story
Some key points of the piece (for those who'd rather pass on the complete article):
Through a series of management moves, LEGO:
1) Reduced its number of vendors and made larger, more regular purchases from each one, enabling it to leverage the company's scale with suppliers.
2) Better coordinated the production within its mold machines, resulting in better utilization and increased capacity.
3) Decreased fulfillment costs at their distribution centers by bundling orders in larger shipments.
4) Rationalized their production cycles into 4-to-12-week increments (instead of making every machine available to produce any element at any time).
5) Relocated its factories near its most important markets (e.g., Europe), thereby decreasing its distribution costs.
All of this means that, when dealing with LEGO, you'll (hopefully) get what you want when you want it.