Electronics Production | November 28, 2006

Flextronics under pressure from Lego

Lego increases its outsourcing but while Lego is outsourcing more and more of its products the manufacturing issues have also increased. Lego puts its suppliers under pressure as the suppliers often don't receive the correct requirements specification.
Lego's outsourcing hasn't been as easy as the company expected and when the problems occur it is the contract manufacturers that have to pay the price. Flextronics is one company that has been put under heavy pressure.

"Is has been harder than expected to implement new suppliers. In short term this doesn't cost Lego anything it is the suppliers that have to take the bill if the manufacturing doesn't run as it is supposed to", says the Lego boss Jörgen Vig Knudstorp.

He stressed that this is unsustainable in the future as the relationship with the contract manufacturers are long-term partnerships.

Lego's quality demand on the contract manufacturers is often unreasonably high.

"It is like teaching a five year old riding a bike without extra wheels. It has in a higher grade than expected been necessary to run after the bike with a stick attached to it to prevent the child to fall", said säger Jörgen Vig Knudstorp.

However Knudstorp admits that Lego isn't completely out of guilt in this matter. Many times has Lego provided Flextronics and the other contract manufacturers with insufficient manufacturing requirements and declarations. This has lead to that Flextronics even has problems with its profitability of the Lego order.


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