(bv). Lego‘s concept and product development takes place primarily at the company’s Billund headquarters in Denmark. But the Group also has listening posts in Munich/Germany, Los Angeles, and Tokyo in order to monitor the latest market trends. The creative core is made up of 120 designers representing about 19 different nationalities. Manufacturing sites are in Denmark, the Czech Republic, Hungary, and Mexico. Essentially, the product development process is a conventional stage-gate process divided into several phases. It is very much driven by two big events during the year: Spielwarenmesse International (Toy Fair) in Nuremberg/Germany in January and Toy Fair New York City in July. In November, the freeze of the product portfolio for the upcoming year takes place. After the creative-driven concept phase a more milestones-driven phase follows in which a division is made in first half-year product launches and second half-year ones. Not only the products themselves have to be carefully considered but also the packing, like the breakdown of the building blocks in pouches or the design of the package, is part of the elaborate development process. Each year, around 220 new products are developed but as Lego’s PLM Architect, Edwin van Kouwen, emphasized in his presentation at the last SAP PLM Conference in Hamburg/Germany at the end of September 2011: “We want to grow this number significantly, but at the moment this is not possible because we are hindered by our legacy systems.” And to keep the competition at distance a carefully design intellectual property protection mechanism is necessary. But it would go far beyond the scope of this article to give a more detailed description of Lego’s development process with its eight streams including 66 decision points and its innovation generation strategy.
Gathering, sharing and protecting information
At the beginning of 2010, an initiative called “Backbone PLM Program” was launched to put into practice a new PLM strategy based on solutions provided by SAP AG headquartered in Walldorf/Germany. It was split up into three major projects:
By the end of 2012, all projects should be finished. The part for product, mould and equipment information management is more of a conventional type of ERP implementation journey like EBOM and MBOM management. Also affected is the best online casino sites maintenance management of the manufacturing plants. The PLM part is focused on the part projects “product plan”, “project execution roll-out”, “portfolio management”, and “PPM dashboard”. The whole project is running over 20 months and should be finished right now. At the end of each implementation step a series of dashboard projects are initiated. These dashboards will be used to consolidate and publish information through Web front-end applications. Mr van Kouwen described the future backbone PLM on the basis of a so-called Conceptual Scope Model. Through a portal application, information like that concerning the element or product level (e.g. BOM or material master data), and that on a project and portfolio level is provided. Access for the different target groups (Lego employees, external partners, pilot customers) will be provided by the SAP PLM Dashboard, SAP Enterprise Portal (in version 7.3) — only to display specifications and documents, and PLM business warehouse applications like Link Reports, in each case depending on the role of the user in the product development process. As Mr van Kouwen mentioned, IP protection is a big issue at the Lego Group: “With our solution we control that the people in the R&D department have let’s say a 2.5 year horizon whereas I am as a member of the IT department only can see current products.“ The corresponding security concept can be illustrated in a pyramid with three levels in which SAP Galaxy takes the role of back-end managing authoring objects for the user role and rights management. SAP Galaxy is an extension of the Netweaver technology to implement business process management scenarios. On top of Lego’s ERP solution, such a dedicated SAP Business Rules Management will perform its duty. “This helps the users to create correct data e.g. with consistency checks, a lot of auto fills and autoroute mechanisms from our design plant into our operational plant,” the PLM Architect explains.
A journey with a lot of impressions
Mr van Kouwen’s presentation closed with remarks about what was gained and was learnt. “We have introduced a common language. We used to speak about items and materials, about BOMs and structures within Lego. Right now, we have standardized this communication. We also start sharing information much earlier in the design process, already with our supply chain partners. So, they can plan better as well.” Moreover, SAP Enterprise Portal acts as a common access point for different systems, like ERP, BRM, and PPM. And not to forget: business rules are no longer hidden anymore. Before they were located in a lot of different systems. Now they are on the table at once when needed. Mr van Kouwen got to the point: “We have implemented a single source of product information.”