LEGO Group outsources logistics to DHL
- DHL Solutions to operate LEGO Group's single European distribution center
- Distribution to LEGO customers throughout Europe and to LEGO distribution centers outside Europe (except North America)
The LEGO Group, one of the world's leading manufacturers of play materials for children, will centralize its European distribution center (EDC) in Prague, Czech Republic, and outsource its European operation to DHL Solutions. DHL will open and begin operating its new and customized logistics center in early 2006.
Following an analysis of its structure, the LEGO Group announced on 31 August 2005 that it plans to discontinue its five distribution facilities in Flensburg and Hohenwestedt (Germany), Billund (Denmark), Lyon and Dunkerque (France) and to concentrate its European distribution operation in Jirny, 10 km east of Prague.
The new European distribution center will handle distribution to LEGO customers in Europe and to LEGO distribution centers throughout the world (except North America). The project will consist of two phases whereby phase 1 will be a warehouse of 28,000m 2 which is now under construction and will be operational by mid December. Phase 2 will be the construction of a similar size building to be operational by mid March 2006. The total site will be one main logistics center of total 56,000m 2 and will be one of DHL Solutions bigger facilities in Central Europe. In full operation, planned early 2007, the LEGO activities will occupy 51,000m 2.
The center's activities include inbound and outbound logistics, storage and value added services such as assortment packing and customization. The Jirny site is going to be one of DHL Solutions' strategic locations from where DHL is offering the complete range of logistics services to the market.
"DHL Solutions is an expert in logistics solutions, and is dedicated to outstanding performance in logistics," said Egil Møller Nielsen, LEGO Group Head of Global Distribution (Europe, Asia & Emerging Markets). "This and DHL's global and local coverage are the main reasons why we chose DHL." The LEGO Group and DHL have signed a contract for 5 ½ years.
"We are convinced that we will achieve significant benefits from outsourcing and centralizing our logistics operations at the DHL Solutions center in Jirny. The substantial gains in the quality of our logistics and product flow will support our leading brand position," said Mr. Nielsen. "Most importantly, our products will reach our customers on time, without defects and cost efficiently."
Igor Zahradnícek, Managing Director of DHL Solutions Czech Republic and Slovakia, emphasizes the importance of the LEGO contract. "There are not many European distribution centers in Prague, and certainly not many that handle such a large volume. We are very proud of the fact that the LEGO Group places its trust in DHL. Further Mr. Zahradnícek said: "The scope of the LEGO contract will allow us to grow and expand our business significantly. It is our intention to operate the site in Jirny as a multi-client operation."