LEGO Group outsources logistics to DHL
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 28,000m2 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 56,000m2 and will be one of DHL Solutions bigger facilities in Central Europe. In full operation, planned early 2007, the LEGO activities will occupy 51,000m2.
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 M*ller 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 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 Zahradncek, 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. Zahradncek 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."
About the LEGO Group
The LEGO Group is a privately held, family-owned company, based in Billund, Denmark. It was founded in 1932 and today the group is one of the world's leading manufacturers of play materials for children, employing approximately 7,400 people globally. The LEGO Group is committed to the development of children's creative and imaginative abilities. LEGO products can be purchased in more than 130 countries.
LEGO and the LEGO logo are trademarks of The LEGO Group. 2005 The LEGO Group.
About DHL
With annual revenues of over *24 billion in 2004, DHL is the global market leader of the international express and logistics industry, specializing in providing innovative and customized solutions from a single source. DHL offers expertise in express, air and ocean freight, overland transport and logistics solutions, combined with worldwide coverage and an in-depth understanding of local markets. DHL's international network links more than 220 countries and territories worldwide. Over 170,000 employees are dedicated to providing fast and reliable services that exceed customers' expectations. DHL is 100% owned by Deutsche Post World Net.
Deutsche Post World Net is the world's leading logistics group.
Its integrated Deutsche Post, DHL and Postbank companies offer tailored, customer-focused solutions for the management and transport of goods, information and payments through a global network combined with local expertise. Deutsche Post World Net is also the leading provider of Dialog Marketing services, with a unique portfolio of efficient outsourcing and system solutions for the mail business. Some 380,000 employees in more than 220 countries and territories worldwide generated revenue of *43 bn in 2004.
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