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Where is Lego made for each market and how is it distributed?

Si_UKNZSi_UKNZ NZMember Posts: 4,179
edited October 2012 in Everything else LEGO
I've pulled this idea from something that came up when discussing EOL dates in this thread:
http://www.bricksetforum.com/discussion/7185/flumpys-insight-into-sets-eol-in-2012-and-those-staying-on-for-2013#latest
The production and distribution is of particular interest regarding EOL dates as different factories might cease production earlier, and because I'm guessing that the only 'fixed' EOL date is the date when production stops (beyond that it's about depleting the stockpile).


According to Wikipedia there are 3 factories:
- Billund, Denmark
- Nyíregyháza, Hungary
- Monterrey, Mexico.
Although as we know there is one in "Asia" :)

Apparently "Brick decorations and packaging" are done at all these locations plus
- Kladno in the Czech Republic.

So does anyone know how Lego distributes stock from each of its factories?
For example does the European stock generally originate from the EU factories and the North Mexican stock from the Mexico factory?

Comments

  • HuwHuw Brickset Towers, Hampshire, UKAdministrator Posts: 6,712
    The 'Asia' facility is not a LEGO-owned one, AFAIK, they outsource production to a 3rd party.
  • CCCCCC UKMember Posts: 19,005
    Also PAB comes from Poland, doesn't it? So do they have a factory there that combines pieces made in the other manufacturing sites, or is that site just for sorting components for PAB?
  • y2joshy2josh Member Posts: 2,002
    ^All my PAB orders have originated in Denmark.
  • cheshirecatcheshirecat Member Posts: 5,332
    ^^^ Thats pretty much standard for almost all chinese production. They generally (if not always) insist on the factory being run by a chinese company, even if to all intent it is a TLG factory.
  • CCCCCC UKMember Posts: 19,005
    y2josh said:

    ^All my PAB orders have originated in Denmark.


    My last one has this tracking information:

    Event Date Event Time Event Detail Event City
    10/22/2012 13:23 Delivered
    10/22/2012 08:17 Pre-Scan for Delivery
    10/20/2012 05:26 Received from Partner Carrier
    10/19/2012 23:25 In Sorting Facility
    10/19/2012 23:08 In Sorting Facility
    10/19/2012 15:05 Departed Terminal Location
    10/18/2012 04:49 Shipment Tendered ,
    10/18/2012 04:49 Picked Up Strykow

    There is no indication on the packing slip where it came from, but the online tracking says it is Poland.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409

    ^^^ Thats pretty much standard for almost all chinese production. They generally (if not always) insist on the factory being run by a chinese company, even if to all intent it is a TLG factory.

    For that reason alone, I'd never have a factory in China. There are other countries to put production in, South Korea, Vietnam, India, Mexico, etc. While those counties each have their issues, they are easier to deal with.
  • bluemoosebluemoose Member Posts: 1,716
    edited October 2012
    Most regular bricks for Europe are manufactured in Billund & Kladno (afaik Kladno does brick moulding, not just decoration). The factory in Hungary manufactures Duplo, but for world-wide distribution. Most of the production in Monterrey, Mexico, is for NA sets. But there are exceptions. The Chinese production is licensed to 3rd party manufacturers; it used to be with a company called Flextronics, but not sure if they still have the contract from Lego.

    After the big investment in expanding production capacity in Monterrey last year, Lego have done the same with Kladno this year, again reinvesting a lot of their profits back into the company's infrastructure.
  • BrickDancerBrickDancer Dunes of TatooineMember Posts: 3,639
    edited October 2012

    ^^^ Thats pretty much standard for almost all chinese production. They generally (if not always) insist on the factory being run by a chinese company, even if to all intent it is a TLG factory.

    For that reason alone, I'd never have a factory in China. There are other countries to put production in, South Korea, Vietnam, India, Mexico, etc. While those counties each have their issues, they are easier to deal with.
    Its all very true. Oddly enough, its not all Asian countries that do this, just China all by its lonesome commits these practices. Our corporate policy (European Corporation) does not allow us to source any raw materials from China at all, absolutely banned all suppliers from there. But instead creating new plants and facilities in every country around them instead.. Thailand, Singapore, Indonesia and our newest regional HQ in Seoul, Korea.

    You hear the same story regardless of industry, biotech (my case), electronics, toys, etc. Its a cultural issue where acts deemed 'wrong' or 'competitively unfair' are justifiable to the common citizen or business manager. TLG needs to take their business to partners that play fairly and not abuse their IP with piracy. Its common sense after you take the 'cost savings' issue out of the picture. This is first hand experience as my previous company was Chinese managed with secret facilities in Shanghai that exported the product to the US office for QC testing and released as USA made goods. Couldn't bare their clandestine methods very long before leaving to a European-based team, where everything is on the up & up with a value placed on ethics. The difference is like night and day.
  • brickmaticbrickmatic Member Posts: 1,071

    This is first hand experience as my previous company was Chinese managed with secret facilities in Shanghai that exported the product to the US office for QC testing and released as USA made goods.

    Seriously?!? That's terrible. How common of a practice is this in the industry?

    Back on topic, my understanding of LEGO production is that making bricks is a slightly separate affair from making sets. Seems to me your bricks might be made in several places and then put into a set at only one site.
  • BrickDancerBrickDancer Dunes of TatooineMember Posts: 3,639
    edited October 2012
    Rough estimate at 10% and growing rapidly for companies under this business model in my part of the biotech industry. Where they do the testing or finishing steps in the US only to certify as domestic made. The unfortunate part is that we're in the 'active pharma ingredient' sector and mostly focused on the experimental clinical trial drugs, so you can see how precarious this is.

    Every year or two there's a crazy story. The sad part is people die in certain cases before its discovered, as in this first link. Second link is Chinese management ethics at play in the US in my specific field.

    http://www.prnewswire.com/news-releases/nolan-law-group-jury-finds-against-baxter-healthcare-in-nations-first-contaminated-chinese-heparin-case-123577429.html

    http://www.lawfuel.com/show-release.asp?ID=5582

    When this type of thinking is widespread and entrenched, you're playing with fire when you outsource IP and capabilities. TLG is finding that out with all those fake Ninjago sets floating into the market, not too mention the proliferation of clone companies that recreate older EOL sets. Santa 'Frisco' Fe Train anyone?:

    http://www.ebay.com/itm/629-Enlighten-Building-Blocks-Train-city-Toy-Heavy-Duty-Freight-Locomotive-378P-/221050822003?pt=Building_Toys_US&hash=item3377a7dd73
  • DougoutDougout Member Posts: 888
    ^Wow, I knew there was tons of chinese knock offs all over ebay, but I didn't know there was fake Legos too. I was VERY disappointed when I found out TLG produced bricks in China. I don't care if it's just for prints or small bricks, it's wrong. TLG should know better and I thought they had a much higher level of respect for their bricks to be made in China.

    Especially at an economic time like this, outsourcing is despicable. I will show faith TLG will come around soon.
  • Si_UKNZSi_UKNZ NZMember Posts: 4,179
    There's a frightening amount of cruddy enlighten knock-offs out there

    http://www.ebay.co.uk/sch/Toys-Games-/220/i.html?_sac=1&clk_rvr_id=402615803091&_from=R40&_nkw=enlighten
  • CCCCCC UKMember Posts: 19,005
    Dougout said:


    Especially at an economic time like this, outsourcing is despicable. I will show faith TLG will come around soon.

    What do you mean by outsourcing? This is an international product. Is outsourcing outside of the US? Denmark? The West?
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    Outsourcing is making stuff other than where it is consumed... or where living conditions and rights are not greater than, or equal to where it is consumed.

    I don't consider Denmark made bricks to be outsourcing because Denmark is a 1st world nation with rights and respect for people. It doesn't hurt my feelings one bit to buy LEGO made in Denmark.

    It should NOT be made in China... Even Mexico is questionable, but I understand that one, the Mexicans can be reasoned with at least.

    No disrespect intended for actual Chinese people, many of whom are perfectly nice hard working people, my feelings are directed at their government.
  • graphitegraphite USMember Posts: 3,263
    Typically "outsourcing" is having someone else do something for you that you could do, or used to do, and in some cases already do, but the other people can do it cheaper, faster, more efficiently than you can arrange for yourself. Most of the time the cheaper, faster, more efficiently are trade-offs of quality.

    China is notorious in today's manufacturing for being able do to stuff cheaper and faster mainly due to inferior materials quality and the poor practices of the country in terms of labor laws/protection. I think a lot of the electronics outsourcing ends up being "cheaper" overall in China due to them controlling something like 99% of the worlds rare earths which a lot of are used in electronics.
  • brickmaticbrickmatic Member Posts: 1,071
    ^ That's not the definition of outsourcing! By that definition, any export business would be outsourcing. Outsourcing is the contracting out of a business process, which an organization may have previously performed internally or has a new need for, to an independent organization from which the process is purchased back as a service. Often people say outsourcing when they mean offshoring, which is moving a business process to a different country. TLG being a Danish company means that anytime it moved production outside of Denmark it was offshoring. Like when TLG moved production to the United States. It was ironic when workers in the US lamented about outsourcing when US production was moved to Mexico since the original move to the US was outsourcing (or more precisely offshoring). The problem with Chinese production is that it is done by third parties. All the other factories that make LEGO bricks are owned and operated by TLG.
  • DougoutDougout Member Posts: 888
    edited October 2012
    Offshoring to China then, or any other country solely for the reason of saving some money. I don't like companies moving production to areas with crappy business practices and I respected TLG more when they didn't work with China. There may be no way to tell, but I thought the quality of the bricks produced in China is lower than the bricks made in other parts.
  • brickmaticbrickmatic Member Posts: 1,071
    edited October 2012
    ^ Actually, the reason for the move to China is not to save money but to meet demand.

    http://www.bricksetforum.com/discussion/545/production-info

    From the LEGO Ambassador forums:
    The main driver for the decision is capacity. We currently do not hold the capacity in Billund to mould, assemble and decorate the number of minifigures needed currently. We are in the process of expanding capabilities but as the sales keep increasing we have a hard time to keep up with demand.
  • seonadancingseonadancing Member Posts: 92
    When you look at the tag for the keychains, it shows there that it is made in the Philippines. We know that the keychains are not made here, so maybe it's only the tag that is actually printed here, or the metal part of the keychain.
  • monkeyhangermonkeyhanger Member Posts: 2,939
    It could be just a matter of time until we see £300 UCS MF knock offs. Are these blocks appreciably worse quality than those of TLG or are they being made "on the side" at a plant approved by TLG for outsourced product?
  • DaddyDeuceDaddyDeuce Member Posts: 272


    It could be just a matter of time until we see £300 UCS MF knock offs.

    There are only a handful of parts in the UCS MF that are hard to come by. If someone produced duplicates of just those parts, and then bricklinked the rest out of genuine LEGO, it could be very hard to detect.

  • stoneboistoneboi Member Posts: 42
    actually it is already very admirable for TLG to avoid manufacturing in china other than specific minifigs and CMFs after all these years when almost all the big cosumer products companies have stuff made in china...
    Is that why LEGO is so expensive and its prices keep rising?
  • brickmaticbrickmatic Member Posts: 1,071
    edited October 2012
    Actually, real prices of LEGO has dropped over time. Prices keep rising because of inflation. Let's say you want a fire station. In 1981 that would be #6382 for $25. But in 2012 dollars that is really $63.64 for 390 pieces, or 16.318 cents per piece. In 1990 you'd get #6389 for $52. But in 2012 dollars that is really $92.07 for 533 pieces, or 17.274 cents per piece. Now fast forward to a few years ago in 2010. You'd get #7208 for $80. Wow, nominally we've gone from spending $25 to $80. However, in 2012 money it's $84.90 for 662 pieces. That means in real money we've gone from about 16.5 cents a piece to just under 13 cents a piece.

    My guess is the new 2013 station will be around $85, which would mean real prices are about stable. We'll get a better idea when the actual piece count and price comes in.

    But I agree, it is admirable that TLG has kept a lot of its manufacturing onshore.
    aimlesspursuits
  • Si_UKNZSi_UKNZ NZMember Posts: 4,179
    edited October 2012
    ^ INteresteing stats but how does that explain very recent rises like the fire brigade vs the other modulars?
  • brickmaticbrickmatic Member Posts: 1,071
    edited October 2012
    ^ Let's see....

    Cafe Corner in 2007 would set you back $140. But in 2012 dollars that is really $156.24 for 2056 pieces, or 7.599 cents per piece. Fire Brigade in 2009 would set you back $150. But in 2012 dollars that is really $161.80 for 2231 pieces, or 7.254 cents per piece. In 2012 you can buy Town Hall. It would be $199.99 for 2766 pieces, or 7.230 cents per piece.

    So we went from $140 to $200 nominally for each set, but from 7.6 to 7.2 cents per piece in real dollars.
    Si_UKNZ
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    Yes, it is so easy to not do the math and just look at the total, or to not consider that just 5 years of inflation does matter.

    Of course, the US Government keeps saying there is little to no inflation, but who are they kidding?
  • BumblepantsBumblepants DFWMember Posts: 6,514
    Wow, Our money sure does suck. Too bad salaries never come close to adjusting as quickly as that
  • Si_UKNZSi_UKNZ NZMember Posts: 4,179
    ^^^ Brickmatic, that's very enlightening, thanks!
  • brickmaticbrickmatic Member Posts: 1,071
    Just to be clear, the increase in price for modulars is both because of inflation and the increasing size of the sets. There was an 11.6% change in the real value of money between 2007 and 2012, whereas there is a 42.9% change in price between Cafe Corner and Town Hall. The difference is because the piece count increased by 34.5%. That's an extra 710 pieces, which is a lot. The fire station from 2010 had less pieces than that.
  • stoneboistoneboi Member Posts: 42
    if only salaries keep in pace with inflation...
  • stoneboistoneboi Member Posts: 42
    $150 modulars becoming $200 modulars in future will be painful!!!
  • doriansdaddoriansdad CTCMember Posts: 1,337

    There was an 11.6% change in the real value of money between 2007 and 2012

    Use headline inflation rather than core inflation and you will see you are quite far away from the real answer.

    “It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” Henry Ford
  • stoneboistoneboi Member Posts: 42

    There was an 11.6% change in the real value of money between 2007 and 2012

    Use headline inflation rather than core inflation and you will see you are quite far away from the real answer.

    “It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” Henry Ford
    there are different inflation benchmarks depending on the reporting party's agenda ....for example, inflation basket tracks only a few necessities or a broad range of items from petrol to milk powder....
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    ^ and ^^ - Both are very true... And Henry Ford was 100% correct...

    The entire thing is a game, just a big game with large numbers... So long as everyone believes in the system, it works. If that ever changes... Well, ouch. :)
  • brickmaticbrickmatic Member Posts: 1,071
    @doriansdad Headline inflation is volatile. Core inflation gives a better view of long term trends. It's silly to think either metric is any less real.

    @LegoFanTexas Ah, I see you are a fan of game theory! You're absolutely right, our monetary system is a form of coordination game with large numbers of actors involved. Thankfully, since we're able to have plenty of communication and signalling mechanisms about this, we're able to maintain the current Nash equilibrium. No need to worry about the system failing because of lack of belief!
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    ^ It does help quite a bit to have such a large number of actors involved, it spreads the game across enough people that you don't have to do business with the same counterparty over and over to make it work.

    The system does work, but I also believe it works best with ongoing light inflation. Being predictiable is almost more important than anything else in such a game, what you don't want is a repeat of the 70s-80s stagflation, that was painful. A slow and steady rise in prices over time that everyone can just count on, makes it a safer game for all I think.

    Hard to plan 20 years out when inflation is swinging wildly. This I think is also one of the problems our current government has, they don't plan long term, all their decisions are made year to year. Part of that is because of the constitution, it has rules about budgeting for more than a year at a time. Part of it is due to election cycles.

    It would be interesting, given modern communications and technology, to allow our government to produce 10 year and 20 year budgets instead of 1 year budgets, with 50 and 100 year projections based on the 10 and 20 year budgets.

    It would induce more long term thinking if nothing else.
  • YellowcastleYellowcastle Member Posts: 4,401
    Does anyone know if production has shifted at all from what @bluemoose noted in late 2012? Where are we with the China facilities?
  • KiwiLegoMeisterKiwiLegoMeister New ZealandMember Posts: 212
    Its a little out of date now, but from memory, the Clikits range were all made in China.
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