Group 5 Drew Cheever Andrew Hoekenga Seth McVittie Rachael Stevens Danielle Veltema

1. Group 5 Drew Cheever Andrew Hoekenga Seth McVittie Rachael Stevens Danielle Veltema Chris Young

2. LEGO’s History • Lego bricks from 1963 still interlock with those made in 2007 • Manufactured to exacting degree of tolerance • “clutch power” • Manufactured from acrylonitrile butadiene styrene (ABS) • Precision-machined, small capacity molds • Human inspectors check output capacity molds • About 18 bricks out of every million fail to meet the standard required • Average approximately 20 billion/year or about 6,000 pieces/second • 2006 announce restructuring of current production set up • Outsourcing of some production to Flextronics

3. LEGO Product Quality & Safety • “Our aim at the LEGO Group is to exceed customer expectations with regard to our products, service and their experience of the LEGO brand.” • Focus on the customer’s perception of quality

4. LEGO Group aims to Lead on Quality • All play material must satisfy all national & international toy standards • Meet expectations of quality and safety that consumers can reasonably demand of design, play patterns and foreseeable use. • Meet standards of plastics on toys, food packaging & raw materials • All products carry LEGO symbol • Use of ABS plastics, only material used by LEGO

5. LEGO Product Quality • At Asian part suppliers, LEGO regularly inspects parts, and finished good suppliers the company inspects products and the environment in which they are produced on a weekly basis. • At European part suppliers, outgoing and incoming inspection is made, and the carries out weekly inspects of the finished goods.

6. Quality Control Process • The Four PP’s • Quality by Heart • What are they and how are they used

7. The Four PP’s • Play Promise: Joy of Building, Pride of Creation • People Promise: Succeed Together • Partner Promise: Mutual Value Creation • Planet Promise: Positive Impact

8. Partner Promise

9. Quality by Heart?

10. Compared to Juran Juran Lego • Directing Quality (Senior MGT) • Training all in Quality • Continuous Improvement • Reporting Progress • Involving Workforce • Revise Reward System to Include Quality

11. So all of this is good, BUT HOW IS IT USED

12. Two Great WaysLego Is Implementing Its Process • TRAINING 2.INCLUDING STAKEHOLDERS

13. Training • Lego has implemented a Quality Management System Exercise Called “LEGO RACERSTM” The purpose is to recreate the same desired outcome of cars going down a ramp.

14. As simple as the Exercise is--- • Team Building is accomplished • Appreciation for Quality • Scientific Methods are reaffirmed • Employee Moral is established

15. Including Stakeholders • Children and Parents are able to go to DESIGN BY ME and create their own LEGO products • Customer Surveys • Comments • Recalls • Continuous Transparency

16. Quality Awards • Hundreds of Awards • Excellence • Commitment to Quality in Research, Design, Testing and Development

17. List of Awards Products • duplo • BIONICLE • Clickits • Lego Harry Potter • Lego Technic • City • Alpha Team Awards • National Parenting Center’s Seal of Approval • Platinum Seal • Best Toy Awards • Seal of Excellence • Silver, Gold, and Platinum Awards

19. Quality Statistics • Note 2008 2007 • Play Promise • Number of product recalls 0 • 0 0 • Consumer Complaint Call Rate ≤ 0.125% • 0.123% 0.124% • Net Promoter Score Index 117 • 120 115 • People Promise • 1 Number of employees 7,337 4,723 • 1 Female 46.7% 52.5% • 1 Male 53.3% 47.5% • Average age 38.2 • 2 Rate of employee turnover 10.8% 12.9% • Sick leave ≤ 2.9% • 3.0% 3.2% • 3 Number of injuries with absence 35 52 • 4 Injury rate pr. million work hours ≤ 6.0 • 4.4 8.0 • Absence rate due to injuries ≤ 0.3 • 0.25 0.37 • Employee Pulse • – Commitment * ≥ 77 • 77 78 • – Personal Leadership ≥ 77 • 76 76 • – Empowerment ≥ 85 • 81 81 • – Setting a clear direction * ≥ 76 • 75 74

20. McDonald’s Recall (1986) • McDonald’s was running a four week promotion of LEGO Building Sets for children three and older. • DUPLO Building Sets were provided for children under three years old. • During the first week of promotion, some McDonald’s may not have had DUPLO Building Sets available for children under three.

21. McDonald’s Recall (1986) • McDonald’s and the U.S. Consumer Product Safety Commission asked customers with children younger than three who received LEGO Building Sets at McDonald’s Restaurants between October 31 and November 7 to exchange them for DUPLO Building Sets. • The LEGO Building Sets had been safety tested and met all mandatory and voluntary toy regulations. However, these sets contain small parts which could present a hazard if given to children younger than three. • The LEGO Building Set package had a warning on the front panel that the Building Sets contain small parts and are not intended for children younger than three.

22. Toy Truck Recall (2006) • Name of Product: LEGO EXPLORE Super Trucks • Units: About 358,000 • Manufacturer: LEGO Systems Inc., of Enfield, Conn. • Sold at: Various retailers nationwide • Manufactured in: United States

23. Toy Truck Recall (2006) • Hazard: The plastic wheels on the truck can detach, exposing a metal axle. This poses a puncture hazard to young children. • Incidents/Injuries: There were ten reports of a wheel detaching. Two children received serious puncture injuries resulting from the exposed metal axle. Another child fell when the wheel came off the toy truck. • Remedy: Consumers should stop using the recalled toy trucks immediately and contact LEGO Systems Inc. for information on receiving a refund.

24. Remote Control Recall (2009) • Name of Product: Power Functions IR Remote Controls • Units: About 1600 • Manufacturer: LEGO Systems Inc., of Enfield, Conn. • Sold through: LEGO catalogs and online at LEGO.com from April 2009 through May 2009 for about $13 • Manufactured in: China

25. Remote Control Recall (2009) • Hazard: The batteries in the remote controls can overheat, posing a burn hazard to consumers. • Incidents/Injuries: LEGO Systems Inc. has received four reports of batteries overheating. No injuries have been reported. • Remedy: Consumers should immediately stop using the recalled remote controls, and contact LEGO Systems Inc. to determine if their unit needs to be replaced. Consumers with defective remote controls will receive a replacement product. LEGO Systems Inc. is directly contacting consumers who purchased this product.

26. Recall Issues • McDonald’s Recall • Distribution/Supply Chain • Toy Truck/Remote Control • Poor Design

27. Customer Service • They have a great customer service which is easily accessible online. • Replacement parts • Help topics support center • Production recalls • This area list any production calls by area and LEGO part • Survey • Used to rate their customer service • Example: Why did you visit the LEGO Customer Service web area? (select the one answer that is most applicable)

28. Conclusion • What are they doing right? • Customer Focused • High Degree of Transparency • Limited Quality Issues-High Response Times • What could they change? • Communication with Trading Partners • Simplify Quality