How Lego boosted sales despite supply constraints

7 October 2020

Leaders should “steer the ship” through a crisis and avoid making key strategic decisions fuelled by emotion, a conference was told.

Carsten Rasmussen, chief operations officer at Lego, told delegates the strategic decisions the firm could have made early on in the Covid-19 pandemic would have been “very different” to the decisions made in August. 

Speaking at the Gartner Supply Chain Symposium, Rasmussen said: “One thing that's very important as a leader when we are in situations of crisis is to steer the ship through the storm. Make sure the ship gets out safely. 

“Do not start making strategic changes because the likelihood that you're making the wrong decision is very high because you're controlled by emotion.”

In the early weeks of the pandemic Lego faced supply constraints, like many organisations, while demand rose for its products. 

Rasmussen said Lego was able to establish a “control tower” to “see what the situation was in our supply chain, where we have bottlenecks, where we have potential risk and where we have opportunities”. 

“We are a global team in many different time zones, but we met every single day to ensure we were on top of what was happening in the world. For example, at the same time [as the pandemic hit], demand for our products also went up. 

“All of a sudden, we had capacity constraints and we had a demand that was flying. It's a fantastic challenge to have, but it requires focus, speed, and hard execution,” Rasmussen said. 

The firm focused on e-commerce to manage the impact of store closures around the world. “We looked at how we could change our flow of goods and our ability to support that in a better way,” he said. 

Working in this way paid off for the brand, as consumer sales grew by 14% in the first half of 2020 compared with the same period in 2019. 

“We had double digit growth even with the constraints we had. It also shows that there is ability to actually execute if you have a strong foundation. We're very pleased with these results and operations played a big part of enabling that to happen,” he said. 

Rasmussen added the firm was able to capture the learnings and observations it made throughout the crisis period to inform its long-term strategy, which sees resilience as a key pillar. 

He said: “Over the summer, we have really been working on what we have learnt, and how we want to adapt to the new world and what we want to change.

“If we have made some choices in the middle of March, they would have been very different to where we landed in August and I feel much better about the decisions we have here in August because they have a long-term outlook that looks very solid.”

 Want to stay up to date with the news? Sign up to our daily bulletin.


LATEST
JOBS
Bristol
GBP45000.00 - GBP55000.00 per annum + Excellent Package
Bramwith Consulting
Flexible location with some days in London
Up to £140k plus bens
Langley Search & Interim
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE