In a partial reverse of a strategy embarked on two years ago, toymaker Lego (Billund / Denmark; www.lego.com) is phasing out its outsourcing agreement with Singapore-based electronics industry supplier Flextronics (www.flextronics.com) for Hungary and Mexico. This follows moves earlier this year to take back injection moulding responsibility from the Asian group at Kladno / Czech Republic – see Plasteurope.com of 26.02.2008.

The Danish group said it has become “increasingly obvious” that managing its own global manufacturing set-up is the best way forward. Nevertheless, it is still continuing its cooperation with other outside manufacturing suppliers in Hungary as well as Poland and China, alongside running its own operations at Billund and now Kladno.

In 2006, Lego transferred responsibility for several moulding facilities, including Kladno, to Flextronics – see Plasteurope.com of 26.06.2006 – leading to massive job losses in its own organisation. Outsourcing was intended to achieve cost savings. The toy maker does not indicate to what extent this was achieved, but the recent move suggests that the arrangement was not as efficient as hoped. In its latest statement, Lego says that, with manufacturing in its own hands, “the supply chain will be developed faster through going for the best, leanest and highest quality solution at all times.”

Negotiations about taking back the plant and employees at Nyíregyháza / Hungary are to be concluded during July. Production at Juarez / Mexico will move to Monterrey / Mexico early in 2009, with production to commence there in the second quarter.