LEGO - EMBRACING CHANGE BY COMBINING BUSINESS

INTELLIGENCE WITH A FLEXIBLE INFORMATION SYSTEM

History of LEGO Company

The LEGO Group was founded in 1932 by Ole Kirk Kristiansen. The company has passed from
father to son and is now owned by Kjeld Kirk Kristiansen, a grandchild of the founder. It has
come a long way over the past almost 80 years - from a small carpenter’s workshop to a modern,
to a global enterprise that is now, in terms of sales, the world’s fourth-largest manufacturer of
toys.

The name 'LEGO' is an abbreviation of the two Danish words "leg godt", meaning "play well".

The original Lego toys started with a wooden duck. But the first LEGO automatic binding brick
is their most important product. The products have undergone extensive development over the
years – but the foundation remains the traditional LEGO brick.
The Lego Group began in the carpentry workshop of Ole Kirk Christiansen, in Billund, Denmark
in 1916. In 1961, Lego wished to expand sales to North America, but did not have the logistical
capabilities to do so. Lego made an arrangement allowing Samsonite to begin producing and
selling Lego products in the United States and Canada.

On 7 June 1968, the first Legoland Park was opened in Billund. This theme park featured
elaborate models of miniature towns built entirely from Lego bricks. The three acre (12,000 m²)
park attracted 625,000 visitors in its first year alone. During the next 20 years, the park grew to
more than eight times its original size, and eventually averaged close to a million paying visitors
per year. More than eighteen million Lego sets were sold in 1968.

In 1969, the Duplo system went on sale. This was a newly developed system, targeted towards
younger children. The 1960s were such a period of major growth for the Lego Group that by
1970, one of the biggest questions they faced was how best to manage and control its expanding
market.

A Lego production plant was opened in Enfield, Connecticut in the United States. A packing
and assembly factory opened in Switzerland, followed by another in Jutland, Denmark. In 1982
Manaus, Brazil gained a Lego factory as well, followed by Canada in 1988 and Malaysia in
1990. Lego continues to expand its business operations with the setting up of Legoland in
various locations all over the world.

With such a vast international expansion, Lego needs to keep track of its operations efficiently.
Lego uses the SAP business suite system for this purpose. SAP Business Suite is a bundle of
business applications that provide integration of information and processes, collaboration,
industry-specific functionality, and scalability. SAP Business Suite is based on SAP's technology
platform called NetWeaver.
Explain the role of the database in SAP's three-tier system

SAP’s business suite is based on a flexible three-tier client-server architecture that can easily be
adapted to the new Service-Oriented Architecture (SOA) available in the latest versions of the
software.

In the first tier, a client interface-a browser-type graphical user interface (GUI) running on either
a laptop, desktop, or mobile device-submits users’ requests to the application servers. The
applications servers process clients’ requests and send the processed requests to the database
system-the third tier-which consists of one or more relational databases.

The main role of the database is as an information storage system. The relational database
contains the tables that store data on LEGO’s products, daily operations, the supply chain, and
thousands of employees.

Using the SAP query tool, users are able to toggle and tabulate data and extract reports from the
database. Therefore the database’s role is also as a reports generator.
Explain why distributed architectures are flexible

A distributed architecture system is a software system in which components located on

networked computers communicate and coordinate their actions by passing messages. The
components interact with each other in order to achieve a common goal.

Data may be stored in multiple computers, located in the same physical location; or may be
dispersed over a network of interconnected computers. A distributed database can reside on
network servers on the Internet, on corporate intranets or extranets, or on other company
networks.

Because they store data across multiple computers, distributed databases can improve
performance at end-user worksites by allowing transactions to be processed on many machines,
instead of being limited to one. Users from different parts of the world may access the same
data. Therefore they are more flexible in terms of availability to users.

They also bank on an improved performance of the machines, as data is located near the site of
greatest demand, and the database systems themselves are parallelized, allowing load on the
databases to be balanced among servers. A high load on one module of the database won't affect
other modules of the database in a distributed database.
They are also more flexible for purposes of expansion of the database and transparency, as the
data can be monitored on site of the specific computers as the data is potentially stored within the
departments they relate to. There is local autonomy or site autonomy, where a department can
control the data about them (as they are the ones familiar with it).

They are economically flexible and may cost less to create a network of smaller computers with
the power of a single large computer. Systems can be modified, added and removed from the
distributed database without affecting other modules (systems).

Identify some of the business intelligence features included in SAP's business software
suite

Product Lifecycle Management (PLM)

Product lifecycle management (PLM) is the process of managing the entire lifecycle of a product
from inception, through engineering design and manufacture, to service and disposal of
manufactured products. PLM integrates people, data, processes and business systems and
provides a product information backbone for companies and their extended enterprise.

PLM enables the company to deliver high-quality products and reduce waste, throughout every
phase of the product life cycle, to accelerate product development by integrating supply-chain
and procurement management. PLM also helps the company to improve operations with tools to
plan, measure, and track resources, safety, and maintenance, and to optimize productivity, via an
easy-to-use, role-based portal that enables content delivery.

Supply Chain Management (SCM)

SAP Supply Chain Management is a complete solution that covers supply chain networking,
supply chain planning, supply chain coordination, and SCE (Supply Chain Execution). It
includes a collection of planning applications related to Advanced Planning, Optimization,
Scheduling and Integration with other SAP execution applications. It basically does a supply
chain monitoring and analysis as well as forecasting, planning and inventory optimization.

The software caters to the company’s need to track demand, supply, manufacturing status,
logistics (i.e. where things are in the supply chain), and distribution. They also need to share data
with supply chain partners at an ever increasing rate.

Enterprise Resources Planning (ERP)

SAP Enterprise Resources Planning consists of several modules, including utilities for marketing
and sales, field service, product design and development, production and inventory control,
human resources, finance and accounting. SAP ERP collects and combines data from the
separate modules to provide the company or organization with enterprise resource planning.

ERP creates an increased competitiveness with integrated, fast, and flexible business processes.
It allows for an accelerated time to market with innovative, individualized products and services.
ERP simplifies corporate structure, market channel, and business scenario management and
improves corporate resource and asset utilization. ERP provides a consolidated foundation for
the latest mobile, cloud, and in-memory technologies.
What are the main advantages and disadvantages of having multiple databases in a
distributed architecture? Explain.

Advantages

Multiple database contains the tables that store data on product, daily operation, supply chain and
thousands of employees.

Managers can easily use the SAP query tool to obtain reports from the database because it does
not require any technical skills.

Distributed architecture enables authorized personnel to have direct access to database system
from the company’s various locations including in Europe, North America and Asia.

Disadvantages

The additional overhead of these transactions can be a performance penalty when the total
amount of data in the network is small. Users also see slower performance when accessing data
that is not local.

Increase in the use of database space, every table must exist in every database. When the number
of tables is very large, the amount of space used can be significant. Administrators must use
database storage parameters to size tables and reduce database space consumption.
Administrators must keep the schemas of all database synchronized and ensure that the network
is configured to take optimal advantage of the distributed-database environment in term of
availability and performance.

Although database backups are more flexible in a distributed-database environment, multiple

databases add complexity to the backup process.