Lg's Supply Chain

Topics: Supply chain management, Inventory, Supply chain Pages: 9 (3469 words) Published: January 10, 2013
Looking Good; LG Electronics India Discusses its Supply Chain Strategy By Jayashree Kini-Mendes
Feature | 257 days ago | 
LG Electronics India believes in reaching products to people on-demand. Somebody impressed the market with a sense of enterprise, depth of vision, efficiency of service and the durability of products. Jayashree Mendes meets the Vice-President (Head – SCM) of LG Electronics India, KK Kaul, the man behind this movement. He has been working with the company since LG India set up operations in India in 1997. Growing with an establishment does have its advantages. You become familiar with the system. You are part of the growth. You know the history. You learn from your mistakes and take forward the positives. You have seen the innovations that worked and those that didn’t. You have watched people join and leave or stay on. And all this has added to the experience. So it’s no surprise when after 15 minutes into the meeting with KK Kaul, Vice-President (Head – SCM), LG Electronics India Pvt Ltd (LGEIL), the man not only begins to reel off figures and statistics related to various departments and products, but also speaks on the dynamics of business in general and the portfolio he handles in particular. He can tackle a topic that most people wouldn’t touch with a bargepole. That’s experience and authority. Fourteen years with a company does that to you.

Comfortably settled in his office after having concluded a meeting with his team, Mr. Kaul requires no prodding and is ready to speak on issues about inadequate transportation and corrugated infrastructure (more about that later). But for now, Mr. Kaul must explain the inside story of how, according to a survey conducted by market research GfK Group last year, LG continues to be ranked No. 1 in most product categories, except LCDs where it comes up No. 2, Audio: No. 3, and cell phones as No. 4, and unknown to the common man how the supply-chain department keeps the machinery well-oiled. A little knowledge of that can be gleaned by looking around his office. Occupying an entire wall sits a white-board displaying rows and columns of figures under various headers. Ask him about the figures, and smiling, Mr. Kaul says the figures represent up-to-the-minute data on raw materials inventory, manufacturing sales, targets, end-products inventory, etc. “The chart is crucial to us as it gives us a holistic picture of our position across the board of our targets to be met,” he says. Manufacturing Momentum

LGEIL manufactures a range of products spanning washing machines, color televisions, monitors, refrigerators, air-conditioners, microwave ovens, DVD, cell phones, and Optical Disk Drives (See Box: LG India: Production Numbers) at its two plants in Greater Noida operational since 1998 and at Ranjangaon in Pune since 2004, besides employing the services of third-party manufacturers. While LGEIL has several firsts to its credit, in manufacturing it was the first company to produce DVD Writers in the country. The move to rope in electronic manufacturing services (EMS) or third-party manufacturers arose in 2002 after LGEIL realized that supply was not keeping up with demand. The Noida plant was running to full capacity. Over the next six years, LGEIL has meticulously added 15 EMS companies to exclusively manufacture goods for them. To ensure quality, LGEIL provides the EMS companies with components such as picture tubes, panels, chips, compressors, LCDs, etc., that it sources globally for its own two plants. Today, the EMS companies manufacture 25 percent of the total number of goods produced by LGEIL. For logistics purposes and to ensure that the components reach the EMS companies on time, the locations of the EMS companies are based at Dehradun, Rourkee, Rudrapur, Baddi, Noida, Kolhapur, Pune and Rajpura. The locations are significant in that they are either close to LG’s Greater Noida plant or the Pune one, thus making transportation and access easier. It is common for...
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