LG Electronics
Business Environment
As a global electronics leader, LG Electronics has established a strong reputation for innovation and excellence in the digital field. Founded in 1958, the company has grown to become one of the world's most prominent manufacturers of electronic products, mobile communications equipment, and consumer electronics. With a diverse and highly skilled workforce of 87,000 employees spread across more than 113 business locations worldwide, LG Electronics is well-positioned to continue driving growth and innovation in the digital landscape for many years to come. The company's cutting-edge technology, state-of-the-art manufacturing facilities, and global distribution network have made LG Electronics one of the most trusted and respected brands in the industry.
Project Background & Goals
LG Electronics' Air Conditioning Business Headquarters was facing a number of challenges in the rapidly-evolving consumer electronics market. With shorter product life cycles and increasing competition among manufacturers, there was a growing need to differentiate new products and meet consumers' expectations for the latest technology. Additionally, traditional ERP solutions and general manufacturing SCM solutions were not able to effectively handle the large number of small-quantity orders for various products. In response, Zionex implemented a DLSM (Demand Leveling & Set Matching) system to synchronize and level purchasing, production, and shipping at the LG Electronics Air Conditioning Business Headquarters. By utilizing the LPPS (Leveled Production Planning System) for set leveling production strategy, the RP (Replenishment System) for post-replenishment request, and the CLOS (Container Loading System) optimization, we aimed to minimize inventory and maximize production efficiency, while taking into account production and logistics shipping units. This system helped LG Electronics to better adapt to the rapidly changing market and stay competitive.
Return on Investments
With the implementation of the DLSM system, LG Electronics was able to significantly improve its supply chain efficiency. By effectively synchronizing and leveling purchasing, production, and shipping, we were able to reduce lead times, improve inventory turnover, and enhance customer on-time delivery rates. These results were not only impressive but also had a tangible impact on the bottom line, with a reduction of working capital costs of $74 million and a savings of 14,000 square meters of warehouse space. The success of this project was recognized globally, as the case study of LG Electronics' SCM system construction by Zionex was featured in the Case Study Report of Forrester Research, a renowned global IT research and consulting firm. This further underscores the effectiveness and impact of our efforts.
