SUPPLY CHAIN MANAGEMENT OF LG By, Somanna.B.A

LG Electronics India Pvt. Ltd. A wholly owned subsidiary of LG Electronics, South Korea Established in January, 1997 State-of-the art manufacturing facility at Greater Noida, near Delhi, in 1998

LG Electronics India Pvt. Ltd. Vision was to become a 'Health Partner' for its consumers The CTV range offered by LG has 'Golden Eye' technology Entire range of LG air-conditioners have 'Health Air System' Microwave ovens have the 'Health Wave System' Refrigerators have the 'PN System’ Washing machines have 'Fabricare System'

LG MARKET SHARE

LG MARKET SHARE

LG MARKET SHARE

LG MARKET SHARE

LG CHANNEL STRUCTURE Multi-tier structure Have LG Shoppes, cyber shoppes, SSDs, X-Canvas Studios, direct dealers Also have a network of distributors and sub dealers About 10,000 stock and selling points spread across the country Different distribution strategies for its different product groups GSM mobile phones do not make use of CFA’s CTV’s, microwaves and other like items require a CFA

LG CHANNEL STRUCTURE Primary manufacturing facility at Greater NOIDA Two other manufacturing facilities have come up in the region of Pune and Dehradun, keeping in mind the benefits of Excise free zones (EFZ’s) Procurement of supplies and materials for production is done by the purchase department

LG CHANNEL STRUCTURE The annual forecasts are further disaggregated into forecasts that are carried out twice a month(15 days basis), on the basis of which inventories are maintained and further production levels are maintained Most raw materials are bought from suppliers within India At the retail level, LG uses a combination of exclusive LG showrooms as well as Multi-brand outlets (MBO’s)

LG CHANNEL STRUCTURE Consumers for LG include individual consumers as well as institutional clients LG also indulges in e-retailing as an alternative channel through its website www.lgezbuy.com LG also has a separate channel for services and spares

LG DISTRIBUTION NETWORK SUPPLIERS FACTORY (OEM) WAREHOUSE CFA DISTRIBUTOR LG SHOPPE DEALER CONSUMERS INSTITUTIONS www.lgezbuy.com

LOGISTICS FLOW

LG CHANNEL PARTNERS CFA’s. They are spread across 20 states in India. The company dispatches the goods to C/F on consignment basis. At the same time, these C/F agents all work on contract basis. They get paid as per the amount they stock.

DISTRIBUTORS The company appoints distributor for selective cities where the markets are small but require more focus and attention. Distributors are required to conduct sales and marketing on behalf of the company in these markets serving to all the required company stores. The company sends goods to the distributor on out right sale basis. It is the duty of the distributor to send his people into the field to book the orders and also execute them through their own delivery vehicles. The distributor has to maintain his own sales, delivery and accounts people for smooth working of his unit and is served by the nearest C/F for all his requirements. The distributor is given a margin of 10-20%

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