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What is the meaning of IT systems within your products supply chain?

Information is the connection between all of the activities and operations in a supply
chain. Information technology is a globally competitive tool for data collection, data
processing through a process of conversion of knowledge, information storage and
transmission to users, when required. Web technologies enable enterprises to
become more effective, to trade with suppliers and customers over the Internet in real
time.

Customer satisfaction is dependent on the efficiency of supply chain activities. Supply


chain members have to collaborate, sharing information for improving customer
satisfaction. Today, businesses are trying to develop cooperation with the value chain
members to achieve their objectives. Information technology developments that
enable sharing of information on demand throughout the entire chain inventory can
reduce costs by between 2.2 and 12.1 percent. For example, when the demand of TV
decreases, the TV manufacturer have to reduce the need from suppliers immediately
to avoid redundancy of products, thus making profits by reducing cost. Its critical for
TV company make response to the market and coordinate supply chain
simultaneously. Information and communication technology is a good solution to
problems arising from the complexity of buyersupplier and suppliersupplier
systems.

TV is a product of global sourcing. IT system made the boundary between supplier


and manufacturer more transparent. It enables manufacturer to select best product
components from their suppliers in worldwide, thus meeting the satisfaction of
consumer for good quality. And TV manufacturers outsource their products along a
global supply chain, they create a win-win-win situation. The manufacturers have
lower costs, the consumers have cheaper TVs, and TVs are better made.
Standardization of parts, economies of scale, and lower transportation costs have
made most TV factories assemblers, rather than manufacturers. Parts from all the
over the world are shipped to a main factory where the TV is assembled and then
sent to retailers. With manufacturers producing only specific parts, quality is better.
And as companies move to lower cost countries, the price of TVs falls. The
implementation of the supply chain information systems in TV manufacturer facilitates an
increase in their competitiveness and their profits.

In a nutshell, IT system enhanced the flexibility and adaptability of TV manufacturer


while meeting changing market. IT system provides savings on input costs such as
time, labor, and energy, and thus enables realization of profitability and customer
satisfaction collectively.
How are the production and manufacturing processes organized?

The manufacturing of TV mainly consists of assembling of LED screen, assembling


of microchips, assembling of housing of TV and quality control.TV manufacturing
apply mass production generally because its feature of highly demanded. Many TV
factories run 24-7 operations so that fixed capital costs are spread over a larger
number of TV sets. Thanks to manufacturing automation and robotics, companies
can operate factories with even higher output capacities, yielding lower unit prices.
TV sets are no longer manufactured: they are assembled.

What logistics concepts are employed for the supply chain and what
advantages and disadvantages they entail?

In the electronics industry, the supply chain is the central nervous system that
governs how companies manufacture products. It includes choosing the source of
components, managing supplier relationships, making the product, deciding on
inventory levels, supporting the logistics of transportation and pushing the final
delivery of the manufactured product through distribution channels into the retail
stores. Although the inner details of its operations are secretive (to preserve
competitive differentiation), the TV supply chain is quite open and modular. It relies
on standard components from known suppliers and can be easily copied, contributing
to its large footprint around the world. Several factors contribute to the overall
dynamism and peculiarity of the television supply chain.

Today's favored supply-chain model is one of "virtual integration", where companies,


rather than manufacturing every component, depend on a virtual and dynamic co-
ordination of external suppliers. This innovation has led to a large degree of
standardization and modularity in product design, hence manufacturing simplicity. By
making TV sets modular with standard components, companies are able to easily
duplicate and replicate the manufacturing process around the world. This is the single
most important innovation that has set the wheels in motion for the globalization of
television manufacturing.

As the demand for TV manufacturing increases, so does the demand for


components. Large-scale specialized factories can build one specialized component
cheaper than before. For example, a new joint-venture factory in China will
manufacture 1 million yokes per month. Manufacturers keep finding these new and
cheaper sources of materials from various parts of the world so they can shave
material costs or integrate additional features into the next product. Many of these
sources are in Asia. Many TV makers have strategic procurement offices in Asia, the
better to continuously source the best components at the best prices and manage the
vendor relationships.

When the television industry first arrived in Mexico in the early 80's, only 5% of
components were locally sourced. Gradually, a peripheral components industry
prospered, allowing companies to source now over 80% of components in Mexico
within trucking distance of the manufacturing plants. Ideally, companies prefer
suppliers close to the assembly locations. This saves on transportation costs,
eliminates potential duty rates and allows for better management of vendor
relationships. In reality, companies end up making trade-offs due to the attractiveness
of supply sources from Asia. On average, they rely on global sources for roughly 25%
of components.

The trick is no longer who produces the best TV, but which company is able to exploit
the current global chain. He who globalizes best, wins.

What is the meaning of ethics, sustainability and corporate social


responsibility for your product? Are there any new interesting developments?

It will also produce heavy metals and hazardous chemicals during TV manufacturing.
To reduce the environmental impact on human, LG has been working to improve
home environment for its consumers by replacing hazardous substances, reducing
noises from home appliances and adding anti-allergy and anti-bacterial features.

Life circle of TV is comparatively short because the evolution of electronic field is


strikingly fast, which increase the burden of consumers. In order to solve the
problem, one Chinese company called Xiaomi, separate the TV into two parts, LED
screen and a box containing TV processor and speaker. And the price of box is only
1/5 of the TV, thus consumes are able to keep having the best experiences in
watching TV without spending more money on LED screen.

Nowadays TVs mostly are using LED screen which has better performance in
display. But more importantly, it enhanced the energy efficiency and reduced the CO2
emission. LG company has made some efforts to promote recycling and efficient use
of resources. They recycled plastic in part of its product components following careful
stability and reliability tests. LG used a total of 5,617 tons of Post-Consumer
Recycled plastic in 2013, continually increasing use to 3,298 tons and 4,980 tons in
2011 and 2012, respectively.

Reference
https://mpra.ub.uni-muenchen.de/66034/1/MPRA_paper_66034.pdf
http://www.emeraldinsight.com/doi/full/10.1108/17579881211248808
http://www.amfiteatrueconomic.ase.ro/arhiva/pdf/no24/articol_fulltext_pag236.p
df
https://ideas.repec.org/a/aes/amfeco/v10y2008i24p236-253.html
http://www.lg.com/global/sustainability/environment/greener-
products/products-application
http://www.lg.com/global/sustainability/environment/greener-
products/products-application
https://www.ic.gc.ca/eic/site/csr-rse.nsf/eng/rs00178.html
http://yaleglobal.yale.edu/content/small-screen-smaller-world