OPERATIONS AND SUPPLY MANAGEMENT

(5BU012)

Student UID No: - 1823244

1926331

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SR.NO TOPICS PG.NO

1. Executive Summary 3

2. Introduction to LG Group 3

3. Application of 4V’s Typology 3-4

● Volume (low)
● Variety (high)
● Variance (high)
● Variability (low)
4. Process type and Process layout of LG 5-6

5. Conclusion and Recommendation for LG 6

6. Bibliography 7

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Executive summary: In this report we are gonna discuss the manufacturing strategies and
the process layout of the LG company and the company is doing very well enough and even
growing globally. LG Electronics Canada, Inc. is getting ready to launch the LG Watch Phone in
Canada after a successful launch in Europe. As an assistant marketing manager, I will assist in
the creation and implementation of a niche marketing strategy that complements LG's 51-year
brand equity while growing consumer electronics market share.There is currently no other watch
phone on the Canadian market. TV, Mobile phones and portable electronic devices with 3G
capability, a touch screen display, an MP3 player, and video calling are abundant on the market.
LG must persuade customers to move from their current phones to the LG Watch Phone in
order to generate sales in new markets. In this report we are going to discuss the manufacturing
strategies and the process layout of the LG Company and the company is doing very well
enough and even growing globally.

Introduction:
Life is Good is the organization picked is (LG). Microsoft, Nokia, Samsung, Toyota, and Toshiba
are only a few of the many prominent companies operating around the world and in various
fields of technology. They are always looking for new ways to improve people's lives. There are
several companies operating in various branches of technology today, such as mobile phones,
home appliances, and consumer electronics technology innovators. In October 1958, LG
Corporation (LG Corp.) was founded. LG is a Korean corporation with its headquarters in Seoul.
The word LG is simply an abbreviation of "Lucky Gold star," which is most often associated with
the catchphrase "Life's Nice." Lak-Hui (pronounced Lucky) from Lak-Hui Chemical Industrial
Corp. and Goldstar from GoldStar Co. were combined to create this name (currently known as
LG Electronics). In order to compete with other businesses, LG Corporation has introduced new
innovations such as hard discs, computer displays, notebooks, and mobile phones in recent
years. LG Corporation's success can be attributed to a variety of factors, but we will focus on
the importance of Internet Social Changes, Changing Organizational Nature, and Business
Organization and its Environment.

3. Application of 4V’s Typology: -

Volume (high):

LG is a huge conglomerate that produces several products within several segments. Ranking
as the fourth largest producer of television around the world, it should not come as a surprise
that the company strategizes on increased volumes of the products. However it should be noted
that LG produces various products within Home appliances, Home entertainment, Vehicle
components, Air Purifiers and many more, and therefore, following the strategy of economies of
scope, the production of volume of a product is directly contingent upon its demand. For
example, LG’s Styler which is a product that categorizes under Home appliances and is not very
common among the public unlike LG’s Television, and hence the production of this product is
significantly lower than that of LG’s Television. It was realized that due to growing sales the
company has decided to increase their production volume by 30% in 2019 (Eun-jin, 2019). The
company has impeccable volume flexibility because of the production plants that they have

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installed at various locations throughout the world. Inventory, Capacity and demand
management become easier because of their global and local networks making lead time ever
shorter and flexible.

Variety (high):

As it was discussed earlier, LG has a plethora of products to offer to its customers. The
company does not produce a single product with no variants. The company has ventured into all
sorts of electronic appliances, from television to mobile and from laptop computers to normal
monitors. Furthermore, the company has almost all of the daily home appliances in their product
basket like washing machines, vacuum cleaners, refrigerators, air conditioners, microwave
ovens, dishwashers and many more. In addition to that, the company has also ventured in
HVAC systems for buildings. The company also produces Solar Panels. Moreover, the list is
non-exhaustive as the company also produces and provides Electronic switching systems.
There are various kinds of Compressors and Motors that LG produces. Therefore, as it can be
seen from the list, LG does offer a variety of its products to its customers (GROUP, 2020). This
means that the list of products should be delivered through the transformations process. The
greater the variety is of the products, the more the operation management at LG has to allow for
variation. This always means more expenses, but the company in question here is LG, which is
a behemoth with annual revenue of 147.2 billion dollars in 2019 (GROUP, 2020).

Variability (high):

The company is always ready for fluctuation in demands because of their global production
network. Increased demand asks for increased inputs and LG is always ready for it because of
their local production facilities in many countries. For example, in India many households
consider buying a new home appliance or electronics during a festive period because they
consider it auspicious. Due to this sudden variation in demand, LG keeps the inventory stocked
up in the warehouses just before the festive period of a year. This advocates the fact that the
company is accustomed to the variability in the market and keeps itself finely tuned with it
(Newindianexpress, 2018).

Visibility (low):

LG Corporation sells products across the world and the visibility of the operations management
is contingent upon the region. LG does take assistance from third party logistic providers for
enhanced visibility of the processing and shipment of the customer’s product, but this does not
necessarily account for the visibility of the company’s operations. The complaints that are
registered with regards to the product are not processed transparently and this may result in
receding loyalty in certain segments of customers. More often than not, a customer is satisfied
with a reliable, durable and a functional product, but transparency in the operations at LG can
help them move closer to their customer and help them better. This will improve the loyalty of

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the customers towards the brand. However, the company makes decision best for high
productivity and hence is the image of the brand around the world (Hattangadi, 2021).

4. Process type & process layout: -  

LG provides smart and updated factory optimization solutions and services that provide in
improving manufacturing efficiency and effectiveness for a better layout perspective.
Consulting services: Factory Optimization of the Consulting Services in LG consists from a
variety of layout planning, process improvement, energy saving for the implementation of IT
services, equipment standardization and automation.
Software (IT) Solutions: these solutions include factory operation management, energy reserve
and management, and efficient equipment control using an integrated smart factory platform
BizActor, the efficient ways that makes it possible to execute all these functions with a simple
mouse click.
Equipment: it includes all the intelligent facilities that always focus on integrating manufacturing,
logistics, inspection and all production equipment and utilities with efficiency maximization
storage.

LG’s Manufacturing services over view:

1. Competitive manufacturing begins with factory optimization: achieving maximum factory
productivity is a common goal for every manufacturing services. Optimizing these
processes and transforming these operations in order to reduce these costs and also
improving their quality gives LG a competitive advantage. LG’s Smart Factory platform
Factova provides this competitive advantage.

2. Implementation of intelligent factory systems: LG’s smart factory systems provide full
solutions for factory and factory lines design optimization, intelligent equipment supply,
and integrated equipment control and efficiency and also equipment integration and
production. Catered solutions that meet customer site and industry specific needs.

3. LG has many success cases at home and abroad: Smart factory creates factories
with world-class manufacturing competitiveness. LG CNS provides Smart Factory
solutions to leading global companies such as LG Electronics, LG Display, Doosan
Infracore, and GE Healthcare. Panel and electronics manufacturing factories can be
found in Korea. Televisions are assembled in two different factories. Wide factories in
Korea that produce components and televisions. However, in recent years, as wages in
Korea have risen and the profitability of electronics manufacturing in Korea has
decreased, LG is increasingly shifting its manufacturing operations to other countries.
Despite this, TV sets are shipped from Korean factories to countries in Oceania,
Australia, New Zealand, the Americas, and elsewhere.

5. Recommendations & conclusion: -

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LG's research shows that it provides higher-quality services and has a market-sustaining
capability in its sector. In certain markets, the business is also experiencing unusual
movements. At the movement, LG needs to strengthen its pricing and marketing strategies. LG
announces the key skill and environment improvement product to reach a certain stage of
development. As a result, LG has a wide brand image for the commodity. Despite the fact that
LG's employees possessed a wide range of skills and abilities, the company's groundbreaking
technical goods were not available to customers. However, certain aspects of the marketing
mix, such as pricing strategy and advertising strategy, are still missing in order to reach
customers. LG must strengthen its pricing policy in the future, such as reducing the cost of the
existing product by minimizing its operation and increasing time utility. Many competitors have
emerged for LG's product. As far as technology is concerned, it should be expanded in order to
be implemented in a timely manner. This will rise in the future to capture a larger market. I'm
hoping LG's electronics and other components would be able to attract more customers.

Bibliography: -
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