ASSIGNMENT-2

OF
GLOBAL SUPPLY CHAIN MANGEMENT
(BU1223)

COMPARATIVE ANALYSIS
LG ELECTRICALS AND PANASONIC

Submitted to
Prof. Jaison Mathews

Submitted by
Jagmeet Singh Lakhesar

Student ID
201900237
INTRODUCTION:-

LG ELECTRONICS

 LG Electronics is a Multinational gadgets company which deal with the electronic product

 LG Electronics having four units

Home Entertainment,
Mobile Communications,
Home Appliance & Air Solution
Vehicle Components
 Parent Organization: - LG Corporation

 Headquarter: Yeouido-dong, Seoul, South Korea

 According to 2014, LG Electronics is the fourth-largest family company in South Korea

 Global sales was recorded $55.91 billion in year 2014

 According to Dec 2019(in USD)

Revenue was recorded 62,306.17 Billion

Net income was 31285Millions

 In 1999, Zenith acquired by LG Electronics and manages 37.9 percent of LG Display.

 From 2008 LG Electronics always stand second in the whole world in

LCD television production.

 LG Electronics has 128 operational units worldwide

 Employees -83,000
 LG Electronics Manufacture Refrigerator, Cooking (Convection Glass Burners), ACs,

Microwave, Washing machines and so on

 Home entertainment products such as LEDs, Televisions, Monitors, PC and Projectors

etc

 Also manufacture Mobile, LG 4K UHD Blu-ray player etc

PANASONIC CORPORATION

 Panasonic Corporation is Japanese multinational electronics company. Its previous name

was Matsushita Electric Industrial Co., Ltd

 Company’s headquarter is in Kadoma, Osaka, Japan

 Panasonic established in 1918 as a manufacturer of light bulb sockets and after that it

became one of the largest electronics product manufacturers.

 Panasonic Corporation also provides non-electronic products and services -For example-

Home renovation services.

 According to 2012 survey Panasonic stand as fourth-largest television producer globally

 Employees - 384586 people

 Panasonic has 14 business domain organizations which have more than 680 companies in

the globally.

 This company is one of world’s largest consumer electronics producers. Panasonic

products - home appliances are very popular in Malaysia

  Three companies Panasonic, Sharp Electronics Corporation and Toshiba design a

Manufacturers Recycling Management Company, LLC (MRM) deal with the which is the

recycling of electronics. This company has a capability to decrease global carbon

footprint by 300,000 tons by 2010.

 From 1999-2005 this company has received ENERGY STAR award for seven

consecutive years.

.
QUESTIONS

Q: 1 THE GLOBAL DIMENSION OF THE SUPPLY CHAIN.

LG Electronics is the world second largest TVs producer LG TVs production plants in different
countries
LG Electronics is a large producer of screens it main plants are located in Korea and China. LG
produces also sells the screens other TV manufacturers such as Sony, Panasonic and many other
organizations buy screens from this company.

LG TV factories are located in Korea, Mexico, Poland, Indonesia, Russia, China, and India.
All the accessories are manufactured in Korea and China and after that these parts send to the
assembly plants.

In Korea
In Korea there are two factories which produce screens and electronics. From Korean plants LG
export to countries like in Australia, New Zealand, the American continent and other countries.

In China
LG spending investments in establishing new plants in china
In year 2019, a new plant started their work to produce OLED displays. This plant has ability to
prepare about 1 million OLED screens per year. From these plants LG TVs are shipped to Asia,
America and Africa.

In Russia
Ruza is a city of Russia where LG electronics plant is there. This factory produces televisions for
Russia, Asia, Eastern Europe and Caucasus regions countries. It has a capacity to make about 1
million televisions per year.

In Poland
There are several LG companies in Poland which produces LG Electronics LED displays. Due to
increase in salaries in Poland and competition with Chinese in 2019, LG decided to shutdown
their factories in Poland. Company wants to transfer their manufacturing units to countries where
labor is cheaper. But at end the company decided to continue its work in Poland and start
designing TVs for European countries.

In India: - LG Electronics has two manufacturing units one in Pune. In these plant televisions,
refrigerators, and air conditioners are manufactured. From here, company exports their products
to 64 countries this plant is very close to the port (in Mumbai),this makes the exporting process
easy and second plant is in Greater Noida which is one of the most eco-friendly plant as compare
to other production plants across the world

In Mexico
In Mexico there are three plants in Monterrey, Mexicali and Reynosther. These factories
produce TVs mainly sales for North America and South America.

In Indonesia
One of the largest TV plants is in Indonesia. About 3 million televisions are produce per year.
From here TVs mainly export to the Southeast Asia and Australia.

LG Electronics TVs models which get best ratings:

 LG OLED65W7P
 LG OLED65C7P
 LG OLED65G6P
 LG OLED65E6P
 LG OLED65C6P

SHAREHOLDERS OF LG ELECTRONICS
LG Corporation has most of the share of LG Electronics is 33.6%.On the second number
National Pension Service of Korea stands with 9.5% share. In addition, that 1.9 % and 1.8% is
the share of Dimensional Fund Advisors LP and The Vanguard Group, Inc. respectively.
BlackRock Fund Advisors has 1.5% share in this company.

PANASONIC PRODUCTION PLANTS IN DIFFERENT COUNTRIES

Panasonic has a wise strategy to expand their market especially in China due to two reasons first
one reason grow of is urbanization and other reason is population so there is great product
demands.
Panasonic also expanding their business in developing nations, for example – India, Vietnam,
and Indonesia as well as in developed countries such USA and Europe.

India:-Panasonic has mega production unit in Jhajjar, Haryana, India which was established in
2012 . In these air conditioners, refrigerators and washing machines are manufactured.

In Japan: - In their domestic market Panasonic has many plants in different region of the Japan
such as Hokkaido, Toyama, Kyoto, Yamaguch, Shimane, Fukui, Hyogo and
Osaka etc
In China –having production plants in Tianjin, Beijing, Qingdao, Shenzhen, Guangdong and
Hong Kong
In Europe- it has plants in The Slovak Republic, Czech Republic and Germany
In Mexico-Panasonic have production plants in Mexico, North America

It has also having production plants in –

Malaysia, Singapore, Indonesia, Thailand and Vietnam
PROCUREMENT PERFORMANCE & SUPPLY CHAIN
LG ELECTRONICS has 264 suppliers and it divided their business partners in two categories
Direct suppliers
Indirect suppliers
Direct suppliers provide raw goods or components used by LG Electronics for production of
products.
Indirect suppliers deal with other services such as advertisement and IT services.
PANASONIC doing business with around 10,000 companies worldwide.

Approx. 70% of these business partners are covered in Japan and China and 45% from these
partners only supply the parts machined.

CSR responsibilities are one priority across the entire supply chain of Panasonic.
Both companies are doing their best to fulfill their customers’ needs but after the comparison I
think LG Electronics is more globalized as compare to Panasonic

Q: 2 ROLE OF LOGISTICS (TRANSPORTATION, WAREHOUSING AND

DISTRIBUTION) IN SUPPLY CHAIN?

 Logistics is the control of the flow of things between origin and consumption to fulfill
requirements of customers
 Logistics play a key role in the quality of any supply chain
 A sound transport system is very beneficial to improve a supply chain management
 Logistics helps supply chain management to delivers their product to the right location, on
right time and safely which is a building block of any successful business
 Logistics is effective to create value of a business
 Logistics helps in decreasing costs and better efficiency
LG LOGISTIC ORGANIZATION STRUCTURE

THE SITUATIONS OF LGE SUPPLY CHAIN

LG Electronics Transportation annual exceeding $40 million which around 51% of total
logistic cost.

PANASONIC LOGISTICS:-
Panasonic is working in the sector to the elimination of global warming and also
improving transportation efficiency while reducing costs
Panasonic is working to reduce CO2 emissions in logistics. Company set targets of
reducing CO2 emissions per basic unit by minimum 1% year-on-year
It reduces CO2 by 46% from the fiscal 2006 level by fiscal 2019,
The focus of Panasonic focusing is on
Modal shift,
Usage low-emission vehicles and
Biodiesel fuel
Decrease transportation distances
Boost the load factor.
In fiscal 2016, Panasonic world CO2 emissions from logistics activities was around to
 0.86 million tons in which international transportation and domestic transportation
were 0.33 million tons (38%), and 0.132 million tons (15%) respectively. There was
reduction of 39% from the fiscal 2006 level due to the use of less international air
freight

Q: 3 DEMAND MANAGEMENT, ORDER MANAGEMENT AND CUSTOMER

SERVICES RELATED TO SUPPLY CHAIN.

Demand management is the forecasting of customer demand and makes it possible to do so

within the time period. There are two modes of demand management. First one is
Make to stock in this mode product should be stored in warehouse after the manufacturing to
make it ready to customers when customers place orders).Second one is Make to order it
mean production is only done when consumer place the order.

Demand forecasting model :

 JUDGEMENTAL FORECASTING: In certain cases only judgmental forecasting is

the right option due to lack of historical data. In case when any firm want to launch a
new product or when a new competitor enters in the market.
 TIME SERIES FORECASTING: The model predict future demand by analyzing the
trends of the past performance. For example-Sales of goods in the past years
 CAUSE AND EFFECT FORECASTING: While anticipating a basic variable, for
example, the amount of item that will be sold over a particular time range, the business
 administrator can utilize different methodologies. Cause and effect forecasting
particularly valuable, as it help to predict future patterns and handle basic business
elements

ORDER MANAGEMENT: Order management is defining as the management of all the

activities in such a way that least lead time to meet the client request and diminished the
wastage. It consists of four primary parts order transmittal, order processing, order picking &
assembly and order delivery. These are explained as following:

 Order Transmittal: Order transmittal refers to the transferring of the order between seller
and customer. Order can be carried out manually or electronically(email,telephone)
 Order processing: It is time period when seller receives an order to make it available in
the warehouse to fulfill the further demand.
 Order picking & assembly: It consists of all the activities when an correct location is
authorised to fill the order until goods loaded abroad.
 Order delivery: Order picking is the final stage in which goods are shipped to customer

CUSTOMER SERVICES : In order to win the customers’ loyalty and satisfactions every
company provide customer services To achieve this companies try make their product
competitive on the international level. It can be make more effective in four ways. By reducing
the order cycle time period, deliver product with in a the given time frame , Company should
make a effective communication between seller and customer and easily available to the
customer .

Q: 4 SOURCING, OPERATIONS AND INVENTORY MANAGEMENT RELATED

TO SUPPLY CHAIN SUSTAINABILITY.

LG electronics: - In any business Sourcing is the process which determine purchase and sale
of goods/services of a company
LG Electronics has five business units:
 Home Entertainment-TVs, Radio ,LCD etc
 Mobile Communications-Deal with mobile and its product
 Home Appliances & Air Solutions- Refrigerator, washing machine
 Vehicle Solutions and Business Solutions
Inventory management process is the process used by the to manage the goods in their
warehouses. In this process in the beginning with order of goods second step is analysis the
product. Goods are manufactured and inventory controlled as the demand of the product

Panasonics: Tasks of Panasonic are diverse like for the amusements there is a TV home
theater, home checking, camera for different machines phone, fans , coolers , microwaves and
some more. Every one of these merchandise are remembered for the activity the executives of
this organization.
Nowadays inventory management concept extended from the delivery of the good and
services to the consumers. An incorporated framework unites the procedures and thing data so
when a work request is made, the rundown of parts expected to effectively finish it is checked
against the present stock stacked on the vehicle.

Q5: SUPPLY CHAIN PERFORMANCE MEASUREMENT AND FINANCIAL

ANALYSIS IN PLACE.

The Measurement of a successful Supply Chain Performance is determine on the basis of

following metrics

 Delivery On-time
 Goods/Services quality
 Capability/Performance of the service
 Competitive price
 Responsiveness
 Lead time
 Technical capability
 Environmental, health, and safety performance
 Innovation
In determining the performance of supply chain cost is consider as a most crucial factor.
Optimization of total supply chain cost is very important to achieve this target firms can make
some modification in supply chain
The success of the supply chain measurement require
 It required a joint effort
 Customers as well as supplier should involve in this process.
 Removal of conflicts under the supply chain

Connection between the Supply Chain–Finance

Supply chain performance is directly linked to the financial performance. If the supply chain
performance is good than it improve the financial performance.
Sales or Marketing and corporate profitability is affects by Logistics
Financing inventory affects the capital required to fund the business.

Financial Impact on the Supply Chain

Supply chain plays a very important role in determining the profitability.

A major focus for any organization is to create a satisfactory return for stockholders.

Profit judge the corporate financial efficiency in relationship to the assets utilized, or its return on
assets.

Q 6: STRATEGIC CHALLENGES AND CHANGES FOR SUPPLY CHAIN IN THE

FUTURE.

: LG Electricals Strategic challenges and changes for supply chain:

ENERGY & CLIMATE CHANGE: - Reduction in emitting greenhouse gases and address
climate change help LG Electronics to become green company. Company should operate the
manufacturing operations in this way which minimum affect environment. For overcome this
challenge LG should regulate th hazardous substances, effective recycling should be done,
Process should it energy efficiency and eco-friendly. LG Electronics realizes that fulfilling of
these demands is very crucial portion of corporate social responsibility(CSR).The most
important thing for the company to overcome this problem it should used modern technology
which should ecologically sound.
 DEVELOPMENT OF GREEN PRODUCTS:-Green products are products with low
environmental impacts and it has alternative design which less required physical resources
during its life cycle. It is always non‐toxic and made up of recycled materials. Environmental
factors are the keys which predicate of a product’s competitiveness due to heightening
environmental awareness among consumers.

CUSTOMER SERVICE : Provide a proper customer service is considerable challenge for

almost every company . In USA, LG Electronics is develop an industry-first portfolio for the
personalized customer support in home appliances and home entertainment products powered
by artificial intelligence .It gives a peace of mind for LG customers and boost customer
satisfaction as well as improved the product performance and longevity.

Panasonic Strategic challenges and changes for supply chain:-

SLOW GROWTH COMPARED TO COMPETITORS: If we compared the growth of the

Panasonic’s competitors for example –LG, Philips and Samsung , Panasonic is not localised in
particular market .Other companies is excelling in the market because of predictability of the
targeted market. Panasonic should adopt such kind of strategies which increase the customers’
loyalty toward company which ultimately boost the sale.

ORGANIZATIONAL STRUCTURAL: Panasonic is a global firm so it is a big organization

and and having complex structure. The structure of the company should be simple so
management is easy to deal with every portion of the company. Structure of firm directly affects
the sales and growth of the company. Panasonic should take some initiate to make it simple.
REFERENCE :-

https://www.companieshistory.com/lg-electronics/
https://www.ukessays.com/essays/marketing/the-history-of-lg-electronics-marketing-essay.php
https://asia.nikkei.com/Companies/LG-Electronics-Inc
https://en.tab-tv.com/?p=18414
https://en.tab-tv.com/?p=14392
https://en.wikipedia.org/wiki/Panasonic
https://www.ukessays.com/essays/marketing/a-company-overview-of-panasonic-corporation-marketing-
essay.php
https://www.panasonic.com/global/corporate/is/company/site_industorial/site_general_ele.html
https://www.panasonic.com/global/corporate/sustainability/supply_chain.html
https://www.slideshare.net/SomaGiri/lg-9629911
http://www.electronics-sourcing.com/2009/07/08/lg-electronics-to-source-more-components-from-mexico/
https://www.carecprogram.org/uploads/Chapter-5-Supply-Chain-Performance-Measurement-and-Financial-
Analysis.pdf