LG Electronics, a Korean electronics giant, announced that it has saved US $350 million from January to September this year, thanks to its new supply chain management (SCM), and it expects to save an additional US $50 million in the final months of this year. Due to SCM, LG’s managers said the company’s cash flow increased US $800 million over last year.

With the improvement of its SCM, LG’s accumulated days of inventory were reduced by more than 10 days compared to last year, and that enabled the company to save around US $150 million, an LG spokesman said, adding that the index of days of inventory is approaching a “world-class” level.

LG also announced an improvement in the company’s sales forecast accuracy (SFA) index, which is used to optimize inventory and an effective supply chain. LG expects its SFA index in the fourth quarter to be about 40 percent better than it was last year, while its on-time delivery (OTD) is showing a 10 percent improvement this year.

“Efficient supply chain operation is the key to gaining a competitive advantage in a global business,” said Didier Chenneveau, chief supply chain officer (CSCO) of LG. “We have also been working to minimize carbon emissions at every stage of the supply chain. Sustainable management is a top priority at LG.” LG appointed Chenneveau to the position last March. He had previously served for about twenty years in the SCM sector at HP.

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