LG Electronics Strengthens Win-Win Cooperation with Partners... 11 Billion KRW Savings Over 3 Years

Operation of the 'Partner Proposal System'
Distribution of Idea Outcomes

Geuma Metal employees are introducing parts developed in collaboration with LG Electronics through the partner company idea proposal system.

[Asia Economy Reporter Dongwoo Lee] LG Electronics announced on the 6th that over the past three years, it has achieved cost savings of more than 11 billion KRW in production sites within its partner companies through over 230 ideas proposed by these partners. Among these, more than 100 ideas were jointly developed this year alone, resulting in savings of approximately 5 billion KRW.

LG Electronics explained that it is also revitalizing the 'Partner Idea Proposal System' through the establishment of the ESI (Early Supplier Involvement) process, which involves partners from the product development stage.

Since 2004, LG Electronics has operated the Partner Idea Proposal System to allow partners to propose various ideas that can improve productivity, such as developing new technologies or parts, or improving design, quality, and product packaging. Since 2012, a systematic management system has been established to enable all partners to participate freely at any time.

LG Electronics selects tasks from the registered ideas that are difficult for partners to carry out independently and provides support such as technology and product development, improvement of prototype quality and productivity, and financial assistance. When jointly developed tasks yield results, LG Electronics and its partners share the benefits according to an agreed method.

The Partner Idea Proposal System is a 'win-win growth model' that helps LG Electronics and its partners jointly enhance productivity and create new value.

Geuma Metal, located in Changwon, Gyeongnam, utilized this system to reduce its annual parts processing costs by approximately 670 million KRW. As a first-tier partner of LG Electronics, the company proposed an idea last year to improve the production process of parts used in LG Electronics' system air conditioner outdoor units. The idea involved changing the method from manufacturing and assembling two separate parts to integrating them into a single production process. LG Electronics supported mold production based on Geuma Metal’s idea, contributing to the reduction of parts processing costs.

LG Electronics is fostering mutual growth by providing various support policies to its partners, including consulting for productivity improvement, interest-free funding, development of parts applying new technologies and methods, and free training.

Lee Siyong, Executive Vice President and Head of LG Electronics' Purchasing Management Center, said, “Actively supporting partners’ ideas to create joint achievements and share profits forms a virtuous cycle that greatly contributes to win-win growth. We will continue to provide various support so that LG Electronics and its partners can grow together as win-win partners.”

This content was produced with the assistance of AI translation services.