issue: September 2005 APPLIANCE Magazine
Investing in the Future
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by Erin Biesen, Assistant Editor
LG Electronics is aiming to reach premium status and be on top of the global appliance market in the coming years.
At LG’s PDP Panel facility, about 200 employees build PDP modules and conduct testing.
APPLIANCE magazine recently traveled to Korea to visit several of LG Electronics’ factories and showrooms to see the innovative technology the company uses. It became quite obvious that the company has no plans of slowing down, but fully intends to push forward and become a global leader. Using its motto of “Great Company, Great People,” the South Korean-based company is working to gain worldwide customer trust and peer recognition. The major appliance and consumer electronics manufacturer realizes that this is only possible if there are great people working for it with the same goals in mind. “The technology leadership position that we now enjoy is a direct result of the people who have always placed ‘we’ before ‘I’ and faced challenges with a ‘can-do’ attitude,” explains Daniel Lee, director of Marketing.
After visiting its Corporate Design Center, it is evident LG not only invests in its employees, but also in new and innovative products and design to reach its desired premium status. It is looking to the future with products like automated kitchens that interact with families and also has plans to expand across the globe, building manufacturing plants in Eastern Europe and Moscow, as well as doubling the size of its Mexican facilities.
The Corporate Design Center, located in Seoul, Korea, is where most of the design process takes place for the company. The 178,000-sq-ft factory has doubled the size and scope of work conducted over the past 2 years. “The Corporate Design Center helps to guide the development process and provides input on key areas such as overall design, finish, and color,” says Mr. Lee. “More and more, products are developed based on designers’ input, and more designers are leading the way in global trend research and product R&D.”
One example of these new and trendy products is the Artcool air-conditioner, which uses modern design to make air-conditioners a part of home decor. Some product designs feature art from painters such as Mondrian and Van Gogh. In the design showroom, APPLIANCE saw many other design-rich and high-tech products, including pink and blue washers and dryers and refrigerators that can check body fat.
LG has plans to invest more than U.S. $2.2 billion in R&D for the development of new concepts and products this year. The company believes this is key to reaching its goal of leading the global market. “We are trying to become number one in the home appliance market by 2007,” says Sang Young Shin, vice president and head of the Digital Appliance Design Research Lab. “Our design engineers are working hard to surpass companies such as Electrolux, GE, and Whirlpool.”
APPLIANCE also visited LG’s Plasma Display Panel (PDP) Module and Final Assembly Facilty in Kumi, Korea. The factory opened in April and includes departments such as development, final assembly, final quality inspection, and shipment. The consumer electronics facility spans 1.4 million sq ft, employs 2,000 people, and has an output capacity of 3.6 million units per year. In order to ensure efficiency and quality, each line worker has written notes that hang on the production line. LG is aiming for a 30-percent share of the global PDP module market by 2005, the top spot in the global plasma TV market by 2006, and number-one position in the global LCD TV market by 2008.
In order to achieve the goals it has set, LG has released a variety of digital products. On April 18, the company launched the LP1 series of LCD TVs in the European market. The product features the S-IPS module, which reportedly offers the world’s largest 178-degree viewing angle, vertically and horizontally. Proving that it is aiming to be known as a premium brand, LG also introduced a 71-in PDP TV in Korea in November of last year. The TV will be sold at the world’s highest price of 80 million won (approx. U.S. $80,000) and includes a home theater system and digital broadcast receiver. The company is set to mass-produce the product and will later launch it in North America, the Middle East, and Commonwealth of Independent States (CIS) regions.
Washing the Line
The major appliance department is no different from the other departments at LG. Striving to become known as a product leader, the company has target sales of $10 billion this year, up from $8.5 billion in 2004, and in 2007, it wants to reach $14 billion in global sales.
APPLIANCE also visited LG’s washing machine line located in Chang-Won, which has an output capacity of 5 million units per year. “The assembly line was recently remodeled into a ‘10-sec assembly line’ to produce one unit every 10 sec,” notes Mr. Lee. “Additional investments have been made to accommodate an increase in demand for the front-loading washers and dryers.” The plant is 392,000 sq ft with 1,500 employees that work in the assembly, final quality inspection, and shipment departments.
Catering to industry trends, the company has launched a large-capacity washer and dryer combo with SenseClean, which washes and dries laundry in one unit. There is also a Tromm front-control laundry system that places the electric controls on the front of the unit. The design of these products allows for them to be stacked on top of each other or placed under counters or in cabinets.
The company notes that these new and innovative products would not be possible without the teamwork employees use. “While financial growth, market leadership, and profitable business results are important facets to any great company, our focus is on the people who make up the company,” says Mr. Lee. “Our success is built on our company-wide focus on satisfying customer needs and providing superior products that ultimately make people’s lives better.”