LG launches buyer 'boot camp'

7 April 2009

08 April 2009 | Rebecca Ellinor

LG Electronics is aiming to become "the best procurement organisation in the world" over the next three years.

Speaking exclusively to SM, Tom Linton, who was appointed the company's first CPO 16 months ago, said: "We're behind best practice, we're going to catch up and meet best practice, then we're going to create it."

Linton has set purchasing at the Korean firm substantial savings targets. As part of the plan to reach them, CEO Yong Nam has agreed to reassign 150 staff to begin a general procurement organisation from scratch.

The new buyers began "military-like boot camp" procurement training earlier this month to equip them to produce savings in 222 commodity categories in 48 countries.

"Material procurement is well understood here," said Linton, "but we have $10 billion (£6.8 billion) of non-material general procurement, and that was unmanaged. The magnitude of the potential savings is enormous."

He hopes to make savings of around 20 per cent on general procurement alone.

"I would like to get at least $2 billion (£1.4 billion) in indirect savings, it's just a question of how fast."

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