In recent years many large electronic goods distributors have outsourced supply chain logistics to 3PL providers. But one company which has gone against this trend is LG Electronics, a market leader in the whitegoods, browngoods, mobile phone and IT products markets. Launched in Australia in 1997, LG Electronics utilised 3PL until 2003 when it totally revamped its supply chain strategy. The move to in-house distribution has certainly paid off for LG, with the business enjoying strong retail sales growth of around 30% per annum since.
During the past couple of years, the company has moved quickly to establish its own logistics network including major distribution centers in Sydney, Melbourne, Adelaide, Perth, Brisbane and Townsville. A key partner for LG during this period of rapid growth has been Colby Storage Solutions , which has designed and equipped all of the company’s supply chain distribution facilities.
The improvements made to customer service levels since bringing distribution in-house have been instrumental in the business achieving better than expected sales growth, now accepting orders up to around lunchtime most days and provide customers with guaranteed next day delivery in all metro areas. Service levels to regional areas have also improved substantially.
LG have just recently completed their sixth distribution centre design and fit-out with Colby Storage Solutions and have been consistently impressed by Colby's performance and ability to add value through their innovative approach to solving our material handling, supply chain and distribution challenges. Right from the start, Colby Storage Solutions took the time to get to know the business and to really understand what the imperatives were for LG from a logistics/ supply chain perspective.
Colby’s solutions for LG are really tailored to meet their needs. Most of their facilities incorporate several different types of storage systems to provide the most efficient way of storing and handling different types of products. An example of this is the drive-in racking for fastest moving browngoods; raised storage areas that maximise the use of overhead space and block stacking where appropriate.
Whenever storage requirements have altered due to changing market forces, Colby has always been ready with an appropriate solution. For instance, when it became apparent LG were beginning to outgrow some of our facilities, Colby came in and reconfigured some of their racking systems to give greater storage capacity to tide them over until they were able to implement a longer-term solution.