LG Electronics (LG) has saved up to $350 million fromJanuary to September from its revamped supply chain management (SCM) system.

The company projected that 2009 would close with a savingsof $400 million and expected cash flow to increase by more than $800 million.

As of the end of the third quarter, LG's inventory turnoverperiod is down more than 10 days from the previous year and has resulted in acost reduction of approximately $150 million.

Cost of logistics improved by 15 per cent year-to-year which represents a total reduction of $200 million. Sales Forecast Accuracy (SFA)improved by 40 per cent over the last 12 months, doubling from the first quarter of 2008. On-Time Delivery (OTD) also improved by 10 per cent over thesame period.

"Efficient supply chain operation is the key to gaining acompetitive advantage in a global business," said Kevin Cha, managing directorof LG Electronics.

"We have also been working to minimise carbon emissions atevery stage of the supply chain. Sustainable management is a top priority atLG," he added.

The company is finalising a system to standardise andoptimise inventory turnover indicators, which will be applied to every product company wide during the first half of 2010. Europe and Asia in particular areseeing visible performance gains as a result of regional optimisation byreducing the total number of storage facilities.

LG is investing heavily in SCM innovation over three yearswith the aim of establishing a best practice SCM system in both process and execution by 2012, said a statement.