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01. Policy and Principle
LG Electronics Procurement defines global procurement policies, and standardized work procedures in conformity with corporate management standards and rules. If there is any conflict or inconsistency between the Procurement Policy and the applicable law of the country where Procurement activities take place, the applicable laws of that country shall prevail and control.
- Policy
The HQ Team Leader creates and maintains the corporate Procurement Policy. It must be followed by all members of Global Procurement as well as organizations with a specific delegation of procurement authority from the HQ Team Leader. Unless otherwise noted, exceptions to Global Procurement Policy can only be granted by the HQ Team Leader.
- Principle
Procurement personnel at LG Electronics must process work in accordance with corporate policies and principles. If a principle is to be created and implemented, the appropriate internal procedure for doing so must be followed.
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02. Procurement Core Objective
The objective of Procurement is to obtain products and services that satisfy the needs of both internal partners and external customers, and to ensure that the supply chain remains competitive while adapting to market changes. Procurement must enhance procurement capability and implement changes as required to deliver value and maintain LG Electronics' competitive advantage.
- Vision
LG Electronics Procurement's vision is to be the world's leading procurement organization. To achieve this goal, it must maintain a competitive advantage for stakeholders by providing the best prices, quality, service, and delivery.
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03. Procurement Process and Implementation
- Procurement Scope
The scope of procurement at LG Electronics includes all items supplied for the purpose of manufacturing products sold to the end customer, and all tangible and intangible items required to manage and maintain corporate activity.
- Direct materials: Materials used in the manufacture of products for sale
(includes outsourced materials, products, and equipment such as raw materials, and consignment materials) - Indirect materials: Shared consumables for production
- R&D materials: Materials used for the development of products and parts
- General materials or services: Business facilities, equipment, office supplies, publications, marketing communication activity costs (including advertising costs), travel, transportation, software, and other SG&A related goods and services
- Direct materials: Materials used in the manufacture of products for sale
- Procurement Standard Process
A procurement request is made by the department that requires an item or service. Prior to placing the request, the requesting department must have approval from the personnel in charge.
- Procurement Scope