Electrolux 2010 Annual Report Download - page 49
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Optimized procurement
Approximately half of the savings delivered by the global initiatives
are expected to be realized through better global coordination of
procurement. Modules with standardized interfaces, products and
components result in fewer suppliers while increasing the volume of
the input goods being procured. Another prioritized area that is part
of delivering greater efficiency is the involvement of the procurement
function earlier in the product development process.
Faster and more efficient product development
Developing products based on global needs leads to greater effi-
ciency not only in product development and marketing, but also in
production, since fewer product platforms are required. Coopera-
tion between the different Electrolux global product councils for
appliances will accelerate, and global units for product development
in the respective product categories will accelerate the pace of inno-
vation. Currently, Electrolux has eight global product development
11 10
94 16
58 5
11 2
20 1
50 10
Mech. structure
Total spend approx. SEK 1–1.5 billion.
Share of annual purchasing spend, %
Glass pack
Handle
Hinge
Door lock
Total door
41%
35%
100%
Structural savings approx 10%
12%
9%
3%
From … … to
Less types of components
Example of modularization, oven door
centers for household appliances around the world that focus on
areas including induction, built-in and front-loaded washing
machines. The objective is to further increase the level of differentia-
tion for new launches in the premium segment and concurrently be
able to profitably compete in the mass-market segment.
Modularization
Standardizing and utilizing modules for components common to all
products, in one category, facilitates faster product development
and more rapid satisfaction of consumer needs. In addition, pro-
curement costs are reduced; resulting, for example, in lower prod-
uct costs. In appliances, work is ongoing to identify the number of
variants needed for a product category’s various components, such
as glass shelves, handles and hinges. Although criteria for design
must be varied to meet consumer preferences and tastes, the inside
of the product is rarely affected.
45