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LG Hausys Division to Cut Days of Inventory, Inventory Transfers by Half

The eco-friendly maker of interior living space materials picked Vanguard Software to improve inventory management and customer service throughout North America.

LG Hausys is upgrading from spreadsheets to Vanguard Software to automate sales forecasting and optimize demand and supply planning.

The company, part of the South Korea-based LG conglomerate, manufactures and sells high-performance interior materials and parts used in buildings and automobiles, such as windows, curtain walls, countertops, automotive upholstery, and more.

The company’s U.S.-based division has grown significantly in recent years, selling materials through a network of distributors and stores.

Jun Kim, Sr. Demand Planner for LG Hausys America, said he’d been using Excel to process just three months of sales history to generate a high-level, moving-average demand forecast.

Using spreadsheets, neither Jun nor his team has the bandwidth to create accurate lower level forecasts, such as for individual products, or sales territories.  That’s made inventory management increasingly difficult, resulting in a mix of stock-outs, high-cost shipments, and excess inventory on hand.

Kim and senior management are still working out specific Key Performance Indicators (KPIs), but for the short term, they’re eyeing two specific inventory goals:

  • Cut Days of Inventory in half, from roughly 180 to 90.
  • Reduce Inventory Transfers in half from 10 percent to 5 percent (measured as a percentage of total revenue). Inventory Transfers result from warehouse stock-outs and increase freight costs.

“We’re still in implementation, though it’s clear that before Vanguard, our demand planning and supply planning teams were operating in different silos,” Kim said. “Now, we’ll have a shared system and a clear logic to match our inventory levels to actual demand, based on the forecasts.”

With Vanguard, Kim will be able to automate the analyses of infinitely more data, and in much greater depth, to increase demand forecast accuracy (at granular and rolled-up levels), optimize inventory, and improve customer service.

“Our teams will now see the same data for historical sales and for the demand forecast,” Kim said. “We expect many strong improvements.”

About LG Hausys

LG Hausys specializes in windows and curtain walls, interior materials, automotive material, and high-performance material parts backed by approximately 4,270 employees world-wide. LG Hausys’ vision is to create human-friendly, eco-conscious living spaces, which informs their strategies for realizing eco-conscious, energy-efficient, and human-friendly customer value.

About Vanguard Software

Vanguard Software introduced its first product for decision support analysis in 1995. Today, companies across every major industry and more than 60 countries rely on Vanguard Software’s Integrated Business Planning (IBP), forecasting, and advanced analytic cloud platform. Vanguard Software is based in Cary, North Carolina.

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