Application and success of the lean manufacturing in Thailand, case study: Electrolux Professional Rayong

Electrolux Professional is a world-leading company in manufacturing professional solutions for food service and laundry system. With a complete product range for cooking, preserving and processing food as well as dishwashing systems (Figure 4.8), garbage disposal and fabric cleaning systems, Electrolux Professional provides tailored solutions for each professional in the field. To better fit customers’ need Electrolux tries to closely engage customers in many processes, from the early market research phases, to define new products characteristics, to production and delivery phases. Having more than 1000 dealer, 1200 guaranteed service center worldwide, Electrolux has the biggest vendor net and post-sales network of the field. Electrolux Professional guarantees a complete pre-sales service as well as the aftercare one to its clients, giving them services like initial consulting, planning and design activity, installation, maintenance and training.

The goal for the Group’s Professional Division is to create innovative appliances, able to provide the best technological solutions to increase productivity, reduce costs space and reduce environmental impact. In the last 5 years more than the 70% of the products faced a refurbishment that allowed the introduction of specific options created to answer to specific clients’ needs.

Many efforts are done to provide always a simpler and more effective product reaching high hygienic and safety standards, this is why Electrolux invests around 7% of its revenues in R&D, one of the highest percentage for the appliance field. Electrolux Professional business is divided into two categories: the first is laundry system, that provides product for fabric care, and the second is food service, providing complete solutions for catering.

An important characteristic of professional market is the bearing of labor cost on the finished good cost: this share is quite low and so this point isn’t an incentive to delocalize the manufacture of the goods. Nevertheless their high weight and size discourage production in countries far away from the final clients because of the high transportation costs that would have an important impact on the total cost of the product ant this is the main reason to move some production centers in the growth markets.
The high competitiveness that distinguishes nowadays markets, combined with the wide trading horizons of the company, leads Electrolux Professional to provide a varied array of products fitting the specific necessity of each region, having a high flexibility, a small environmental impact, an innovative design and a good and reliable aftersales service. These are all necessary requirements to cope in the highly competitive market in which Electrolux Professional operates.

The enterprise’s strategy is to increase its flexibility and quickness in answering to clients requirements, reducing supply chain transit time and the designing time thanks to a close cooperation with customers and a modularisation of products that allow a quicker time to market for new product development, always stressing on muda reduction.
Finally it’s important to notice that orders request are often done very close to the expected delivery date and, while in the past orders were requested generally with more than three weeks in advance, nowadays the major part of orders are put against the system less than 10 days in advance compared to the requested delivery date. This calls for quick production time and short supply chain transit time to avoid to produce on forecast, basing instead production plan on real customers’ orders.