LG Case Study

201
LGCSNet
Success story of the web-based
system for service partners
" We knew that we had to absolutely be at the

top of customer satisfaction if we wanted to be
successful.,"
Daya Prakash, CIO, LG Electronics India Pvt. Ltd.
ICT Integration in Business

Jaypee Business School
12/16/2010
SUCCEED IN THE CONSUMER ELECTRONICS
INDUSTRY
AT A GLANCE To succeed in the CE industry, companies must
Company Name innovate continually, maintain efficiency & operate
on a global basis. In order to do so, they typically
-LG deploy manufacturing facilities and sales offices
-India worldwide, in order to serve the local customers
more efficiently. Although, this type of expansion
-www.lg.com
is crucial in gaining a substantial market share, it
Industry can complicate business processes.
-Consumer Electronics The communication among the various sales offices

with their parent office is indeed very crucial in
Qualitative Benefits order to work both, effectively and efficiently. LG,
- Call Tracking and Open / Pending dealing in a variety of products like washing
complaints reports. machine, television, microwave oven, mobile
phones and so on, faced such a challenge.
- Reduce response time due to
regular call monitoring. LGEIL, a wholly-owned subsidiary of LG
Electronics, South Korea, set up base 12 years ago.
- Update daily call status and action
It set up its manufacturing hub in India in April
taken accordingly.
1998 with a turnover of 31 million USD. During
- Direct contact with the customers the years 1998-2004 demand increased manifold
through happy calling to get the and earlier third party manufacturing base was used
feedback. by the organization which had various tax and duty
- Daily call registration and call benefits. But with increase in demand, Indian and
assign to engineers. abroad in 2004 domestic plant in Pune was setup.
- Improvement in Productivity and

Quality of Service.
- Improvement in ASC LG INFRASTRUCTURE

Performance.
- Monitoring the daily issues and Currently in 2010, it has 48 branch offices across 9
immediately taken action on it and regions across the country. Each branch is required
resolve. office to reach customers directly through remote
area offices area office in charge, to talk to trading
- Service bulletin
partners, 2300 direct distributors and then sub
- Call Monitoring and Closure.
2
Quantitative Benefits dealers’ three distribution centres in place. As the
demand is growing the challenge is how to give
- Over 90% calls are being
registered through LGCSNet. unique perspective to customers in order to provide
more than value for money.
- System used by over 1000 ASC
across product categories. The aim has been to provide a unique experience to
customers. With this idea in place, LG owned shops
- 5 Lac (approx)calls in a month with were established, in order to educate the customers
absolute transparency.
on core technical products. Thus, helping them to
- 10-20% increased accuracy for rightly appreciate the product and better understand
spare inventory management at ASC the technicalities related to it.
- Effective Spare Part Inventory With Direct Service Centres (30 in non-metro and
Management amounting to an tier 2 cities) the aim is to monitor the whole
inventory worth Rs 14 crores. experience and to ensure that the customers are
- 100% of Spares parts orders are exposed to better service experience.
being routed through System only.
- To support VOC and 211

program by 120 Telecallers, IT@ LG
making about 1.5 lakh calls a
month.
In these changing scenarios it is of paramount
The result of the same is Customer importance for the organizations is to act fast with
Satisfaction. the right decisions. Organizations today need to
have their ERP foundations in place. LG
LGCSNet sites
incorporates it through e-management system that
Call center- 2,533 sites integrates various business functions. All the
North India- 585 sites modules of the ERP Package were configured
South India- 907 sites wither prior customisation to a few i.e. approx 30%
Server host- SOFTCELLNET customisation.
LGCSNet Country Map

PROVIDING EMPLOYEES WITH NEEDED
INFORMATION
There was plenty of substantial information at too

many places, and it was not organized in ways that
enabled employees to find it. Anytime, anyone had
any information to share, it would be
communicated manually. 8748 service engineers
3
and 1124 service centers were too widespread to be collaborated with the help of
current ERP package. This resulted in redundancies and no single ownership of
information.
THE NEED FOR REAL-TIME INFORMATION
It is very difficult for any organization to attract 100% potential customers and engage
their demand. Therefore, if an organization has a satisfied customer then there is a
huge scope of repeat purchase by customers and new products can be offered through
cross selling etc. But, a company cannot leverage advantages in product performance
and adaptability unless it has the availability of real-time information to determine
costs, assess business performance, and identify ways of benefiting from economies of
scale across geographically widespread operations.
LGEIL has several Authorised Service Center’s (ASC) spread across India. Every
ASC has a demand requirement for LG products as per the consumption by the
customer. Their demand requirement has to be very transparent in order to avoid
building up of inventory and/or excess lead time. Thus, the real time update was
required for efficient servicing of the customers. Every ASC was given the access to
the Customer Service Online Support network (www.lgcsnet.com), wherein they
could enter their demand and/or other relevant details concerning customer service.
The moment of truth had to be pleasant, consistent and convenient to the customer.
For instance, XYZ engineer visits a customer & if he behaves courteously, the
moment of truth is pleasant. The second time ABC engineer visits the same customer.
This is inconvenient for the customer as s/he shall have to repeat about the encounter
at the first time service. Thus, the information regarding which customer was visited
by which engineer is recorded.
”To survive in the fierce and stiff competition, management of speed with right
decision ahead of competitors is critical. I am of the opinion that IT dept plays a
crucial role in leading the company into the new height of execution with
enhanced speed by providing delicate decision making tools and processes”- MD,
LGEIL
LGCSNET
4
The B2B portal was meant to help LGEIL's service franchisees (ASCs) maintain spare
part stock, even if they were located in the backwaters. According to Mr. Prakash, the
LG Market depended on the service center’s attitude towards the customer. With
reliable and good service quality LG provided a unique customer solution where in
ERP system service centers infrastructure challenge was catered by a platform
accessed by the 100 service centers and integrated through LG. The data was gathered
from the CSNet module & subsequently, fed into the CRM module of the ERP
package. This also enabled them to gain control over the service levels of the service
engineers spread across the country. LGCSNet was a control mechanism that lay
down the guidelines for behaviour, service efficiency and communication skills of
service engineers. Also, it updated the management with the real-time requirements/
information of the ASCs.
The LGCSNet was launched with a campaign called “Customer Delight”. There were
three initiatives associated with this system- SMS Service, 211 & Voice of Customer.
SMS Service 211
Customer calls call center 2. Call Back to Customer in 2 hours
SMS sent to customer with job code 1. Service Engineer visit in 1 Day
SMS sent to service engineer 1. Within Convenient 1 Hour time

slot assigning him of that job
Simultaneous SMS to branch office
With this platform there was a 50-60% increase in sales potential. Long term benefits
are being sought after with it.
Thus, it has been of a paramount importance to the company and its business.

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201

" We knew that we had to absolutely be at the

ICT Integration in Business

-Consumer Electronics The communication among the various sales offices

- Improvement in Productivity and

- Improvement in ASC LG INFRASTRUCTURE

- To support VOC and 211

LGCSNet Country Map

There was plenty of substantial information at too

THE NEED FOR REAL-TIME INFORMATION

SMS Service 211

Customer calls call center 2. Call Back to Customer in 2 hours

SMS sent to service engineer 1. Within Convenient 1 Hour time

Simultaneous SMS to branch office

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