Operational excellence

Operational excellence

Electrolux is leveraging its global strength and scale to increase efficiency and reduce costs. Modularization and global optimization of production unlocks resources for investment in product development, design and marketing.

Economies of scale in global operations

The Group’s global economies of scale are clear advantages in purchasing raw materials, components and finished products. The global purchasing function coordinates and administers about 60% of all purchasing. The Responsible Sourcing program supports the Purchasing function worldwide in making the right decisions on suppliers and upholding the sustainability performance of our supply base.

An extensive modularization program is ongoing that reduces product costs and the product development spend through standardized global modular platforms for new products. The aim is to increase the leverage from the global economies of scale. In 2015, a new phase in these efforts was implemented called Modularization 2.0.

In addition, modularization leads to increased manufacturing flexibility by allowing customization of products at late stages of production.

Competitive manufacturing

The Electrolux Manufacturing System (EMS), which was launched in 2005, is implemented at all production units. The program focuses on continuous improvements in terms of product quality, costs, inventory optimization, occupational health and environmental impact.

The manufacturing cost for major appliances has declined significantly since 2011 and energy use per unit produced has decreased by 41% since 2005. Through the Green Spirit program, which is an integral part of the Electrolux Manufacturing System, targets are set to continuously reduce resource utilization. Improved energy efficiency has lowered annual energy costs by more than SEK 400m a year, and entails a reduction in carbon dioxide emissions of 200,000 tons compared with 2005. The Green Spirit program aims to cut energy usage by more than 50% by 2020 as part of the target of reducing the CO2 impact by 50% by 2020.

Resource efficiency

Electrolux is committed to sustainable growth and, accordingly, efficient use of resources comprises a key component of its streamlining initiatives. Through the Green Spirit program, which is an integral part of the Electrolux Manufacturing System, targets are set to continuously reduce resource use and waste.

The materials used in household appliances comprise primarily steel, plastic and electronic components. Savings in materials are achieved by optimizing the use of materials, without compromising product performance and quality. Electrolux is phasing out chemicals of concern. New scientific findings and stakeholder requirements are used to update the restricted materials list (RML).

The average energy consumption per unit produced in comparable plants has decreased by 18% during the last five years. A new target has been set to achieve a 20% improvement in energy efficiency in plants and warehouses by 2020 compared with 2015.

For society as a whole, over 25% of global carbon dioxide emissions derives from the transport sector. Electrolux has set a target for its core markets to annually reduce emissions by 3%.

Operational resourse efficiency

Read more about Electrolux strategy

The Electrolux strategy channels profitable growth, innovative products, strong brands, operational excellence and dedicated employees to reach its vision – to be the best appliance company in the world.

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To outperform market growth and further enhance profitability, Electrolux is implementing a number of strategic initiatives.

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The Electrolux process for consumer-driven product development enables accelerated development of products that are preferred by increasing numbers of consumers. The collaboration between marketing, R&D and design is a key factor.

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Demand is increasing for products from well-known, global brands with innovative design. New, innovative consumer products are supported by strong links to the Group’s know-how in professional products.

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Outstanding teams and leaders play a crucial role in Electrolux achieving the Group's vision and targets. Employees from diverse backgrounds working toward a common goal allows Electrolux to succeed in developing consumer-relevant appliances across...

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