The Electrolux business model focuses on creating best-in-class consumer experiences.Read more
Electrolux ensures a competitive cost structure by focusing on continuous efficiency improvements in variable product costs as well as structural costs. Striving to minimize complexity and make work practices simpler is the foundation of a stable and focused organization.
Efforts to optimize operations have a focus on modernization, automation and adjustments to existing plants to ensure a competitive cost structure. The foundation for this is a stable and focused organization that strives to minimize complexity and make work practices simpler to deliver products and services of superior quality and high delivery reliability.
Variable product costs
A number of programs aimed at enhancing efficiency are ongoing within the Group with the aim of reducing the variable product costs every year. Efforts focus on global coordination of procurement and the Electrolux Manufacturing System (EMS) to reduce manufacturing costs. The Group has implemented a number of new initiatives to increase efficiency and reduce costs, for instance, a cost excellence program is in operation to promote quicker and more effective processes. Increased automation and digital processes for closer collaboration with Electrolux suppliers will help to reduce costs, improve product quality and develop new products.
An extensive modularization program is ongoing that lowers product costs and the product development spend through standardized global modular platforms for new products. Modularization leads to increased flexibility by allowing customization of products at late stages of production, supported by a more digitalized purchasing process and implementation of a system to enable better communication with suppliers and retailers.
In 2015, a new phase in these efforts was implemented called Modularization 2.0, which has continued in 2016. This entails expansion of the project from its initial focus of reducing product complexity and savings on the direct cost of materials, to improvements in five primary areas: automation, digitalization, increased pace of innovation, quicker time to market for new products, and reduced material and payroll expenses.
The Group strives to continuously reduce its structural costs. For this purpose, and through an improved way of working, a higher resource efficiency and increased usage of digital tools and processes, the Electrolux Continuous Improvement Program (ECIP) was launched during 2016. Efficiency within sales and administration is driven by items including shared IT systems and service centers for finance and accounting. Legal entities are reviewed and merged continuously to create shared infrastructures for all regions.
Electrolux is committed to sustainable growth and, accordingly, efficient use of resources comprises a key component of this. Through the Green Spirit program, which is an integral part of the Electrolux Manufacturing System, targets are set to continuously reduce the use of resources.
For more information on Resource efficiency.
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Read more about Electrolux strategy
To create best-in-class consumer experiences means focusing innovations on what consumers can achieve through the Group’s products and solutions.Read more
Outstanding teams and leaders play a crucial role in Electrolux achieving the Group's vision and targets. Teamship is the Electrolux way of working to build high-performing teams.Read more