The portal is directly connected with M Project, the company's internal ERP system developed in Korea, which gives the vendors access to real time information on production plans, purchase orders etc.

While in the first phase, 25 vendors will be involved in e-payments, the target is to make all vendor payments online by the third quarter. LG has tied up with ICICI Bank for the initiative and the software has been developed by LG Software India. The process would minimise payment realisation time from the current 2-7 days. It will also make all information regarding status of payments, fund transfers and account balances available online.

LG will introduce online bidding by mid-April. Details of the components required would be put on site and bids invited online. This reverse auction will help speed up and increase the efficiency of the entire bidding and procurement process. It will also help in faster claim settlements, reduced sorting time and reduced paperwork. According to company sources,``While we had 20 people in the procurement department, these developments will help reduce manpower to 0 by the middle of 2002.'' The surplus staff will be diverted to new developmental activity like vendor upgradation.

The benefits from these B2B initiatives would be several: reduction in inventory and a resultant saving of USD 1 million. LG has reduced inventory for local parts from the earlier 8-10 days to 2 days. By year-end it is targeting inventory levels of one day.

The company has earmarked Rs 15 million for this initiative till mid-2002. Other plans on the anvil include providing facilities for vendor conferencing, chat rooms and extending these facilities to its 25 overseas vendors by June 2001.