Case #2: The Supply Chain Management of Samsung Electronics
Samsung Electronics is a global leading company in the electronics industry. It applies and organizes its supply chain activities to create resilience toward highly volatile market and generate competitive advantages against its peers. The Supply Chain Management of Samsung includes the sequence of its organizations’ facilities, functions and activities that are involved in producing and delivering product or service. Their design of supply chain management is central to the organization as it promotes the company’s effectiveness and efficiency in the future. There have been some significant challenges in this highly competitive company in its supply chain management.
Facilities of Samsung’s Supply Chain Management:
The role of Supply Chain Management in Samsung Electronics is very important for the company’s production and manufacturing processes. It improves the overall operations of the company
It increases the levels of outsourcing
It increases transportation costs
The presence of Competitive pressures
It increases globalization
It increases the importance of e-commerce
Helps simplify the complexity of supply chains
It manages inventories of the company
Objectives of the Study
With the complexity of the role of supply chains in organizations, it is best to determine what type of strategies must be implemented to maximize the full capacity of Samsung Electronics operations and to minimize costs. The following are the main aims and objectives of this case study. To determine the best supply chain strategies in accommodating a demand-driven market To be able to address the uncertainties in Samsung’s market
Choosing the right Supply Chain Strategy to address uncertainty
Samsung’s take on its Supply Chain Management
“To mis-quote a famous phrase, the end-product is only as good as its parts. Similarly, we can only achieve improvements to the sustainability performance of our products by working in cooperation with our suppliers. Our products are made of many thousands of components, each of which may contain priority chemical substances or have an impact on energy efficiency. ”
Samsung Electronics have a comprehensive environmental program for their suppliers called Eco-Partner which is designed to reduce the environmental impact of the company’s processes and the supplier’s manufacturing operations.
Eco-Partner Certification Program
Samsung Electronics Eco-Partner Certification Program is a comprehensive environmental initiative to support our suppliers to reduce the environmental impact of both the materials they supply and their own manufacturing operations. This program applies to all suppliers of core products, parts, components and raw materials (including packaging materials). To become an Eco-Partner certified company, suppliers must fulfill two main criteria: Compliance with the Samsung Electronics Standards for Control of Substances concerning Product Environment Demonstration of an adequate environmental management system.
Layers of Samsung Electronics’ Supply Chain
The first layer is composed of Samsung Group subsidiaries and accounts for roughly 11 percent of the value of components purchased by Samsung Electronics. The second layer is made up of transnational electronics component suppliers who have independent technical capability. The American companies Qualcomm, which has a CDMA patent, and 3Com, which has a wireless patent, are examples of companies in this layer. The third layer comprises suppliers to which Samsung Electronics outsources parts production that it could produce itself, but chooses not to for cost or production capacity reasons. These companies principally supply small-scale LCD panels. Samsung Electronics gets these low-price LCD panels from...
References: Rosyada, Kurnia Sofia. "Creating Competitive Advantages through Resilient Supply Chain – Case Study: Samsung Electronics." Creating Competitive Advantages through Resilient Supply Chain – Case Study: Samsung Electronics1 (2013): n. pag. Slide Share. Web. 15 July 2013.
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