Supply Chain Management

7 July 2016

Introduction 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: Warehouses Factories Processing centers Distribution centers Retail outlets Offices google.com

Supply Chain Management Essay Example

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

Problem 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 companies such as the Taiwan-owned AU Optronics Corp (AUO) and Chunghwa Picture Tubes Ltd (CPT). The fourth layer is composed of domestic subcontractors that supply parts that Samsung Electronics could not produce itself. The main companies in this layer include Intops LED Company Ltd, which handles both the production of mobile phone cases and the assembly of mobile phones, and Interflex Company Ltd, which produces printed circuit boards (PCBs). The final layer in the supply chain is composed of small and medium-size parts suppliers located in industrial parks. As these companies supply lowcost parts, Samsung Electronics frequently switches among them, exacerbating price competition. It also imports some parts from China. These are the companies most exploited by Samsung Electronics. Suppliers’ relationships and negotiating power with Samsung Electronics vary dramatically depending on to which layer of the supply chain the suppliers belong.

Challenges faced by Samsung How it can align its processes, horizons and data Process & Logistics expertise Development of Early Signal tools on inventory management, sales, finance and S2S interface (consumption rate, days of supply, Real-time Inventory report) System availability & monitoring

How to overcome these challenges: Adopt product life management (PLM) processes Adoption of demand-driven focus supply chain “end-to-end value chain” perspective Both aim for value chain network strategies

Benefits of Supply Chain Management Improve customer satisfaction by matching his requirements Increase data integrity through limited manual intervention Improve match between Demand and Supply Consolidated and simplified channel Global end-to-end supply chain visibility Provide real-time visibility and early signals to the team members for a pro-active solving of constraints and exceptions Improve speed and productivity by reducing non value added workload. Team members can focus on customer support

Analysis Limitations of Samsung Electronics Globalization that increase supply chain complexity and global sourcing Intensified competition and price pressures coupled with high market uncertainty Shortened and more complex product life cycle

Regulations changes requires companies to consider amount of carbon emission produced in the supply chain The Efficient supply chain: responsive supply chains and agile supply chains which suits to semiconductor and high-tech industries, designed not only to provide responsiveness and flexibility to meet customer needs, but also hedging the risk of supply shortages and disruptions. It has “agile” characteristics as it capable to respond toward high-uncertainty customer demands while minimizing the back-end risks of supply glitches

These are the Alternative Courses of Action to be considered to boost the supply chain performance of Samsung Supply Chain Resilience The supply chain resilience is the ability to be resilient for a system to return to its original state or move to a new and more desirable state after being disturbed. This implies the flexibility of the supply chain system.

Value-chain network strategy

The value-chain network strategy for companies is the integration of the acquisition of supplier or managing an extensively outsourced network of its trading partners. Both aim for value chain network strategies that allow better control of the end-to-end value chain. This includes both upstream and downstream value chain partners, in order to gain better visibility of the whole value chain. Organization as a value chain

This Supply chain organization is no longer limited to either inbound materials management or logistic. Organizations today redefine their supply chain responsibilities to move from traditional functional silos (plan, source, make and deliver) towards an “end-to-end value chain” perspective, often start from customer and moving back up through the suppliers base and new product launch. The role of supply managers is vastly changing with better emphasis on supply market intelligence, collaboration, and operational integration with suppliers (Handfield et al, 2008). Demand-driven excellence

The adoption of demand-driven focus supply chain to influence and manage demand more efficiently. Companies are shifting from the pursuit of efficiency (cost minimization in production and distribution) to responsiveness, matching quantity and variety of products supplied to meet required demands

Product life management The product life cycle of a company needs to adopt product life management (PLM) processes. The advantage of adopting PLM processes is to help companies in aiming common product development processes involving collaboration with suppliers and contract manufacturers. The benefits of applying Product Life Management is the increase the re-use of its parts and decrease cycle to reduce marketing time.

Conclusion Thus, Samsung would be better if it would adopt both the Supply Chain Resilience and the Demand-Driven Excellence

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