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Operation Management and Supply Chain of Samsung
Operation Management and Supply Chain of Samsung
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Student Number:2054034
Date:5/13/2022
Table of Contents
1.0 Introduction............................................................................................................................5
2.0 Supply Chain of Samsung.......................................................................................................6
2.1 Input..........................................................................................................................................6
2.2 Process.....................................................................................................................................6
2.3 Output.......................................................................................................................................6
3.0 Upstreaming supply chain of Samsung...............................................................................8
4.0 Operation management of Samsung.....................................................................................9
4.1 4Vs of operation management............................................................................................9
5.0 Operation processes and layout..........................................................................................11
5.1 Operation Layout..................................................................................................................13
6.0 Downstream supply chain.....................................................................................................14
7.0 Possible issues with operations and supply chain of Samsung..................................15
8.0 Project planning and management of Samsung..............................................................17
8.1 Agenda of the project..........................................................................................................17
8.2 Elements of Project process and plan............................................................................17
Conclusion.......................................................................................................................................20
References...........................................................................................................................................21
Appendices......................................................................................................................................26
Appendix 1.1................................................................................................................................26
Appendix 1.2................................................................................................................................26
Appendix 2...................................................................................................................................26
Executive Summary
This report will discuss about the operations management, supply chain and distinct
project plan of Samsung. Samsung Group has huge number of subsidiaries, all of
which produce huge range of product and services. But the report discussion has
mostly narrowed down to Samsung electronics, Samsung SDI and Samsung C&T.
The report discusses Samsung’s supply chain which includes upstreaming and down
streaming supply chain and how it has made substantial use of SCM strategies and
process improvements to support and improve its operation. the report talks about
the various supplies that Samsung has maintained. The following report has also
explained the 4V typologies of operation management of Samsung with relative
theories to support them. Furthermore, the operation process and layout are
discussed and its possible issues relating to it is also given. Lastly a project plan of
developing a new Operation System for the smartphones as a recommendation is
included in this report.
1.0 Introduction
The company chosen for this case is Samsung. Why Samsung? Because it is one of
the largest international electronics companies. Samsung, a South Korean company
was created by Lee Byung-chul in 1938, originally it was a trading store. Samsung
traversed the level of the electronic industry in the period of late 1960. Samsung
Electronics is currently a brand with 116 subsidiaries spread across 70 countries. It is
a major producer of industrial and consumer electronics., covering machines,
multimedia devices, processors, memory chips, and integrated systems
(Bondarenko, 2021). It entails various affiliated companies, the mainstream of which
are incorporated as the Samsung brand. It has the 8th highest brand value worldwide.
Technology's best-known brands Samsung contributes for almost twenty percent of
South Korea's total sell overseas. The market capitalization of Samsung is $355.66
Billion as of May 2022 which makes it the world’s 19 th most valuable company
(companiesmarketcap, 2022). Samsung’s major products are their smartphones.
Samsung had 23.4 percent global smartphone market share in the first quarter of
2022 (statista, 2022). Its revenue of the year 2020 was about $232 billion which was
a 18% growth rate from the previous year and in 2021 Samsung electronics revenue
went up to approximately $244.4 billion (gsmarena, 2022).
2.1 Input
Over 2,500 companies are part of Samsung Electronics' enormous supply chain.
AT&T Store, Sprint Store, T-Mobile Store, US Cellular Store, and Verizon Stores
globally are some of the biggest suppliers. Some provide raw materials or
components, while others provide equipment; yet all are essential in input.
(Samsung, 2022).
2.2 Process
Samsung has manufacturing plants in seven countries worldwide. Its major factories
are from its home nation of South Korea and in China, where their products are
procured from its associate companies and are manufactured (Perez, 2022).
2.3 Output
Samsung’s supply chain is made to consistently meet the changing technical world
to achieve a competitive edge in the global environment. Samsung supply chain is
also designed to result in low cost of production which was possible due to its
manufacturing plants offshore. For example, if there is a shift in manufacturing plant
physical site, it is vital to implement minor adjustments in Samsung’s supply chain
primary model, but this will in future eventually lower cost of production (Yoo & Kim,
2015).
Volume typology gives an idea about the amount of a specific produce that must be
manufactured to meet marketplace call (financialexpress, 2021). Samsung is a high-
volume manufacturing company with nearly 73.6 million units of smartphones sold in
the first quarter of 2022 (statista, 2022). Hence, they have a high level of consistency
in their product delivery. They have well-established processes and are hence
assured of repeating production at high speed due to process familiarity and
implementation of scheduling process.
Variety typology is all about diversity of products that are manufactured and sold to
the customer (financialexpress, 2021). If we ought to choose Samsung’s smartphone
division then it comes in various models: M, A, S, and foldables. M are low-price
series, A is mid-price, and S, foldables are flagship series. Furthermore, each series
are dressed in a range of colors, storage sizes, and features (Samsung, 2021).
Selling variety of goods increases trades and income while reducing a company’s
dependence on one or two products, which can lead to business to shut down if
demand for that product dies. Like Samsung discontinued Note series in 2022.
Cost – Samsung uses low-cost structure and high awareness of economic events.
For example, During the Asian financial crisis in the 1990s, Samsung reduced
expenses and reemphasized product quality and mass flexibility, allowing its
electronics to travel from the project phase to store shelves in six months (ipl , 2022).
Hence, gaining competitive advantage. For more information on performance
objectives refer to Appendix no. 2
Some of the Samsung Group key subsidiaries and their product are as follows:
can require a considerable time and business investment. Because of the significant
investment involved in items such as equipment, installing a new layout or modifying
an existing layout in many activities can be difficult to change once established. Fig.
3 shows the plant layout of Samsung SDI (battery manufacturing company). Usually
in manufacturing factories of Samsung line operation layout is implemented where
each product in the assembly line has a linear path of activities that match up to
sequence of specialized processes.
Downstream supply chain involves those activities where the finished goods are
cleared out from the organization to the customers or to the market. It is a part of the
supply chain based on how products are distributed (Cirtita & Glaser‐Segura,
2012). As Samsung is a global brand, the products made in its manufacturing and
assembly facilities are distributed to markets all over the world. Since logistics is an
integral part of the supply chain. For outbound logistics from manufacturing plants to
stores and distributors across the countries. Samsung Electronics Logitech
(SELC) and Samsung SDC are the two largest logistics companies of Samsung,
both of which were once part of the core Samsung firm. Samsung Electronics
Logitech solely ships Samsung Electronics items to over 120 countries worldwide.
Aside from that, it also delivers marketing and sales support to Samsung Electronics
for the sale and distribution of its products to customers all over the world (Pratap,
2022). Moreover, Samsung has an agreement with Russian railways to deliver its
product from Korea or China to eastern Europe. Thus, this route reduced the lead
time from 50 days to 18 days and saved money on logistics (Railwaypro , 2016).
From the stores and distributors, the lead time after an order has been placed is one
to five business days after confirmation where shipping is free for customers. If the
customer wants express delivery, then lead time is only one day but at a cost of $19
(Samsung, 2022). Hence, Samsung ensures that their product is delivered safe,
secure, and fast which gives a plus point for competitive advantage and enhances
their value chain. Additionally, it also adds importance to their finished goods and
service not as a cost.
Although Samsung has all the positive aspects of operation and supply chain
management and all the benefits it holds, there are still some issues within it. These
problems can be investigated by evaluating the core situation of the company.
The larger and more complicated a supply chain network becomes, the harder it
would be to see into deep layers and obtain a complete picture of a product's
lifespan. Many supply chain challenges could be examined by breaking down and
recalling to a failure to communicate and cooperate between both internal
departments and retailers. In the case of Samsung Note 7 battery exploding case it
blamed that problem to one of its battery providers which was not officially
confirmed. Moreover, the replaced devices also caught on fire which made it clear
that the issue was deeper in the supply chain and the company does not know about
it. This shows lack of visibility and integration (strategicsourceror, 2016). However,
the company can overcome this failure by bringing out robust quality control team.
Another supply chain issue of Samsung is notable shortage of non- memory chip
caused by high demand of 5G devices. The challenges have increased with the
Omicron Covid which adds disturbance to logistics operation (Briançon, 2022).
Since Samsung smartphones not having its own Operating System is quite
concerning and currently in its tipping point this issue can jeopardize the competitive
edge that they have. The objective of the following project is to maintain the
competitive edge with its rival Apple for that the project is to make an Operating
System to test out to reviewers and tech enthusiastic teams and then rolling out the
OS. The Scope of this project is Samsung may use this project in terms of
developing a superior smartphone product capable of competing effectively in the
global market. As one of the leading businesses in the electronics industry,
implementing this project and using best approaches of quality management
Samsung can undoubtedly produce great results.
Conclusion
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Appendices
Appendix 1.1
Appendix 1.2
Appendix 2
Quality - Samsung has solidified its image in modern-day society. To maintain its
image as a high-performance organization, Samsung has focused heavily on product
quality, continuously revising relevant standards, and strictly controlling output
(Yulianda & Handayani, 2015).