SAMSUNG Global supply Chain management

Table of content

I. Introduction
1. Thesis statement
2. Report objective
II. Literature review
1. The role of purchasing
2. Buyer-supplier relationship
3. SCM strategy
4. SCM system
5. Logistics in the supply chain
III. Analyze and evaluate on Samsung SCM the target company.
IV. Management recommendation
V. Reference.

I. Introduction
[Link] Statement
This report is about Samsung global supply chain analysis. We have learned a lot of useful knowledge
from the global supply chain management course taught by Ph.D Tran Cong Thanh teaches. Based on
learned knowledge we apply to Samsung global supply chain management analysis.
[Link] objective
The purpose of this paper is to find the improvement on the Samsung global SCM management with
the analysis and evaluation of that base on the several criteria. The standard of analysis are purchasing ,
buyer-supplier relationship, SCM strategy, SCM information flow, SCM logistic : to be applied all Samsung
SCM process one by one. And the analysis and evaluation on the whole process will be from the supply
aspect, such as production, to the demand aspect, such as selling . To sum up, management
recommendation for the improvement of the Samsung Global SCM are the final target.
II. Literature review
1. The role of purchasing
According to the Business Case Study, effective purchasing is able to make an organization to reduce
costs, maintain product quality and control the levels of risk to its supply chain; the purchasing in
this chapter means the step for the production. The performance of any firm is largely determined
by the effectiveness and efficiency of its purchasing activities and the operations of its suppliers
(http:[Link], 2013). And, the purchasing function of the company accounts for a
large part of the companies’ total costs . (Gadde and Håkansson 1993, cited in Åsa Hagberg,
 Andersson, Sören Kock, Sara Åhman). In summary, purchasing in supply chain is significant in view of
cost saving as well as product quality. 2. Buyer-supplier relationship It is general that the buyer-
supplier might have a good and closer relationship in order to achieve the benefits between them:
Win-Win strategy. According to Ford, buyers and suppliers emphasize on the importance of close
relationships, where it is possible to achieve benefits in the form of lowered costs or improved
profits. (Ford, 1984, cited in Åsa Hagberg, Andersson, Sören Kock, Sara Åhman, 2007) It is a sort of
trust between them. By the way, there is a growing demand for lowering the costs at the same time
as the quality should remain at the same level or even improve. (Åsa Hagberg, Andersson, Sören
Kock, Sara Åhman, 2007) That is, this means that the buyer has a right to control the supplier: it is a
kind of power between them. The key word in the buyer and supplier relationship is the balance
between the trust and the power. 3. SCM strategy 4 Performance measurement can be defined as
the process of quantifying the effectiveness and efficiency of action (Neely et al, 1989, cited in
Morteza Shafiee and Negar Shams-e-alam, 2011). And, in the process of evaluating the performance,
the selection the performance measure is significant, because through them, ideas for improvement
might be generated (Morteza Shafiee and Negar Shams-e-alam, 2011). In summary, the performance
measurement and the measurement way of that are crucial in the process of the SCM operation in
aspect of improvement. By and large, the general way of the SCM evaluation is the metric of cost.
Ellram(2002) and Ballow et al(2000) present that the cost metric is convenient and many managers
want to use that. And, as the qualitative and quantitative, Beamon (1999) provides three types of
measures: resource performance measurements, output performance measurement and flexibility
performance measurement. Extending these measures is possible to make a new framework for the
supply chain evaluation that measures strategic, tactical and operational level of performance
(Morteza Shafiee and Negar Shams-e-alam, 2011). Samsung’ evaluation way on the SCM is the
accuracy between planning and actual; to be explored more later.

2. 4. SCM information flow According to K.S. Koppalkar, a general manager at Mangalore Refinery and
Petrochemicals in India, "Supply chain management is not just the flow of physical material but also
the flow of information to various stakeholders such as the suppliers; procurement, finance and
accounts departments of the organization concerned; and the end-user departments involved in
using the material being supplied," ([Link]). And, the supply chain is a kind of network.
Owing to the rapid developments of technology such as pervasive or ubiquitous wireless and
internet networks, the basic supply chain is rapidly evolving into the supply chain network (Hussain
A.H Awad, Mohammad Othman Nassar, 2010). In the supply chain network, the information flow
plays a significant role so as to link, or connect, with all relevant processes. In particular, from the
demand point of view, for example, the customer demand information, it is important that suppliers
are to get the accurate data from the demand side if companies want to get the supply chain
management efficiency. As far as the SCM information flow is concerned, the crucial topic is the
bullwhip effect. The bullwhip effect occurs when the demand order variability in the supply chain is
getting increase as they moved up the supply chain. The distorted information from one side to the
other is able to reach the big inefficiencies (Hau lee, V Padmanabhan, and Seungjin Whang, 1997).
These three scholars recommend that the best ways to solve, or reduce, the bullwhip effect are
integrating new information systems, defining new organizational relationship and implementing
new incentive and measurement systems. In the same sense, Samsung electronics might have the
same problem as well. The three ideas recommended in the above would be able to apply for South
Korean electronics device maker. 5. SCM system: Enterprise Resource Planning (ERP) system What is
the ERP system? According to Webopedia, website, the ERP is business process management system
that allows an organization to use a system of integrated applications to manage the business and
automate back office functions. And, ERP software integrates all facets of an operation, including
product planning, development, manufacturing processes, sales and marketing. In the same
meaning, the ERP systems assist enterprises in automating and integrating corporate cross-functions
such as inventory control, procurement, distribution, finance, and project management. In recent
years as many companies began to search for ways to replace their existing applications running on
mainframes that no longer meet the growing corporate needs, ERP systms have become fixtures to
provide a basis for business process management integration across business functions (Mabert et
al., 2000, cited in J. Michael Tarn, David C. Yen and, Marcus Beaumont, 2002). 5 In aspect of the
meaning of the ERP above, the system might be plays an important role in the supply chain. In
today's competitive global market, one of the most effective ways towards achieving competitive
advantage has been the ability to accelerate the supply chain process through ERP systems. ERP
enables a more efficient internal and external supply chain. (Gordana Matičević, Tadija Lovrić,
Mirjana Čičak, 2007) And using of effective solution related to information and using successful
management made an important bed for survival of big commercial organization (Kazeruny. M.
Kazeruny, 2009, cited in Abbas Sheykhan1, Jafar Tarokh2, Sajad Gheitasy3, 2013). 6. Logistics in the
supply chain Logistical activities have always been vital to organizations, and so business logistics and
supply chain management represents a synthesis of many concepts, principles, and methods from
the more traditional areas of marketing, production, accounting, purchasing, and transportation, as
well as from the disciplines of applied mathematics, organizational behaviour, and economics
(Ronald H Ballou). As a matter of fact, both of them have a close relationship. As far as the logistics in
the supply chain is concerned, another important issue is the cost and sales efficiency aspect. When
management recognizes that logistics and supply chain affects a significant portion of a firm’s costs
and that the result of decisions made about the supply chain processes yields different levels of
customer service, it is in a position to use this effectively to penetrate new markets, to increase
market share, and to increase profits. That is, good supply chain management can generate sales,
not just reduce costs. Thirdly, logistics and supply chain are creating the significant customer value. A
product, or service, is of little value if it is not available to customers at the time and place that they
wish to consume it. When a firm incurs the cost of moving the product toward the customer or
making an inventory available in a timely manner, for the customer “value” has been created that
was not there previously. It is value as surely as that created through the production of a quality
product or through a low price. It is generally recognized that business creates four types of value in
products or services. These are: form, time, place, and possession. Logistics creates two out of these
four values. Manufacturing creates form value as inputs are converted to outputs, that is raw
materials are transformed into finished goods. Logistics controls the time and place values in
products, mainly through transportation, information flows, and inventories (Ronald H Ballou). In
summary, logistics in the supply chain, and that management as well, is one of the crucial factors in
terms of customer value.