Samsung's Supple Chain Management

In the present market, Samsung has to become more competitive due to a mounting pressure on companies to manufacture products faster, in far greater variants and at the least possible costs. Samsung increases it manufacturing efficiencies by using the agile and lean development methodologies together. These are two distinct development methodologies that increase manufacturing efficiencies. The lean development methodology strictly focuses on value through waste minimization. The agile development methodology extends its vision to creating more value with less work. Samsung combined Lean and Agile in order to product the highest-quality finished goods with the lowest production costs.

In one hand, Samsung applies Lean methodology to their suppliers. It provides the company‘s frontend information flows to the upstream supply chains, namely “supplier synchronization”. Samsung uniform each stage of operations from order placement to dispensation with its suppliers in different region all over the world. (SEC‘s annual report for 2010) As the result, Samsung is able to make quick decisions and cope with the fast-changing market demand. Thus, inventory cost will reduce, flexibility increase and waste or non-value added activities will be continuous eliminated across the chain. Consequently, “supplier synchronization” helped Samsung to improve inventory turnovers, inventories accuracy, and workforce productivity.

In the other hand, SEC‘s supply chain focuses on “Agile supply” offering innovative products using collaborative supplier management in order to meet customers changing needs. SEC offers a platform where partners can innovate together with SEC in the light of products and processes. In addition to keeping developing its strength in making decent and fancy hardware features, SEC shifts to mid- and high-end products that yield higher margins than functional products. Since SEC implements the newest technologies, collaborates with suppliers, and streamlines...