Samsung Company and an Analysis of Supplier-Side Supply Chain Management and IT Applications

Samsung Company and an Analysis of Supplier-Side Supply Chain Management and IT Applications

Amber A. Smith-Ditizio (Texas Woman's University, USA) and Alan D. Smith (Robert Morris University, USA)
Copyright: © 2018 |Pages: 13
DOI: 10.4018/978-1-5225-2255-3.ch484
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Abstract

This chapter details the growth of Samsung Electronics Company in its innovative use of automatic identification and data capture technologies in managing supply chain relationships meet goals of operational efficiency and profitably. Through a combination of web and business literature sources and personal interviews, documentation of the company's successfully implemented supply chain management (SCM) applications as well as technological advancements and development are found in the chapter. SCM systems and IT applications documented at Samsung are designed to help provide assistance to other companies dealing with similar issues.
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Introduction

Supply Chain Management

Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. SCM involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective SCM-related system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful SCM, sophisticated software systems with web-based interfaces are competing with web-based application service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service (Von Haartman, 2012).

The discipline of SCM includes the active management of a company’s supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities (Pradhananga, Hanaoka, & Sattayaprasert, 2011).

The organizations that make up the supply chain are linked together through physical flows and information flows. Physical flows involve the transformation, movement, and storage of goods and materials (Idris, Rahman, Hassan, Aminudin, & Alolayyan, 2013; Ketikidis, Hayes, Lazuras, Gunasekaran, & Koh, 2013; Mateen & More, 2013; Varaprasad, Sridharan, & Unnithan, (2013). They are the most visible piece of the supply chain. But just as important are information flows. Information flows allow the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods and material up and down the supply chain. SCM flows can be divided into the product flow, the information flow, and the finances flow (Basu & Nair, 2012; Brito & Botter, 2012; Bulcsu, 2011). The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.

Key Terms in this Chapter

Internet of Things (IoT): IoT is a term that is applied to the general network of physical connected objects (e.g., services, vehicles, buildings and other items) that have mutually connected and enabled hardware, software, sensors, and network connectivity that allows communication and sharing of data and its protocols.

Short Cycle Time and Low Inventory (SLIM) Methodology: In its electronics manufacturing processes. SLIM is a set of methodologies and scheduling applications for managing cycle time in semiconductor manufacturing. SLIM includes methodology for calculating target cycle times and target WIP levels for individual manufacturing steps, heuristic algorithms for factory floor scheduling, and optimization-based capacity analysis.

Automatic Identification and Data Capture Technologies (AIDC): Types of AIDC-related technologies to leave the human element out of the data collection and storage functions of information derived from manufacturing, integrated through the manufacturing process, type of authentication concerns, and/or e-security strategies, and relationship links to customer profiles. Typical types of AIDC include, bar-coding, RFID, magnetic strips, touch memory, and smart cards.

Supply Chain Management/Performance: In basic terms, supply chain is the system of organizations, people, activities, information and resources involved in moving a product or service from supplier to customer. The configuration and management of supply chain operations is a key way companies obtain and maintain a competitive advantage. The typical manufacturing supply chain begins with raw material suppliers, or inputs. The next link in the chain is the manufacturing, or transformation step; followed the distribution, or localization step. Finally, the finished product or service is purchased by customers as outputs. Service and Manufacturing managers need to know the impact of supply on their organization’s purchasing and logistics processes. However, supply chain performance and its metrics are difficult to develop and actually measure.

RFID-Embedded Technologies: RFID technologies are types of automatic data capture techniques that use a combination of active and passive senders and receivers to collect and store codified information for further uses. The implementation of such technologies should lead to improved managerial and/or supply chain performance. On the surface, there appears to be few drawbacks to implementing such technology into a production process, assuming it enhances performance and improves output of the product. The main issues surrounding the RFID applications are whether the initial costs and labor required to utilize this technology are worth it, and will result in a positive outcome of revenues.

Operations Efficiency: Improving efficiency and reducing waste is a major challenge for hospitals and other patient care facilities looking to lower the cost of providing healthcare services. Far and away the largest contributor to operational costs in this industry is patient care activities. Since most clinical decisions involve managing products and medical supplies, finding ways to more efficiently manage supply chain activities can have a big impact on overall operational performance.

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