Case Study Chapter 1: Network map

1. Select a multinational company from the list

Samsung Group is a South Korean mutinational manufacturing conglomerate headquartered in

Samsung Digital city, Suwon, South Korea. At present, with the success of its electronics
business, Samsung is an internationally recognized industry leader in technology and a Top 10
global brand. In this assignment, the authors choose Samsung as the main research object for
all the case studies due to its multinational business activities which logistics management holds
an extremely important role.
2. Choose one of their main products and construct a network map

We decided to construct a network map of supply chain model of Samsung’s smartphone in

Viet Nam due to the data that the group found. The network map is proposed in figure 1.1 as
follows.

Figure 1.1: Samsung Smartphone Network map

Soure: Compiled by authors

Case Study Chapter 1: Order winners and qualifiers

3. what are potential order winners and qualifiers for your product

Samsung has a variety of product series to serve different segments. Two of them are Samsung
galaxy A smartphone series and Samsung galaxy S smartphone series. If S-series focus on high-
end customer segment, the A-series is aimed at mid-range and affordable customers. In this part
of the assignment, the group decided to construct a table to figure out the order winners and
qualifiers of these two product series.
Table 2.1: Order winners and qualifiers
Samsung Galaxy A series Samsung Galaxy S series
Product range Wide: Many colours, Choices of Wide: Many colours, Choices of
ROM, Screen size ROM, Screen size
Design - Common design with plastic - Luxury design with Armor
material Aluminium material
- Thick screen border - Thin screen border
- Light weight - Medium weight
 - High shockproof ability - Very high shockproof ability
Price Mid-range ($110-$600) High ($1000-$2500)
Phone back Plastic Glass
material
Camera quality Acceptable - Ultra wide camera and telephoto
camera both have high
resolution level
- Obtical image stabilization
- Zoom ability
- Taking photo in the dark
Screen - Big screen - Big screen
- IPS LCD screen - Luxury AMOLED screen
- Low refesh rate - High refresh rate
- Acceptable brightness, contrast - High brightness, contrast
Configuration Acceptable configuratuon which New and modern micro chip,
can afford almost needs from usually, chipset Snapdragon, which
customers with good speed and can satisfy all needs from
smoothness customers
Order winners Price - Design
- Quality (Camera,Configuration,
Material, Screen)
Order - Design - Price
qualifiers - Quality (Camera,Configuration) - Availabity
Logistics - Cost - Speed
Priorities - Dependability - Flexibility
- Quality - Quality
Source: Compiled by authors

Case Study Chapter 2: Supply chain segmentation

4. Conduct a market segmentation for your chosen product

In this case study, the group determines market segmentation for Samsung smartphones by
applying the four-step approach.
❖ Step 1: Identify the Customer Demand Signal to which the supply chain will respond
Customer Demand Signals include:
➢ Product Type Demand: High-end flagship models, mid-range models, budget models.
➢ Feature Preferences: Camera quality, battery life, screen size, processing power.
➢ Geographic Demand: Varies significantly by region (e.g., high-end models in
developed markets, budget models in emerging markets).
➢ Sales Channels: Online sales, brick-and-mortar retail, carrier partnerships.
➢ Seasonal Demand: Peaks during new product launches, holiday seasons, back-to-
school periods.
❖ Step 2: Conduct a Demand Profiling Analysis Using Demand Volume and Variability
➢ High-End Flagship Models:
▪ High volume, high variability: Positioned in the top right.
➢ Mid-Range Models:
▪ Moderate volume, moderate variability: Positioned in the center.
➢ Budget Models:
▪ High volume, low variability: Positioned in the bottom right.
 ➢ Geographic Segments:
▪ Developed Markets: High variability due to frequent new releases.
▪ Emerging Markets: Low variability, steady demand.
➢ Sales Channels:
▪ Online Sales: High variability, low volume.
▪ Retail Stores: Low variability, high volume.
▪ Carrier Partnerships: Moderate variability, moderate volume.
❖ Step 3: Identify the Key Supply Chain Segments
Key Supply Chain segments:
➢ Flagship Segment:
▪ Focused on high-end smartphones with advanced features.
▪ High variability in demand, requiring agile and responsive supply chain.
➢ Mid-Range Segment:
▪ Balanced focus on performance and cost.
▪ Moderate variability, requiring a mix of agility and efficiency.
➢ Budget Segment:
▪ Focused on affordability and basic features.
▪ Low variability, requiring efficient and cost-effective supply chain.
➢ Geographic Segments:
▪ Developed Markets: Demand for high-end and mid-range models.
▪ Emerging Markets: Demand for budget models.
➢ Sales Channel Segments:
▪ Online: Requires agility to respond to high variability.
▪ Retail: Requires stable and consistent supply.
▪ Carrier: Steady supply, often tied to contracts.
❖ Step 4: Develop Tailored Practices for Each of the Supply Chain Functions Involved
Table 4.1: Tailored Practices
Supply Demand Inventory Production Logistics
Chain Planning Management
Segment
Flagship Use advanced Maintain Utilize agile Use expedited
Segment analytics and flexible manufacturing shipping options
market inventory levels processes to ramp to ensure quick
intelligence to to respond to up production delivery during
predict demand variability quickly during launch periods
spikes launches
Mid-Range Combine Balance Implement a Optimize logistics
Segment historical sales inventory to flexible production for cost-efficiency
data with manage schedule to adapt with the ability to
market trends moderate to demand scale during
for forecasting variability changes promotions
Budget Use steady Maintain high Focus on cost- Optimize for cost-
Segment historical data inventory effective, high- efficiency, using
for accurate turnover to volume bulk shipping
demand minimize costs manufacturing methods
forecasting processes
 Developed Incorporate Use regional Allocate high-tech Use fast and
Markets local market warehouses to production reliable logistics
intelligence ensure quick facilities to cater partners
and fulfillment to high-end model
promotional requirements
calendars
Emerging Leverage Centralized Focus on high- Use cost-effective
Markets steady demand inventory to volume, low-cost shipping and local
data and optimize production distribution
economic distribution facilities networks
indicators
Online Use real-time Keep flexible Implement fast Implement fast
Sales data analytics inventory levels manufacturing shipping options
for demand to handle spikes adjustments to and easy returns
forecasting match demand process
Retail Sales Align forecasts Maintain stable Ensure continuous Ensure regular
with retail stock levels in production to replenishments
promotions and stores and avoid stockouts and efficient last-
events regional mile delivery
distribution
centers
Carrier Use contract- Coordinate with Maintain steady Ensure timely
Partnerships based demand carriers for production aligned delivery to carrier
forecasting steady supply with contract distribution
requirements centers
Source: Compiled by authors
By identifying specific customer demand signals and conducting a detailed demand profiling
analysis using a volume-variability coordinate system, Samsung can segment its supply chain
into key areas: flagship, mid-range, budget, geographic, and sales channel segments. Tailoring
supply chain practices to each segment ensures an optimal balance of agility, efficiency, and
cost-effectiveness, ultimately enhancing responsiveness to market demands and improving
overall supply chain performance.

Case Study Chapter 3: Cost structure

5. Develop a “total cost cube” for your product by indentifying the different types of costs that
occur in your business

The table 5.1 below is created to describe the “total cost cube” for a Samsung smartphone
product involves categorizing costs along various dimensions such as variable/fixed,
direct/indirect, and engineered/discretionary.
Table 5.1: Total cost cube for a Samsung smartphone
Raw Materials: The expenses incurred for
essential components like the display panel,
Variable Costs & processor, memory chips, camera modules, battery
Variable Costs
Fixed Costs cells, and the chassis.
Labor Costs per Unit: Wages and benefits for
assembly line workers or contractors directly
 involved in the production of each smartphone
unit.
Packaging: Costs of materials for packaging,
including boxes, user manuals, protective films,
and inserts.
Shipping: Transportation expenses for delivering
finished products from manufacturing facilities to
distribution centers or retailers
Commissions: Sales commissions paid to retail
partners or distributors for selling Samsung
smartphones.
Manufacturing Facilities Rent: Lease expenses
for production facilities, including factories and
assembly lines.
Salaries of Permanent Employees: Base salaries
and benefits for permanent staff engaged in
management, quality control, and maintenance.
Fixed Costs
Equipment Depreciation: Depreciation charges
for machinery, tools, and equipment used in the
manufacturing process.
Administrative Expenses: Overhead costs
associated with administrative functions such as
finance, legal, and human resources.
Materials: Expenses directly linked to the
physical components used in the production of
Samsung smartphones.
Direct Labor: Compensation for workers directly
Direct Costs engaged in assembling, testing, and packaging
smartphone units.
Manufacturing Overhead: Overhead expenses
directly associated with production activities, such
as factory utilities and maintenance.
Utilities: Costs related to electricity, water, gas,
Direct Costs &
and other utilities necessary for operating
Indirect Costs
manufacturing facilities.
Factory Maintenance: Expenditures for
maintaining and repairing factory equipment,
infrastructure, and buildings.
Indirect Costs
Administrative Salaries: Wages and benefits for
administrative personnel not directly involved in
production but essential for overall operations.
Overhead Costs: Indirect overhead expenses like
rent, insurance, and taxes that support general
operations.
Component Costs: Expenses associated with
specific components designed or engineered into
Samsung smartphones, such as advanced display
Engineered Costs
Engineered technologies, camera sensors, or biometric
& Discretionary
Costs features.
Costs
Technology Licensing Fees: Payments made for
licensing patented technologies or software
integrated into Samsung devices.
 Advertising Expenses: Costs related to marketing
campaigns, promotional events, and advertising
materials aimed at boosting Samsung smartphone
sales.
Research and Development: Expenditures for
developing new features, enhancing existing
Discretionary
technologies, or conducting market research to
Costs
innovate Samsung smartphones.
Marketing Campaigns: Funds allocated for
promotional activities, sponsorships,
endorsements, and influencer marketing initiatives
to increase brand visibility and drive smartphone
sales.
Source: Compiled by authors
Combining these dimensions into a "total cost cube" would provide a comprehensive view of
the various costs associated with producing a Samsung smartphone. Each cost category within
the cube would represent a different combination of these dimensions, offering insights into the
overall cost structure of the product.

Case Study Chapter 3: Balanced scorecard

6. Develop a balanced scorecard for your company – who are stakeholders and what are their
interests ?

The authors defined the stakeholders of Samsung as its customers. The table below shows the
balanced scorecard which focuses on Samsung’s customers’ interest.
Table 6.1: Samsung Balanced scorecard
Metric Measurement unit Way to measure Target
Net Promoter Score Conduct regular surveys asking Maintain NPS
(NPS) customers how likely they are above industry
to recommend Samsung average
Customer smartphones to others on a
satisfaction likert scale of ten. Calculate
NPS as the percentage of
promoters (9-10) minus the
percentage of detractors (1-6)
Product Failure Rate Track the number of reported Reduce product
defects or malfunctions in failure rate by
Samsung smartphones over a 10% annually
specified period and divide by
Product the total units sold to calculate
quality and the failure rate.
reliability Mean Time Between Calculate the average time Increase MTBF
Failures (MTBF) elapsed between failures of to exceed
Samsung smartphones. Measure industry
by dividing the total operational benchmarks
time by the number of failures.
Number of Patents Count the total patents filed by Increase the
Innovation
Filed Samsung related to smartphone number of
and
technologies.
 Technology patents filed by
leadership 15% annually
Adoption Rate of Analyze sales data to determine Achieve a 70%
New Features the percentage of customers adoption rate for
who have purchased new features
smartphones featuring new within six
innovations within a specified months of launch
time frame.
Price-Performance Calculate the ratio of the Maintain a
Ratio perceived value of Samsung competitive
smartphones (based on price-
customer feedback) to their performance
price point. Higher ratios ratio
indicate better value for money.
Value for
Total Cost of Estimate the total cost incurred Ensure Samsung
money
Ownership (TCO) by customers over the lifecycle smartphones
of owning a Samsung offer a lower
smartphone, including purchase TCO compared
price, maintenance, and usage to competitors
expenses. over the product
lifecycle
Average Response Track the time taken for Reduce average
Time for Customer Samsung's customer support response time by
Inquiries team to respond to customer 20%
inquiries across various
Customer
channels (phone, email, chat).
Support and
First Contact Calculate the percentage of Achieve a first
Service
Resolution Rate customer issues resolved contact
successfully during the first resolution rate of
interaction with Samsung's 90% or higher
support channels.
Source: Compiled by authors
By focusing on these key peformance indicators aligned with customer interests, Samsung can
enhance customer satisfaction, loyalty, and advocacy while driving continuous improvement in
product quality, innovation, value proposition, and customer service across its smartphone
offerings.

Case Study Chapter 4: Location analysis

7. Which network structure and geographical location would you recommend for your company
? What are the perceived advantages of that structure ?

For Samsung, a global technology conglomerate with diverse product lines including
smartphones, electronics, and appliances, a matrix organizational structure combined with a
decentralized geographical approach would be beneficial. Here's why:
❖ Matrix Organizational Structure:
➢ Cross-Functional Collaboration: A matrix structure fosters collaboration across
different departments such as research and development, marketing, and manufacturing,
enabling seamless integration of expertise for product development and innovation.
 ➢ Flexibility and Adaptability: This structure allows Samsung to quickly adapt to
changing market demands and technological advancements by leveraging specialized
teams that can be assembled or disbanded as needed
➢ Efficient Resource Utilization: Resources, including talent and technology, can be
allocated efficiently across various projects and product lines, maximizing productivity
and innovation.
❖ Decentralized Geographical Approach:
➢ Local Market Understanding: Establishing regional offices or subsidiaries allows
Samsung to gain a deeper understanding of local market dynamics, consumer
preferences, and regulatory requirements, enabling the customization of products and
services to suit diverse markets.
➢ Faster Decision-Making: Decentralization empowers regional managers to make
decisions autonomously based on local insights and needs, leading to faster response
times and improved customer satisfaction.
➢ Risk Mitigation: By diversifying operations across different regions, Samsung can
mitigate risks associated with geopolitical instability, economic fluctuations, and natural
disasters, ensuring business continuity and resilience.
❖ Recommended Network Structure:
➢ Centralized Core Functions: Core functions such as research and development,
strategic planning, and global branding should be centralized to maintain consistency,
synergy, and alignment with corporate objectives.
➢ Decentralized Regional Operations: Regional offices or subsidiaries should be
established in key markets around the world, each responsible for sales, marketing,
distribution, and customer support tailored to local needs.
❖ Geographical Locations:
➢ Asia-Pacific: Establish a strong presence in key markets such as South Korea, China,
India, and Southeast Asia, which offer significant growth opportunities and serve as
manufacturing hubs.
➢ North America: Expand operations in the United States and Canada to tap into
advanced technology ecosystems, innovation hubs, and affluent consumer markets.
➢ Europe: Strengthen market leadership in Europe by focusing on countries like
Germany, the United Kingdom, and France, known for their strong purchasing power
and technological sophistication.
➢ Emerging Markets: Target emerging markets in Latin America, Africa, and the Middle
East for future growth potential, leveraging Samsung's reputation for quality and
innovation to capture market share.
By adopting this network structure and geographical approach, Samsung can optimize its
operations, enhance market responsiveness, and sustain competitive advantage in the global
smartphone industry.
In Vietnam, Samsung already has a significant presence and has been a key player in the
country's electronics manufacturing industry. The group plans to give some recommendations
for Samsung's geographical locations and activities in Vietnam to finish this segment of the
assignment.
❖ Manufacturing Facilities:
➢ Samsung should continue to expand its manufacturing operations in Vietnam,
leveraging the country's abundant labor force and favorable business environment.
➢ Establishing additional production facilities or expanding existing ones in industrial
zones such as Bac Ninh, Thai Nguyen, and Ho Chi Minh City can help meet growing
global demand for Samsung products.
❖ Research and Development (R&D):
➢ Invest in R&D centers in Vietnam to tap into the country's pool of engineering talent
and foster innovation tailored to local and regional needs.
➢ Collaborate with Vietnamese universities and research institutions to develop new
technologies and solutions for Samsung's global product portfolio.
❖ Sales and Distribution:
➢ Strengthen Samsung's retail presence in Vietnam by expanding its network of stores and
authorized dealers nationwide.
➢ Develop strategic partnerships with local retailers and e-commerce platforms to enhance
product accessibility and visibility across urban and rural areas.
❖ Customer Service and Support:
➢ Enhance customer service and support capabilities by establishing service centers and
hotlines in major cities to provide timely assistance and repair services for Samsung
products.
➢ Invest in training programs for service technicians to ensure high-quality after-sales
support and customer satisfaction.
❖ Corporate Social Responsibility (CSR):
➢ Engage in CSR initiatives to contribute to the local community and promote sustainable
development in Vietnam.
➢ Support education and vocational training programs to empower Vietnamese youth with
the skills needed for employment in the technology sector.
By focusing on these initiatives and further integrating its operations in Vietnam, Samsung can
continue to leverage the country's strategic advantages as a manufacturing and innovation hub
while contributing to Vietnam's economic growth and development.

Case Study Chapter 4: Supply chain risks

8. (1) Map out risk considerations for suppliers; for regions in the supply chain; at a micro and
macro level. (2) Consider what flags could be used to monitor risk. (3) Develop possible
response actions against the occurrence of risk factors.

In the eighth part of the assignment, the table 8.1 below is conducted to map out risk factors in
Samsung supply chain as required in case study. The flags and posible responses are also figured
out for each factors listed.
Table 8.1: Risk considerations
Risk factor Driver/flag Possible response to flag
Financial Stability Late payments, Diversify the supplier base,
(Risk of suppliers requests for negotiate payment terms,
facing financial renegotiation of and monitor financial health
difficulties or contracts, or news of through regular financial
bankruptcy, resulting financial difficulties assessments
Supplier in disruptions to the in industry
risks supply chain) publications

Ethical Compliance Reports of labor Enforce supplier codes of

(Risk of suppliers violations, conduct, conduct ethical
engaging in unethical environmental fines, sourcing audits, and provide
practices such as labor or negative media
 violations or coverage related to training on ethical business
environmental non- supplier practices practices
compliance,
damaging Samsung's
reputation)

Geopolitical Risks Political unrest, trade Diversify sourcing

(Risk of political sanctions, or locations, monitor political
instability, trade diplomatic tensions developments, and establish
disputes, or regulatory reported in contingency plans for
changes in key mainstream media or alternative supply routes
regions impacting government
Regions in sourcing, advisories
supply chain manufacturing, or
where there distribution)
may be a
higher risk Infrastructure Risks Reports of Explore infrastructure
profile (Risk of inadequate transportation improvements, invest in
infrastructure or delays, supply chain transportation alternatives,
logistics capabilities bottlenecks, or and develop redundancy
in certain regions infrastructure plans for critical supply
hindering the flow of investment plans in chain nodes
goods along the key regions
supply chain)
Quality and Increasing defect Implement stricter quality
Reliability (Risk of rates, frequent control measures, conduct
suppliers providing product recalls, or supplier audits, and develop
Micro level substandard quality declining supplier supplier improvement
risks in the materials or performance ratings programs
supply chain components, leading
to product defects or
failures)

Natural Disasters Severe weather Develop disaster

(Risk of natural alerts, geological preparedness plans, invest
disasters such as risk assessments, or in resilient infrastructure,
earthquakes, floods, historical data on and collaborate with local
Macro level
or hurricanes past natural disasters authorities on risk
risks in the
affecting production in specific regions mitigation measures
supply chain
facilities or
transportation
networks)

Source: Compiled by authors

By mapping out these risk considerations, monitoring relevant flags, and implementing
proactive response actions, Samsung can strengthen the resilience of its supply chain and
mitigate the impact of disruptions on its operations and customers.
Case Study Chapter 5: Time-based process mapping

9. Select one process of your company and create a time-based process map (use public sources
an estimates for the times involved).

In this part, the time-based process map for the manufacturing process of Samsung smartphone
is shown in figure 9.1 including the main stages and estimated times for each stage. Besides,
the table 9.1 gives the information about each stage in the process.

Figure 9.1: Time-based process map for the manufacturing process of Samsung smartphones
Source: Compiled by authors
Table 9.1: Clarification of stages in process
Stages Days Time frame Activities Notes
Component 0-29 2-4 weeks Ordering, shipping, and Time varies based on
Procurement receiving components supplier location and
from suppliers. shipping methods.
Assembly 29-36 1 week Assembling the Includes both manual and
procured components automated assembly
into fully functional processes.
smartphones.
Testing 36-41 3-5 days Conducting various Ensures all smartphones
tests, including meet Samsung’s quality
functionality, standards.
performance, and
quality checks.
Packaging 41-43 1-2 days Packaging the tested Includes boxing, labeling,
smartphones into retail- and preparing for
ready boxes. shipment.
Warehousing 43-45 1-3 days Storing packaged Prepares inventory for
smartphones in regional distribution to various
warehouses for markets.
distribution.
Source: Compiled by authors
This time-based process map provides a clear and structured overview of the manufacturing
process for Samsung smartphones, detailing each key stage and the estimated time required for
each. The figure 9.1 visually represents the progression and timeline of the entire manufacturing
process, helping to understand the flow from component procurement to warehousing.
Case Study Chapter 6: Push/Pull boundary

10. Depic the basic process of your product through supply chain and state where the Push/Pull
boundary (also: customer order decoupling point) should be. Justify your decision.

Figure 10.1 below shows the basic process of a Samsung smartphone through supply chain and
the proposed Push/Pull boundary (also: customer order decoupling point - CODP).

Figure 10.1: basic process of a Samsung smartphone and the proposed Push/Pull boundary
Source: Compiled by authors
To have a better understanding of figure 10.1, the explaination of each module in the process is
given as follows:
• Component Suppliers: Provide various components such as processors, memory chips,
screens, etc.
• Assembly Plants: Components are assembled into smartphones in manufacturing plants.
• Testing Centers: Assembled smartphones undergo quality and performance testing.
• Warehousing Centers: Finished smartphones are stored in warehouses. Up to this point, the
process is driven by forecast (Push strategy).
• Distribution Centers: Smartphones are distributed to various regions and retailers based on
actual orders and demand (Pull strategy starts here).
• Retail Stores: Smartphones are available for purchase by end customers.
• Customers: End consumers who purchase smartphones from retail stores.
The push/pull boundary, which is proposed by the group, is placed between the warehousing
and distribution centers. This boundary marks the transition from the push strategy, driven by
forecasted demand, to the pull strategy, driven by actual customer orders. The justificatiom for
the position of the boundary is given by the authors as follow:
• Forecast-Driven (Push): Up to the warehousing stage, Samsung operates based on
forecasted demand, ensuring efficient large-scale production and inventory buildup. This
strategy leverages economies of scale, reducing per-unit costs and optimizing production
schedules.
• Demand-Driven (Pull): From the distribution stage onward, Samsung responds to actual
customer orders and demand signals. This reduces the risk of overproduction and excess
inventory, allowing the company to be more agile and responsive to market changes.
By placing the push/pull boundary at the warehousing stage, Samsung can effectively manage
inventory levels, ensuring that products are available in anticipation of customer demand while
maintaining the flexibility to respond to actual sales data. This strategic placement helps balance
operational efficiency with market responsiveness, minimizing risks associated with excess
inventory or stockouts.
Case Study Chapter 6: VMI

11. Would a vendor managed inventory be favorable in your case ? Which are the advantages
amd disadvantages involved.

Vendor managed inventory (VMI) will be favorable in Samsung because the implementation of
the VMI approach can offer numerous benefits to Samsung, particularly in optimizing inventory
management, enhancing supplier relationships, and increasing the ability to meet market
demands.
The implementation of VMI offers several benefits to Samsung:
❖ Improved Inventory Management:
➢ Reduced Excess Inventory: By using VMI, Samsung can optimize inventory levels at
customer locations. Instead of customers ordering and holding excess stock, Samsung
monitors and manages inventory levels to avoid unnecessary surplus, reducing storage
costs and obsolescence.
➢ Increased Inventory Turnover: VMI accelerates the flow of goods from manufacturer
to consumer, minimizing the time inventory is held at each intermediate stage. This
improves cash flow and reduces holding costs.
❖ Enhanced Supply Chain Efficiency:
➢ Better Demand Forecasting: Samsung has direct access to customers' sales and
inventory data, allowing for more accurate demand forecasting and efficient production
planning.
➢ Minimized Stockouts: Through VMI, Samsung can automatically replenish stock when
customers' inventory levels fall below a predetermined threshold, ensuring customers
always have sufficient stock to meet demand, preventing business disruptions.
❖ Strengthened Customer Relationships:
➢ Increased Trust and Collaboration: The relationship between Samsung and its
customers becomes closer through the sharing of inventory and sales information,
creating a foundation for long-term, stable cooperation.
➢ Improved Customer Service: Ensuring that stock is always available at sales points
enhances the end-customer experience, thereby boosting Samsung's brand reputation
and image.
❖ Reduced Operational Costs:
➢ Optimized Production and Shipping Processes: Samsung can plan production and
shipping more precisely, avoiding overproduction or shortages, reducing warehousing
and transportation costs.
➢ Lower Administrative Costs: Automating the ordering and inventory management
processes minimizes manual administrative tasks, saving time and resources.
Disadvantages when Samsung implements VMI are given as follows:
❖ Risk of Inaccurate Data:
➢ Dependence on Customer Data Accuracy: If customers provide inaccurate or
untimely data, Samsung may struggle to manage appropriate inventory levels. For
instance, incorrect sales data can lead to erroneous demand forecasts, causing stockouts
or surpluses.
❖ High Initial Implementation Costs:
➢ Investment in Technology and Training: Samsung needs to invest in inventory
management systems and IT infrastructure to monitor and manage customer data.
Additionally, staff training to use the new system can be costly and time-consuming.
❖ Information Security Risks:
 ➢ Sharing Sensitive Data: Sharing inventory and sales data with customers requires
robust security measures to protect sensitive information. Without adequate protection,
data can be exposed or exploited by competitors.
❖ Complexity in Managing Partnerships:
➢ Conflict of Interests: Conflicts may arise between Samsung and its customers
regarding inventory management strategies. For example, Samsung may prefer lower
inventory levels to reduce costs, while customers may want higher levels to ensure they
never run out of stock.
➢ Mutual Dependence: The relationship in VMI creates mutual dependence. If one party
experiences issues, such as system failures or production disruptions, both parties are
affected, leading to instability in the supply chain.
In summary, implementing VMI can offer significant benefits in inventory management, supply
chain efficiency, and customer relationships for Samsung, but it also requires careful
management of risks related to data accuracy, implementation costs, and information security.

Case Study Chapter 7: Lean and agile practices

12. Where in your supply chain do you see lean and/or agile principles to be beneficiary ? Why
? Where should the CODP be ?

❖ Lean Principles
Lean principles focus on eliminating waste, improving efficiency, and optimizing processes. In
Samsung's smartphone supply chain, lean principles can be beneficial in the following stages:
➢ Component Suppliers and Assembly Plants:
• Minimizing Waste: By implementing lean manufacturing techniques, Samsung
can reduce waste in the form of excess inventory, defective parts, and inefficient
processes.
• Streamlined Production: Lean practices such as Just-In-Time (JIT) inventory
management ensure that components are available exactly when needed,
reducing storage costs and minimizing excess.
• Continuous Improvement: Lean principles encourage a culture of continuous
improvement (Kaizen), which can lead to incremental efficiency gains in the
assembly process.
➢ Testing Centers
• Efficiency: Lean principles can optimize testing procedures, reducing the time
required to verify product quality.
• Quality Assurance: By focusing on eliminating defects and improving quality
control processes, Samsung can reduce rework and ensure that only high-quality
products move forward in the supply chain.
❖ Agile Principles
Agile principles emphasize flexibility, responsiveness to change, and customer satisfaction.
These principles can be beneficial in the following stages:
➢ Warehousing Centers
• Flexibility: Agile practices allow warehouses to quickly respond to changes in
demand and adjust inventory levels accordingly.
• Responsive Replenishment: Agile warehousing can ensure that stock levels are
maintained to meet varying demand patterns, reducing the risk of stockouts or
overstock situations.
 ➢ Distribution Centers and Retailers
• Customer Responsiveness: Agile principles ensure that distribution centers and
retailers can quickly adapt to changes in customer preferences and demand.
• Speed to Market: Agile practices enable faster delivery times and more efficient
distribution, improving customer satisfaction.
❖ Customer Order Decoupling Point (CODP)
The CODP, or the push/pull boundary, is a critical point in the supply chain where the process
shifts from being forecast-driven (push) to being demand-driven (pull). In the context of
Samsung's smartphone supply chain, the optimal location for the CODP is:
Between Warehousing Centers and Distribution Centers (as defined in case study: Push/Pull
boundary). The justification for this determination that is given below includes three reasons.
Two of them has already been clarified in case study: Push/Pull boundary.
➢ Forecast-Driven (Push) up to Warehousing: Up to the warehousing stage, Samsung
can efficiently manage production and inventory based on forecasted demand. This
allows the company to leverage economies of scale, optimize manufacturing schedules,
and maintain a steady flow of components and assembled products.
➢ Demand-Driven (Pull) from Distribution Onwards: From the distribution centers
onward, the supply chain should be driven by actual customer orders and real-time
demand signals. This ensures that the products distributed to retailers and ultimately
sold to customers are based on current market conditions, reducing the risk of
overproduction and excess inventory.
➢ Balancing Efficiency and Responsiveness: Placing the CODP between warehousing
and distribution strikes a balance between the efficiency of lean principles (in
production and warehousing) and the flexibility of agile principles (in distribution and
retail). This allows Samsung to maintain an optimal level of inventory that can quickly
be adjusted to meet changing demand.
Incorporating lean principles up to the warehousing stage allows Samsung to optimize
production efficiency and minimize waste. Transitioning to agile principles from the
distribution stage onward enables responsiveness to actual customer demand. The CODP
should be placed between the warehousing and distribution centers to balance efficiency and
responsiveness, ensuring that Samsung can effectively meet market demand while maintaining
operational efficiency.

Case Study Chapter 8: Stategic partnerships

13. Would strategic partnerships with suppliers in the case of your company be beneficial ?
How strong should the integration of the partnership be ?

The table 13.1 below shows some suppliers of Samsung that the group has found. Besides the
table also gives the evaluation of integration relationships based on types of partnerships that is
clarified in table 13.2.
 Table 13.1: Evaluation of Samsung’s integration relationships
Evaluate integration
Suppliers of Samsung Beneficial
relationships
Sunny Optical (a lens To Samsung, Sunny's modules Type I (Samsung has
and camera company) provide great vertical announced Sunny Optical as a
integration, Sunny provided the supplier since 2022. The
two back camera modules for cooperation time has been
Samsung's flagship Galaxy S23 relatively short, so there is a
Ultra model need to expand and further
develop the partnership.)

KHVatec Hanoi Supplies the hinges for Type II ( KHvatec Hanoi

foldable phones Limited Liability Company
was established in 2014 and
has been a long-standing
vendor of Samsung. The
partnership between KHvatec
Hanoi and Samsung has been
established for a significant
period of time, showcasing a
long-term commitment
between South Korea and the
Vietnamese government. )
Simmtech Produces semiconductor Type I (Simmtech was recently
substrates announced as a supplier on
Samsung's list since 2022. As a
new addition to Samsung's
network of suppliers, it will
indeed require time to build
relationships and develop
further with Samsung.
Jahwa Vina Supplies the phone's optical Type III (Established in 2007,
image stabilization (OIS) Jahwa Vina Co., Ltd. is a
actuators. subsidiary of Jahwa
Electronics. It has been
engaged in a long-standing
collaboration with Samsung in
the production and supply of
camera electronic components
for their mobile phone models.
The partnership has witnessed
a strong commitment from
both South Korea and the
Vietnamese government.
Qualcomm Long-term cooperation and Type III (Qualcomm is a long-
supply Snapdragon chips for term partner of Samsung,
Samsung phones having provided chips to the
company since its first phone
versions
 Source: Compiled by authors
Table 13.2: Types of partnership
Type I Type II Type III
Coordinated ativities and Activities are integrated Significant level of
planning intergration
Involves one division or Operates across multiple Each organisation views the
function divisions and functions other as an extension of
itself
Short-term focus Long-term horizon Long-term horizion with no
end date
Source: Lambert et al., 1996
Strategic partnerships with suppliers can benefit Samsung Electronics in:
• Reliable Supply Chain: By forming strategic partnerships, Samsung can establish long-
term relationships with suppliers, ensuring a stable and uninterrupted supply of raw
materials, components, or services. This helps prevent disruptions in production and
minimizes the risk of supply chain bottlenecks.
• Cost Reduction: Collaborating closely with suppliers can lead to cost reductions through
various means such as bulk purchasing, joint procurement initiatives, or sharing of resources
and expertise. This can result in lower production costs, improved economies of scale, and
increased efficiency throughout the supply chain.
• Improved Product Quality: Supplier partnerships enable Samsung to work closely with
suppliers to maintain and enhance product quality standards. By aligning goals, sharing
knowledge, and implementing quality control measures, Samsung can ensure that its
products meet or exceed customer expectations.
• Innovation and Technology Advancement: Strategic partnerships with suppliers can foster
innovation and technology advancement. By collaborating with suppliers, Samsung can tap
into their expertise, access new technologies, and jointly develop innovative products or
solutions. This collaborative approach can help Samsung stay at the forefront of
technological advancements and maintain a competitive edge in the market.
• Risk Mitigation: Partnerships with suppliers can help mitigate risks associated with supply
chain disruptions, market fluctuations, or changes in regulations. By diversifying its supplier
base and working closely with key partners, Samsung can better anticipate and respond to
potential risks, ensuring business continuity.

Case Study Chapter 9: Key supplier rating

14. Identify three key suppliers for your company and select appropriate criteria, with which
you would rate their performance.

Due to the data that the group has found, three key suppliers of Samsung are clarified in the
table 14.1 below included the information about what product that each supplier supplies.
Table 14.1: Three key suppliers of Samsung
Supplier Product Supplied
Qualcom Mobile Processors (SoCs), Modems
Sony Camera Sensors
Samsung Electro-Mechanics Electronic Component (Capacitors, inductors,resistors,
integrated circuits), Printed Circuit Boards (PCBs), Camera
Modules
 Source: Compiled by authors
In practice, there are many sources of rating of these three key suppliers in terms of five
common criterias which are quality, delivery performance, cost, innovation and sustainability.
The table 14.2 below shows the ratings of each supplier for each criteria, the sources of the
assessment are also given.
Table 14.2: Performance ratings
Delivery
Quality Cost Innovation Sustainability
Supplier Performance Mean Sources
(1-5) (1-5) (1-5) (1-5)
(1-5)
AnandTech,
TechRadar,
Gartner, IDC,
IHS Markit,
Qualcomm 5 4 4 5 4 4.4 CNET, The
Verge,
Qualcomm’s
sustainability
reports
DXOMARK,
Supply Chain
Digital, IC
Insights, CES
Sony 4 4 3 4 4 3.8 Innovation
Awards,
Sony’s
sustainability
reports
Samsung’s
annual
reports, EE
Samsung
Times, IHS
Electro- 5 5 4 4 5 4.6 Markit,
Mechanics
Samsung’s
sustainability
reports
Source: Compiled by authors
Based on the performance ratings, Samsung Electro-Mechanics stands out as the highest-rated
supplier due to its consistent quality, excellent delivery performance, competitive cost, ongoing
innovation, and strong sustainability practices. Qualcomm also scores high, especially in
quality and innovation, making it a crucial supplier for high-performance processors. Sony,
while strong in innovation and sustainability, has slightly lower ratings in cost and delivery
performance, but remains a valuable supplier due to its expertise in camera sensors.

Case Study Chapter 10: Supply chain team

15. Think about the perfect supply chain team for your company. What kind of people should
they be and which skills should they have ?

To build the perfect supply chain team for Samsung, we need individuals who possess a blend
of technical expertise, strategic thinking, and strong collaboration skills. Here's a breakdown of
the types of people and skills required:
❖ Technical Experts:
➢ Supply Chain Analysts: Individuals with a deep understanding of supply chain
management principles, including demand forecasting, inventory management, and
 logistics optimization. They should be proficient in using supply chain software and
analytics tools.
➢ Procurement Specialists: Experts in sourcing raw materials and components globally,
negotiating contracts, and managing supplier relationships to ensure a stable supply of
high-quality materials at competitive prices.
➢ Logistics Managers: Skilled in managing transportation, warehousing, and distribution
operations efficiently to minimize costs and lead times while maximizing service levels.
❖ Leadership and Strategic Thinkers:
➢ Supply Chain Managers: Leaders who can develop and execute supply chain strategies
aligned with Samsung's business objectives. They should have a comprehensive view
of the supply chain, identifying areas for improvement and implementing initiatives to
drive efficiency and innovation.
➢ Strategic Planners: Individuals who can anticipate future market trends, technological
advancements, and geopolitical factors that may impact Samsung's supply chain. They
should develop contingency plans to mitigate risks and capitalize on opportunities.
❖ Collaborative Team Players:
➢ Cross-functional Collaborators: Effective communicators who can collaborate with
colleagues from other departments such as sales, marketing, and finance to align supply
chain activities with overall business goals.
➢ Relationship Builders: Skilled in building strong partnerships with suppliers, carriers,
and other external stakeholders to foster collaboration and drive mutual success.
➢ Problem Solvers: Resourceful individuals who can quickly identify and resolve issues
that arise in the supply chain, whether it's a production delay, quality issue, or
transportation disruption.
❖ Adaptability and Continuous Learners:
➢ Technology Enthusiasts: Given the increasing role of technology in supply chain
management, team members should be comfortable leveraging emerging technologies
such as blockchain, IoT, and AI to enhance visibility, traceability, and efficiency.
➢ Continuous Learners: With the supply chain landscape evolving rapidly, team
members should have a growth mindset and a willingness to learn new skills and stay
updated on industry trends and best practices.
By assembling a diverse team with these qualities and skills, Samsung can build a resilient and
agile supply chain capable of supporting its business growth and delivering value to customers
worldwide.