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    SCM of

    Samsung Electronics

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    Table of Contents

    1. Introduction

    2. Background

    3. SCM Case4. APS

    5. SCM Timeline

    6. Result of SCM

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    1. Introduction SCM - Definition

    Suppliers CustomersPurchasing Production Distribution

    Supply chain management (SCM) the management of a network of interconnected businesses involved in theultimate provision of product and service packages required by end customers

    Supply Chain

    planningCollaborate

    planning

    Supply Chain

    Execution

    Supply Chain Management

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    1. Introduction SCM - Strategies

    Supply Chain Planning

    Collaborative Planning

    Supply Chain Execution

    3 strategiesof

    SCM

    To provide stable suppliesfor any circumstance of market

    Planning immediate

    Information share withcustomers and suppliers

    To manage timelinefor Supply Chain System

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    1. Introduction Elements of SCM

    Organization: Global Operation Center

    Planning, Operating, regulating, and Monitoring

    Process: Forecast-based, daily production planning

    System: APS (Advanced Planning & scheduling System)

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    2. Background Current Status

    The world's largest electronics company

    Global market leader in more than 60 products

    Business areas: Consumer electronics

    Telecommunication

    Semiconductor As of 2007

    Revenue $103.4 billion

    Net income $21.5 billion

    Employees Over 138,000

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    2. Background Business process perspective

    Quick reactions in rapidly changing markets Rapid market growth, price drops, new paradigms, etc.

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    Demands ForecastLow reliability of forecasts

    Lack of management tools on forecast

    Delivery Due DateLow reliability of delivery due date

    Need for setting priorities for demands

    PlanningDecentralized planning processes

    Lack of unified standard information

    Inventory Controllittle control over worldwide inventory

    Lack of tools for strategic planning

    Late delivery Surplus inventory

    2. Background Business process perspective

    Demand for centralized supply control sharing of quick, exact, and useful information about

    current status & future forecast

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    2. Background Business process perspective

    Strengthening global competitiveness 60~70% of extra values come from supply chain

    Competitors (Intel, GE, Sony, HP, Toshiba, ) began

    implementing SCM systems

    To gain competitive advantage, it was important toenhance supply chain and the way of managing it

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    2. Background Information Systems perspective

    Difficulties in integrating decentralized local informationsystems Decided to develop a stand-alone SCM tool that centralizes and

    streamlines supply chain management

    Preparation for future e-business system Implementing SCM as a step toward future e-business

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    3. SCM Case Samsung Electronics

    Samsung Electronics Plans for introducing SCM

    PLAN1.

    Rapid planning for fast reaction to market changes

    PLAN2.

    Predicting demands with information integration

    PLAN3.

    Real-Time delivery to customers

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    3. SCM Case PLAN 1

    Rapid planning for fast reaction to market changes

    Integrates all planning steps Provides real-time business information &

    Accurate plans and decisions are made for each order Right plans are made quickly

    Salesperson

    SalesDepartment

    StrategyMarketing

    Merchandise/Manufacture

    ManufactureManagement

    Purchase

    Forecasting/Order

    Control/Management

    Selling Plan

    Allocation Plan

    Manufacture Plan

    Purchase Plan

    In1 day,Set-up

    AllPlans

    Week Cycle

    Purchase Plan

    Manufacture Plan

    Allocation Plan

    Selling Plan

    Control/Management

    Salesperson

    SalesDepartment

    StrategyMarketing

    Merchandise/Manufacture

    ManufactureManagement

    Purchase

    MonthCycle

    Forecasting / Order

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    3. SCM Case PLAN 2

    Predicting demands with information integration

    Integrated management on information for forecasting demands Simultaneous management on information Eliminates all inefficiencies originated from inaccurate forecasts

    CommandCenterCustomer

    Salesman StrategyMarketing

    LocalMarketing

    BullwhipEffect

    Customer

    Command

    Center

    Salesman LocalMarketing

    Strategy

    Marketing

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    3. SCM Case PLAN 3

    Real-Time delivery to customers

    Allocation of resources in advance, based on current situationOn time delivery through reliable information sources

    Lack

    Delivery bythe local

    stock

    Customer

    On-

    Hand

    If there are no stockand we dont know

    when can we buy, wewill buy from other

    company!!

    Headquarter

    Manager Salesman Customer

    Delivery bythe supply

    plan

    On-

    Hand

    In-

    TRANSIT

    Stock Manufacture

    plan

    Material

    plan

    Allocation

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    4. APS Global Production Planning

    Samsung Electronics introduced

    Global Production Planning,

    as a specific solution that enables SCM

    Global Production Planning is a similar conceptto APS

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    4. APS Effects of implementing APS

    Simultaneous planning

    Reduction in time for planning

    Shortened planning cycle: Weekly, dailyplanning

    Enables making accurate production plans

    Enhancements on on-time delivery

    Enables quick responses

    Enhanced Customer service

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    5.SCM Timeline From 1997 To 2007

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    5.SCM Timeline In 2009

    Global SCM

    TOP 8The AMR Research Supply Chain Top 25 for 2009

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    sales(TrillionWon)

    97

    18.5

    03

    43.6

    56

    33

    inventoryturnover

    ratio(day)

    inventory..bond

    (Trillion Won)5.2 3.8

    Improvements on process management- Shortened process management cycle: monthly -> weekly -> daily- Simultaneous planning/execution of worldwide manufacturing/sales

    plans as a single system- Reduction of lead time for planning: previously 3 weeks, reduced to less

    than 1 week

    6.Result of SCM Improvements on process management

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    6.Result of SCM Articles