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e-Business Supply Chains of Samsung Company1

E-BUSINESS SUPPLY CHAINS OF SAMSUNG COMPANY Student's Name

Professor's Name Course Code and Number University Location ' Assignment

e-Business Supply Chains of Samsung Company2 Contents Executive Summary.........................................................................................................................2 Introduction......................................................................................................................................3 Samsung Smartphone Supply Chain...............................................................................................5 Upstream Process and Technology..................................................................................................9 Down Stream.................................................................................................................................11 Recommendations..........................................................................................................................12 References......................................................................................................................................14

e-Business Supply Chains of Samsung Company3

e-Business Supply Chains of Samsung Company4 Executive Summary The supply chain is an essential element for a company and organization. Effective management of the supply chain can improve the profitability of the company. The report focuses on Samsung Electronics mobile phones because Samsung Electronics' essential profit comes from smartphone sales. This article aims to explore and evaluate Samsung Electronics' upstream and downstream practices, from which the research explains Samsung Electronics' supply chain management and e-commerce technology. Besides, based on available public information, the report demonstrates the technologies of Samsung Electronics' supply chain upstream and downstream processes and how they will further enhance Samsung Electronics' supply chain management. Subsequently, this research paper provides the relevant supply chain diagram to clearly show the Samsung Electronics supply chain partners, including suppliers, transportation, distribution, and consumers. Finally, this report discusses Samsung Electronics' upstream process and downstream process. Also, it provides relevant recommendations to improve the efficiency of Samsung Electronics.

e-Business Supply Chains of Samsung Company5 Introduction Samsung Electronics was launched in 1969 as a segment of the Samsung Group. Samsung Electronics began as a television manufacturer (Jung, & Chung, 2016). However, in the late 20th century, the company started manufacturing hard drives and memory for laptops. The company has recently grown to become a world leader in the information technology, which has been segmented into three core divisions: Device solution, I.T., mobile communication, and consumer electronics. Every one of these divisions is tasked with its production plant and assembly plant. However, the three units, the Samsung I.T. and Mobile communication have become a significant unit in the company because it has been the biggest revenue generator in the entire Samsung Electronics (Jung, & Chung, 2016). This has been contributed mainly by its smartphones, which have held top positions in the world communication market, making the company have a significant share or become a leading shareholder. From the introduction of its first android smartphone in the beginning of this decade, the company fiscal sales and operating profit has skyrocketed significantly. As a result, the smartphone product from the company have entered into the fifth generation and heading to seventh generation, which has made its smartphone product to be considered as the world market leader. As a result, this has enabled the company to record increased shares from 2010 to the present moment (Jung, & Chung, 2016). Samsung is the leading smartphone vendor worldwide. In 2019, Samsung's market share of the global smartphone market was at around 22 percent, with Apple as its closest competitor in the market (IDC, 2020). In 2019 alone, the South Korean company sold more than 290 million smartphones worldwide (IDC, 2020). Through the smartphone product, the company has achieved a sizeable share in the graph communication marketplace with the android enabled Samsung Galaxy competing with Huawei and Apple's iPhon (IDC, 2020)e. For instance, in the

e-Business Supply Chains of Samsung Company6 first quarter of 2019, Samsung took the second position on the number of global smartphone shipments of the top 5 smartphone producers worldwide and first position in the first quarter of 2020 (IDC, 2020). Despite a decline of 18.9% year to year decrease in the worldwide shipments in the Q1 of 2020, the company has regained the top spot in the global smartphone market place (IDC, 2020). It came after the company temporarily overwhelmed the position to Apple in the fourth quarter of 2019 (IDC, 2020). According to a survey conducted by IDC in 2020, the decline in the market share of the worldwide shipment that the company made in 2020, from 71.9 million shipments in 1st Q to 58.3 million shipments in 1Q in 2020, was temporarily contributed by the recent global health pandemic, Covid-19 epidemic (IDC, 2020).

e-Business Supply Chains of Samsung Company7 The company made a shipment of 58.3 million smartphones during the first quarter of 2020, which helped the company regain its leading crown with 21.1 percent of the global marketplace share irrespective of a decline of 18.9 percent year-over-year (IDC, 2020). This was primarily contributed by the constant success of the A-series smartphone. It was albeit the launch of its premium Galaxy S20, the company's 5G smartphone flagship (IDC, 2020). Nevertheless, the launch of the Samsung Galaxy S20 has enabled the company to grow its profit. From this backdrop, it is clear that the company has been making huge profits from the manufacturing of top-notch smartphone products, which has helped maintain a top position in the global smartphone market. Samsung Smartphone Supply Chain Since it participated in the smartphone market, the company has established a speedy creativity and innovation ecosystem. It has promoted this through close collaboration with more than a thousand primary suppliers across Europe, North America, China, and South Korea. This has enabled the company to establish a strategic supplier's collaboration/partnership. Samsung's Strategic Supply Partnership has helped the organization to launch a distinctive and flexible Samsung Production System (SPS) (Son et al., 2015). It has been a system for creating and generating different models to satisfy the customer's worldwide demand in the quickest possible way. The SPS has been a peculiar production scheme made by bringing together the elements of flexibility and economies of scale. These have been founded on the partnership and internal innovation between the company and its suppliers. The company's procurement section is attributed by the model of just-in-time delivery, which has been keeping inventory at minimum, attained through close collaboration and sharing of relevant data with the suppliers through the company's online portal. From this perspective,

e-Business Supply Chains of Samsung Company8 the company has come up with joint complexes with both the other electronic associates and suppliers to raise the effectiveness and reduce delivery costs (Son et al., 2015). The company has also established a purchasing information program linked to the company's supply chain management. As a result, this has enabled the company to give the suppliers forecasts on the products, especially forecasting relating to the product's quantities and descriptions (Son et al., 2015). The company's supply chain management ensures that the production schedules are three months in advance, which has helped in making sure there is timely delivery of materials. It has also helped the company in minimizing essential for sections of inventory. The features of the Samsung Production System can be segmented into high quality, flexibility, and speed. First, the company has attempted to enhance the improvement speed of lunching smartphone products continuously (Son et al., 2015). For the reasons of achieving such advancement, the company has transformed its method of production. This is founded on the product's platform to minimize the company's inventory, the manufacturing lead time, and the line lead time (Son et al., 2015). Moreover, to achieve the requirements of the customers' shortrun delivery, the company has earned a worldwide base for supply. It has also achieved this by performing production operational enhancement by using Global Supply Chain Management. Second, the company has implemented the element of flexibility to satisfy the international smartphone market's diverse requirements (Son et al., 2015). The company has implemented flexible manufacturing systems that combine modular and cellular production program for every produced product. The modular production system has made it possible for experienced and skilled workers to employ the most straightforward integrated system for survive the fierce marketplace competition (Son et al., 2015).

e-Business Supply Chains of Samsung Company9

Moreover, the company has placed more focus on the innovative abilities of the suppliers. From passing down its innovative approaches, underpinning the entry into a foreign market, and introducing I.T. resources, the company has implemented innovative suppliers' creative abilities through funding, plant improvement, technological advancement, and human resource growth. This phase's core emphasis has been to help the company enjoy a constant competitive edge in the worldwide marketplace instead of immediate short-term performances. Last, from 2008 to 2013, the company supply chain approach has become more enhanced, the supplier partnership strategy (Son et al., 2015). The company has termed this stage as the leap to global first-class status. Through leaping from the international first-class position, the company has explained its philosophical management, which is the advancement of procurement, just management, and

e-Business Supply Chains of Samsung Company10 social trust management. The elaboration of this philosophy has been geared toward the international establishment of trust, transparency, and competency founded on the organizational culture. The achievement of joint growth in the abroad marketplace with the collaborating firms has helped the company formalize supplier collaboration strategy and systematically implement it. Moreover, the company has acknowledged its corporate procurement plan team for the partner partnership department, further developed into a partner collaboration center. In 2013, the company established and used its business statement to reinforce suppliers' abilities and its global position as a competent company. The company has continued developing and managing a system for fair trade that reflects the fluctuating prices of raw material and expertise escrow (Frederick & Lee, 2019). The company has put dedication into creating confidential correlation for underpinning mutual collaboration with suppliers. The company started Shared Growth Day at the beginning of the 2011 toward building and developing a relationship with partners. During this day, the company's senior management pays a visit to suppliers regularly to listen to their challenges and concerns (Frederick & Lee, 2019). As a result, the company opens itself to the supplier's communication channel through a cyber-petition system and conferencing system. The supplier partnership strategy has enabled the company to straighten its competitive edge in production. As a result, the company has achieved flexibility and effectiveness through discovering and creating innovative suppliers and their creative concepts. Currently, the company has an enormous supply chain comprising of 2500 suppliers across the world. Some of the suppliers give the company components, and others give equipment. The company, the suppliers, to take part in Green Management, in which it has to

e-Business Supply Chains of Samsung Company11 offer them economic and technical support and provide them with consultancy services. This has ensured that the suppliers are actively transiting to Green Management as the world is going toward sustainable supply chain management. After the suppliers across China and South Korea, some products are transported to China and South Korea for production and assembly; the country's selection has been necessitated by the low cost of labor and is strategic for distribution across the world marketm(Frederick & Lee, 2019). The company also has a more market share in these countries, which has helped the company minimize the cost of luring clients. For instance, in South Korea and China, the company gives the assembled product from the two main manufacturing countries (South Korea and China) to the global marketplace through international logistic companies' application. These international logistic companies are shown in the above figure (Son et al., 2015). The company employed an indirect and direct sales approach for the fast sell of Samsung Galaxy Phones. Upstream Process and Technology As can be seen from the definition, the supply chain covers a sequence of financial chains from upstream materials to manufacturing and sales terminals. Upstream includes raw material and suppliers. In this report, the upstream process is the procurement of materials for Samsung Electronics to produce Samsung smartphones (Frederick & Lee, 2019). For example, components such as the processing unit and camera are vital resources for Samsung smartphones. The upstream process may comprise suppliers who buy these materials to satisfy the order. In this section, this paper emphasizes Samsung smartphones' suppliers and their parts in the Upstream process and how to make and purchase materials. Also, this report will discuss the

e-Business Supply Chains of Samsung Company12 technologies used by Samsung Electronics in upstream and relevant impacts. Suppliers are significant to Samsung Electronics because the supplier provides Samsung Electronics with raw materials to produce smartphones. Samsung Electronics smartphone hardware suppliers: more than 2500 supplying company (Frederick & Lee, 2019). Besides, Samsung Electronics has a powerful bargaining influence because Samsung Electronics provides enormous orders for suppliers. For instance, India has Samsung's major mobile factory and central mobile phone production unit globally as per the manufacturing capacity. The company proclaimed in 2017 that it invested $620 million to duple smartphone manufacturing in India. It inaugurated the factory in Noida, Uttar Pradesh, India, in 2018. This factory's production capacity was at the time of 120 million units per year, meaning a significant number of suppliers were required to supply essential components. Samsung Electronics has more than 2500 suppliers that provide the company with necessary raw materials and equipment, in which it entered within them into Strategic Supply Partnership (Frederick & Lee, 2019). The second main reason is that Samsung Electronics' Samsung Production's system determines that Samsung smartphones have a high reliance on suppliers. According to the official information, the production style of Samsung smartphones is similar to laptop manufacturing (Chow, 2018). The technique is perfect for customizing production volumes as desired. Considering this strategy from Samsung smartphones, this method carries apparent benefits, but it may also bring some future risks to Samsung smartphones. Firstly, Samsung smartphones use this technique to rapidly give suppliers orders and complete them over their production units in India, China, Vietnam, and South Korea. For the upstream process, the Samsung smartphone strategy has a reasonably competitive gain. This

e-Business Supply Chains of Samsung Company13 method recovers the whole operational efficiency of Samsung smartphones. Thus, Samsung smartphones successfully finished inventory. Down Stream The downstream supply chain denotes the management of information and product flows between retailers and customers. It differs from upstream supply chain management, which encompasses harmonizing procurement accomplishments with dealers (Chow, 2018). The primary practice in downstream is inventory controlling and delivery. From this perspective of the paper, an explanation is offered on Samsung Electronics' smartphone on the marketplace and how the company distributes it to customers; also, providing relevant downstream technology to explain its impact on the downstream process. Samsung Electronics' downstream route put inventory management is an important part. Samsung Electronics' collaboration center and warehouse are two units. Samsung Electronics smartphones and connected products are put in the high-value position, such as the camera and the phone case, placed in another area (Frederick & Lee, 2019). Samsung Electronics assists in the timely delivery of products through product inventory management. Unlike traditional manufacturing that requires large warehouse storage and shipping products, Samsung Electronics' storage costs are close to zero. The most significant improvement of Samsung Electronics is the "high allowance rate" of inventory. Based on Samsung Electronics in 2020, smartphone shipments were 53.8 million units. It was nearly 75 percent sold through ebusiness. In terms of distribution, Samsung Electronics’ approach to making smartphones is different from traditional manufacturers. In the Indian, South Korean market, outdated producers'

e-Business Supply Chains of Samsung Company14 sales channels mainly come from national representatives to county-level representatives. This process has to go through at least three distribution stages before consumers can receive the phone they bought (Chow, 2018). Finally, the initial distribution of the final sales data is returned to the handset manufacturer. For this model, the entire process takes too much time. It usually takes two months to complete this step. Therefore, manufacturers' feedback on the supply chain will be "delayed." However, Samsung Electronics improves distribution efficiency by shortening the downstream supply chain. Although Samsung Electronics manages the downstream process, it reduces inventory costs and improves distribution efficiency. Samsung Electronics does not save too much value in logistics; it is mainly outsourced and downstream technology (Rahmanzadeh, Pishvaee, & Rasouli, 2020). This research paper proposes RFID. This method eliminates the need to develop technology; the Internet of Thing concept has been submitted. Based on Internet of Things applications, autonomous road transportation can transport products more efficiently and extend transit times (Chow, 2018). In this regard, the application of this technology can help Samsung Electronics deliver its pro. For example, Samsung smartphones take 3-4 days to distribute a smartphone to a consumer through reliable Logistics. However, the application of autonomous road transportation may take only one to two days to complete the delivery process (Frederick & Lee, 2019). Elevates the efficiency of Samsung Electronics operation and reduces delivery time. Recommendations From this section's perspective, the research paper offers vital recommendations from Samsung Electronics’ upstream process and downstream process.

e-Business Supply Chains of Samsung Company15 Firstly, for the upstream process, the application of blockchain technology can help Samsung Electronics solve some procurement challenges, such as involved record-keeping and tracking of mobile phone materials (Chow, 2018). Blockchains can provide transparent data. Therefore, the supply chain members can know some of the other members' information through the data provided. This approach provides the foundation for the trust o...