Logistics is handled in a unique way in Samsung so that it covers many administrative processes. Core building blocks for components plus combined internally and externally sourced components are shipped to the assembly factories, either from Korea or directly to the overseas plant by Samsung Electronics Logitech which handles both inbound and outbound logistics and goes further in handling payments and processes with outsourced companies working seamlessly with the global ERP system maintained by Samsung SDS.
Samsung's Export/Import logistics process Diagram
TASK Referring to the above diagrams and the 'Samsung Warehousing' link: 1. Identify the distribution channel Samsung uses 2. Identify the transportation modes Samsung uses 3. Analyse the benefits and disadvantages warehousing can have using Samsung's transformation as guidance. 4. Explain how Samsungs unique Logistic system can give them a competitive advantage over their competitors
Activity 2 - Global sourcing and outsourcing (25 minutes)
Assembly points are either in Gumi Korea, in various facilities in China or Vietnam. As mobile phones have a relatively high labour intensive content, Samsung will continue to develop its Vietnamese factory capacity and output as Chinese labour costs rise. India may even be the next biggest hit.
TASK: After reading the above links, document and diagram: 1. list the countries that Samsung outsources R&D and Production to 2. 'Samsung manufactures a lot of its own components'. Discuss how this can help (or not help) the company and its strategic competitive advantage over competitors?
Activity 4 - Product Design and Development and R&D (25 minutes)
Clipping from Samsung Electronic's 2014 Annual Report
Apple buys components form Samsung. This proves how important product design and development is. Using the resources above: 1. List how Samsung prioritises R&D. 2. Explain why R&D is important in giving a company competitive advantage especially regarding technology. 3. Examine how this has can give Samsung a competitive advantage over competitor.