English editing
Slide 1
Samsung SDI is a Korea-based company engaged in the manufacture of digital display devices. Since its founding in 1970, Samsung SDI has been on the path of constant creative innovation and challenge. Their innovative products and technology go deep into our lives in general, aiming for an environment where people and the environment can communicate in the digital age. They are opening up a new future for energy and displays at the forefront of technological innovation and development of digital devices. They are focusing on the development of environment-friendly energy based on the rechargeable battery business, which becomes now the core of digital mobile devices. They are also the first in Korea to introduce sustainable management.
Slide 2
The brief explanation of the company background is as follows.
Samsung SDI was Founded as Samsung NEC in 1970
In 1989, they succeeded in developing a super-large sized color CRT
In 1999, they changed their name to Samsung SDI
In 2001, they made the first production of plastic touch panels in Korea
In 2002, they grew into No. 1 share in the world market for LCDs for mobile phones
In 2005, they had World's first 4th generation AMOLED mass production investment
In 2006, they developed world’s thinnest Dual-Slim AMOLED
Slide 3 (Scope of Services)
The Company operates in two business segments: display segment and energy segment. In display segment they mainly produce 3 things used for TVs and monitors.
PDP. Plasma display panel. Samsung SDI succeeded in developing 42˝, 50˝, and 80-inch of PDPs. and since then, it has also succeeded in developing the world's largest 102-inch FullHD-class PDP. They achieved 25% global market share by 2010, and they are aiming for keeping their reputation of the world's number one PDP company.
LCD. Liquid crystal display. Samsung SDI is specialized in Mobile Display, AMOLED and Production of Display Total Solution. As the No. 1 mobile display company, they keep strengthening product competitiveness through continuous development of products and technologies.
VFD. Vacuum fluorescent display. Samsung SDI is the world's second largest company and the only domestic producer for VFD. They currently occupy 40% of the world market share. Especially in 2002, the first VFD joint venture plant and full-scale mass production in VFD industry were completed in Shanghai in China.
In energy segment, Samsung SDI contributes to global initiatives to reduce carbon emission and to enhance fuel efficiency by developing and supplying secondary batteries. Their Energy Storage System is based on the world leading lithium–ion cell technology currently used in cutting-edge IT devices and vehicles. Their batteries adhere to the same strict quality assurance standards demanded by global automotive companies and large-scale utilities.
Also, they are developing fuel cells which are the next-generation energy source through alliances with domestic and overseas companies. They entered the automobile and power generation markets with small fuel cells development. .
Slide 4 (SWOT)
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-First, they have a strong brand identity due to Samsung
-They have achieved great success in various product fields such as CRT and LCD. From that experience, they have acquired know-how.
-Well-built SC system. Samsung SDI automated all processes having the company's internal optimization tool, ERP. On top of it, they added an SCM solution (APS: Advanced Planning System) to optimize the entire supply chain. This has increased work efficiency and speed. It took a month before adding the solution for demand forecasting, sales planning, resource allocation planning, production planning, purchasing planning, etc. But, afterwards, it has now been reduced by about a week. By changing the demand forecast cycle on a weekly basis from month to month, they are responding to various kind of changes in the market so quickly.
<W>
-They entered late in the market of medium-sized secondary batteries which are used in automobile production.
-Plus, they have Insufficient investment in production equipment of the batteries.
LG Chem has about 2.6 billion dollars for the investment fund and CATL has slightly less than about 2.6 billion dollars. On the other hand, Samsung SDI has about 600 million dollars.
-Poor profit structure. Their profit structure focused on the reduction of costs. This requires the sacrifices of suppliers. Through the reduction of costs, their profit gets higher in short term. But it eventually leads to the rise of costs because sacrifice of suppliers worsens their profit structures.
<O>
-China is Rapidly growing with the industry of information and communication.
-Due to short product life cycle, the incidence of new demand is high and replacement demand is actively created.
-R & D investment scale is large.
LG Chem-1 trillion won (4% of sales)
CATL-550 billion (7% of sales)
Samsung SDI-800 billion (sales) 8%
R & D investment of Samsung SDI takes 8% of total sale while LG Chem takes 4% and CATL takes 7%. Since secondary batteries are in an industry in which the superiority of technological capabilities is extremely important, large scale of investment in technological development is positively evaluated in relation to the future market share.
<T>
-Competition will be more intense than it is now. LG Chem and CATL is growing rapidly and other European companies are also entering the battery market. They will have to keep looking how Samsung SDI will serve services in the growing competition with companies such as Balta in Germany, British Bolt in England.
-Low demand in domestic market. The usage of 2ndary batteries is still low in Korea. 2ndary batteries industry just recently got spotlighted in Korea.
Proposal Slide
As I explained above, Samsung SDI has seen many positive effects from the application of their new supply chain system. However, their SCM is not in the final stage but still in progress. I have several proposals for improvement of their supply chain.
1. Improved real time information system
Samsung SDI's Supply Chain has a lot of difficulties in determining the status of all suppliers, their strengths and weaknesses, and directions to lead them because of the large number of suppliers. it is no longer only a matter of the competition between companies and companies, but also between Supply chain and Supply chain which integrates the company and its business partners, the management of business partners is one of the most important factors that determine the win or loss in the competition. Therefore, it is necessary to expand information systems that are updated in real time and accurate for their suppliers.
2. WIN-WIN strategy with suppliers
After grasping the strengths of Samsung SDI and the strengths of the suppliers based on the accurate and supplier information, it wins the competition by combining only the strengths of the two companies, thereby benefiting both sides. However, this is not just about winning the competition. After the competition, the distribution of the outcomes must be made to a certain degree so that the cooperative relationship can be continued after that. However, in the relationship with their suppliers, Samsung SDI so far have regarded the partner companies as a simple subcontractor rather than a partner. They have only considered the suppliers as a means to reduce the cost as much as possible. Therefore, the minds of trust and partnership with partner companies could not be shared. To this end, Samsung SDI has implemented many institutional plans, but the corporate culture must support this rather than the institutional one. Introduction of a formal system Of course, it is important, but it is important to build and spread the culture within Samsung SDI for perceiving that the partner companies are another family. After this culture being rooted, institutional plans can also be implemented effectively.
3. Appropriate purchasing manpower training
Due to its industrial characteristics, SCM for production and supplier is more important than SCM for production and Customer. Since most of the materials of Samsung SDI are purchased, the right manpower for purchasing is absolutely important. No matter how good a SC system exists, it is useless if the person using it does not use it properly. In particular, purchasing ability is important in the purchasing manpower sector, but the ethics of buyers is becoming very prominent. Companies hire employees with competency-basis, but the moral part of the buyer is also important even if it is a factor that cannot be ignored that competency is important. Samsung SDI need to hire people who fit the mission pursued by them and their corporate culture as well as are with the right values. And even after that, they must continue to strengthen not only purchasing ability but also purchasing morality through continuous education, evaluation, and reward programs.