Effective Supply Chain Strategies for Delivering Customer Value

This report delves into the core concepts of supply chain management (SCM) and its pivotal role in delivering customer value, using Samsung Electronics as a case study. It explores the fundamental components of SCM, including planning, sourcing, manufacturing, delivery, and returns, highlighting their impact on the company's success. The report defines customer value, emphasizing the significance of quality, service, and cost in achieving customer satisfaction, and discusses how SCM strategies influence these elements. Furthermore, it outlines various SCM strategies adopted by Samsung, such as customer feedback mechanisms, the implementation of Six Sigma methodology, and the utilization of APS systems, to improve efficiency, reduce costs, and enhance customer satisfaction. Finally, it explores demand-driven planning, emerging technologies, and sustainability, demonstrating the multifaceted approach required for effective supply chain management in a competitive market. The assignment is contributed by a student to be published on Desklib, a platform providing AI-based study tools.

Supply chain
management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Supply chain management..........................................................................................................1
Customer value............................................................................................................................2
Supply chain strategies................................................................................................................3
CONCLUSION................................................................................................................................6
References:.......................................................................................................................................7

INTRODUCTION
Supply chain management consist of all stages of process which include in converting
raw material into finished goods. It also include flow of goods and services(Nunes, Causer and
Ciolkosz, 2020). It describe that how goods and services is supplied to end customers by a
company. On the other hand Logistics refers to making sure that correct products must arrived on
right time and on right place in organisation. There are three main elements in logistics and they
are transportation, storage and distribution of products. Samsung electronics is an South Korean
multinational electronics company which was founded by Lee Byung-chul in the year 1969. Its
headquartered is located in Suwon-si, South Korea. The following project cover meaning of
supply chain management and their application in company, meaning of customer value and
determining customer value for Samsung electronics and determining some supply chain
strategies for the mentioned company.
MAIN BODY
Supply chain management
SCM is the management of flow of goods and services and it also include all those
activities which takes place in converting raw material into finished goods(Mosteanu and et. al.,
2020). It is a very wide concept, it cover everything from production to distribution of finished
goods, from planning to controlling, from observing to communicating. The main work of supply
chain manager is to minimize the shortage to resources in organisation is to keep cost down as
much as possible. In context of Samsung Electronics, supply chain management plays an
important role in their success and this statement is proved below with the help of 5 components
of SCM-
Planning- Every activity in the organisation need planning. Planning is the framework of future
activities that how, what, when and by whom the task is done in future. In Samsung electronics,
their planning is concern with product design, the time to launch new product, who are targeted
customers for their new product, what should be done to reduce cost, how inventories must be
stored to fulfil future needs of customers and many others. This type of planning help to show
the direction to representative companies.
Sourcing- This component includes the selection of suppliers, monitoring them and manage
supplier relationships (Xu and et. al., 2020). In context of Samsung electronics, they have good
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and loyal suppliers who did not switch to other companies easily and this thing happens because
they made good relationship with their suppliers by providing appropriate amount for their raw
materials.
Manufacturing- After receiving raw material, converting those raw materials into finished goods
is compulsory for further functioning in companies. In Samsung electronics, they manufacture
their products with good technological advancement and with skilled workers. Supply chain
manager supervise the manufacturing area that their workers are doing their work properly or
not, they also recognise that raw materials are used properly or not and in which section of
manufacturing area more material is required.
Delivery and logistics- After manufacturing, the products must deliver to final customers or kept
in warehouses for future delivering(Jia, Gong and Brown, 2019). In context of Samsung
electronics, their products are sold quickly because they produce their electronic items with the
use of modern technology and add some extra features which is considered beneficial for them to
take competitive advantage.
Returning- In case of any defective product, customers return the product to sales man or at the
store from where they purchase the product. And that salesman and retailing store owners send
the product to manufacturing department of company. This stage helps the company to find out
what all changes they required to do in their product.
Enabling- supply chain requires a support processes to regulate all functioning in an
organisation. This factor include Human resource, IT, product design and many others.
Importance of supply chain management-
 Supply chain management helps in identifying the problems in the process of
manufacturing products.
 SCM helps in reducing cost.
 SCM manages inventory of business.
 SCM saves time by reducing unproductive activities of employees in an organisation.
Customer value
Customer value- Customer value means how much the customer is satisfied with the products
and services that are being offered by the company(Tönnissen and Teuteberg, 2020). Consumers
are satisfied on the basis of three factors which are- quality,price and services.
Importance of customer value-
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 Retention of customers-Retaining consumers is very important for the companies as it
helps in increasing more profits. Samsung have always given highest priority to their
customers by interacting with them and performing technical and taking charge of quality
collaborations
 Customer advocacy- When the companies gives satisfaction to their customers by their
products and services ,consumers automatically recommends the company name to some
other person .Samsung have created its brand image in the market because of which the
customers always recommends their products to other people.
Elements of customer value-
 Quality- Quality means all the non price attributes which means satisfying the customers
needs and wants (Meherishi, Narayana and Ranjani, 2019). Samsung have always build
its quality by offering them different products according to the needs of different
consumers providing quality in their services.
 Service- Service which is intangible in nature where no physical goods are shifted to
another person. In relation with the company , they always offer variety of services to
their customers and the company will be working on further improvement in their
services by changing working hours where consumers are more likely to come.
 Cost- Cost means the monetary value which companies charges on their products(Behl
and Dutta, 2019). Samsung have always kept the prices reasonable and affordable
according to market requirements and the products in which the company is charging
higher prices ,in that they are offering products with more technological advancements
and modifications.
 Time- Time means how much time company takes to deliver their products to end
consumers. The company have always delivered the products timely in the market and it
also keeps their customers well informed regarding the delivery of their products.
Supply chain management impacting customer values-
In today's dynamic environment ,customer value impacts the most as they want the
products efficient and cost effective. The supply chain management impacts the
transportation,designing and activity of one person will impact the benefits of other person in the
chain. Samsung always focusses on cost effectiveness and operational efficiency with the help of
supply chain management and maintaining focus on feasibility .Samsung aims to work on
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environmental,social and economic criteria of supply chain. The company is building its supply
chain which will benefit the customers.
Supply chain strategies
Supply chain management is helpful in making recommendations to improve and develop
productivity, quality and efficiency of operations (Sarkar, Omair and Kim, 2020). Supply chain
strategies are made for companies benefit in performing better operations within the organisation
and compete in market with proper efficiency. SCM strategies are made to reduce cost, time and
wastage of raw material in production cycle. Samsung electronics has properly made their supply
chain strategies to provide their products and services to attain customers. Samsung electronics
adopt 7 supply chain transformations and these are explained below-
1. Listen to voice of customers- customer is considered as the king of market because the
value of any company is recognized only by customer behaviour toward the company. In
context of Samsung Electronics, they tries to identify their customers behaviour in
particular countries where they operate by sending their staff members to attend MBA
programs at local universities and colleges. These staff members gather customer
perception, their needs and wants which is essential in product designing and making
changes in existing product to fulfil customer needs.
2. Adopt six sigma methodology- quality and affordability are main elements in electronic
industry (Bastas and Liyanage, 2019). Samsung electronics study six sigma approaches
and create a methodology with the help of GE approach which consist of defining,
measuring, analysing, enabling and verifying.
3. Utilization of APS system- Advanced panning and scheduling system computer
supported planning that handle various functions of supply chain management which
includes procurement, production, distribution and many others. In simple words, this is
the system which consist of use of IT in supporting SCM in quantitative way. Electronic
markets changes at an rapid speed. Hence, Samsung adopt APS system in their
functioning which helps in making flexible production plan.
4. Setup cross functional team- to make effectiveness in internal functioning of
departments, Samsung use the system called “voice of Business”(Wong and et. al., 2020).
In this method they collect internal requirements of every department and encourage
them to communicate with each other for official informations.
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5. Streamline performance evaluation system- Samsung is the company of having high
skilled employees but they are lacking behind in suggesting a good growth strategy for
their business to grow well. They opt merit-based system which allow high performer to
perform best and have good career path.
6. Standardize processes and parts- Major parts of Samsung electronics are manufactured
in Korea which is its home country which further helps to achieve economy of scale. This
strategy helps in producing more qualitative products due to more control in own country
of Samsung.
7. Establish risk management system- every business has risk factors and every business
make strategies to overcome with all risks related to their businesses(Garrido-Hidalgo
and et. al., 2019). Samsung electronic implement risk management system.
There are many benefits of having a supply chain strategy and few of them are explained below-
 To support business goals.
 To evaluate historical data.
 To know the position of inventories.
 To analyse customer demand and adopt the changes.
 To adapt change in internal management and product design according to requirement.
There are many supply chain strategies which is opted by many companies including Samsung
electronics and some of the best supply chain strategies are explained below-
Demand-driven planning and adoption of suitable business operating model based on
actual time demand insights- Prediction of market demand with latest technology is best
strategy for many businesses. In context of Samsung, they allow feedbacks and complains of
customers through internet. They also send their staff members to different universities and
colleges to predict the customer behaviour and their needs in market place. Using artificial
intelligence technologies in predicting demand is one of the best way. Samsung electronics have
their own website and has social media accounts on which customers who is more active on
social media can provide what all changes they need in their products. According to recent
demand of customers in market they modify their business operating model to accept the
changes.
Adopt emerging technologies to ensure a reliable and predictable supply- It is important
to see which department require what type of resources in an organisation(Zijm and et. al.,
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2019). Supply chain manager is responsible to supervise all the work related to their department.
In context of Samsung Electronics, they subdivided their departments work and assign a
supervisor for each department who report to supply chain manager. It is recommended to use
advanced technology like drones to observe the working of staff which reduces the burden of
manager.
Embed sustainability into supply chain operations- it is compulsory to maintain
sustainability in any business. In context of Samsung electronics, their supply chain teams can
develop long team targets by focusing appropriate usage of required material with no wastage
raw material, electricity, employees productivity and etc. Another way to make sustainable
business is to optimize transport routes to reduce fuel consumption which further help in
reducing expenses of business and use saved amount of money to productive activities. Samsung
can move toward share data model which states that business must be very transparent for
effective work.
Providing more facilities to suppliers- suppliers are the individuals who provide raw
material to company(Rebs, Brandenburg and Seuring, 2019). To attain supplier loyalty, Samsung
provide affordable prices to their suppliers for their raw material which help regularity of supply
in business and it further helps in completion on production on time. This will enhance customer
value because regularity in supply is the one thing which operates every operation on time. It is
recommended to Samsung to provide those facilities to their suppliers which is different from
their competitors like providing coupons and cards for their suppliers which help them to buy
any Samsung product on high discounts. This strategy will help the Samsung to attain more
suppliers options which is beneficial in case of matching productivity of company with increase
in demand of customers.
Taking use of product line- Product line is the method of launching a series of products
on timely basis. In context to Samsung, they launch Samsung galaxy S series, Samsung galaxy
note series and many others in their mobile products. This strategies help to attain the customer
values. Launching product line is the way to attract more customers because every product which
is recently launched in the series has new and updated features as compared to previous product
in the same series.
Organise events to enhance communication- organising some events which increase the
confidence level of employees and workers so that they feel free to communicate and free flow
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and effectiveness of communication is one of the element of supply chain management(Badi and
Murtagh, 2019). In context of Samsung, they organise induction programs and some gaming
activities which help to enhance communication in company which further help in operate
business activities more effectively and it help helps to enhance culture of company. This will
enhance customer value and help to manage supply chain as more employees engage in
communication more need and requirements of production will be recognized.
CONCLUSION
From the above information, it has been concluded that supply chain management is an wide
concept which is important for business to cover all activities which is held from converting raw
material into finished goods. There are 5 components of supply chain management and they are
Planning, Sourcing, Manufacturing, Delivery & logistics and Returning. Customer value is the
satisfaction level of customer which measures that customers are satisfies or not and it also
determine those factors which affect customer's satisfaction and dissatisfaction. It is compulsory
to attain customer value for companies to reach the success and to grow internationally. Quality,
service, cost and time are the basic elements of customer value. Supply chain strategies are made
to enhance communication, determining demand and many others in organisation.
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References:
Books and Journals
Nunes, L.J.R., Causer, T.P. and Ciolkosz, D., 2020. Biomass for energy: A review on supply
chain management models. Renewable and Sustainable Energy Reviews. 120. p.109658.
Mosteanu, N.R. and et. al., 2020. Sustainability Integration in Supply Chain Management
through Systematic Literature Review. Calitatea. 21(176). pp.117-123.
Xu, S. and et. al., 2020. Disruption risks in supply chain management: a literature review based
on bibliometric analysis. International Journal of Production Research. 58(11).
pp.3508-3526.
Jia, F., Gong, Y. and Brown, S., 2019. Multi-tier sustainable supply chain management: The role
of supply chain leadership. International Journal of Production Economics. 217. pp.44-
63.
Tönnissen, S. and Teuteberg, F., 2020. Analysing the impact of blockchain-technology for
operations and supply chain management: An explanatory model drawn from multiple
case studies. International Journal of Information Management. 52. p.101953.
Meherishi, L., Narayana, S.A. and Ranjani, K.S., 2019. Sustainable packaging for supply chain
management in the circular economy: A review. Journal of cleaner production. 237.
p.117582.
Behl, A. and Dutta, P., 2019. Humanitarian supply chain management: a thematic literature
review and future directions of research. Annals of Operations Research. 283(1).
pp.1001-1044.
Sarkar, B., Omair, M. and Kim, N., 2020. A cooperative advertising collaboration policy in
supply chain management under uncertain conditions. Applied Soft Computing. 88.
p.105948.
Bastas, A. and Liyanage, K., 2019. Integrated quality and supply chain management business
diagnostics for organizational sustainability improvement. Sustainable Production and
Consumption. 17. pp.11-30.
Wong, L.W. and et. al., 2020. Unearthing the determinants of Blockchain adoption in supply
chain management. International Journal of Production Research. 58(7). pp.2100-
2123.
Garrido-Hidalgo, C. and et. al., 2019. An end-to-end internet of things solution for reverse supply
chain management in industry 4.0. Computers in Industry. 112. p.103127.
Zijm, H. and et. al., 2019. Operations, logistics and supply chain management: definitions and
objectives. In Operations, Logistics and Supply Chain Management (pp. 27-42).
Springer, Cham.
Rebs, T., Brandenburg, M. and Seuring, S., 2019. System dynamics modeling for sustainable
supply chain management: A literature review and systems thinking approach. Journal
of cleaner production. 208. pp.1265-1280.
Badi, S. and Murtagh, N., 2019. Green supply chain management in construction: A systematic
literature review and future research agenda. Journal of cleaner production. 223.
pp.312-322.
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