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The supply chain is a critical success factor for Samsung, and, for Maurits Matthijsse, Logistics Director, Samsung Europe, the level of trust and personal relationship with his logistics service provider is key to this success.
“In terms of what we look for in a supply chain partner, it starts with the people – that is the most important ingredient – quality people, who really understand our business and our thinking, and who are clearly familiar with the logistics arena as well as our market,” says Maurits.
Samsung produces a wide range of consumer electronics and white goods, which means that its supply chain needs also vary widely. Mobile phones, for instance, is a business segment where lead time is critical to not losing market share, so airfreight and express are the essential modes of transport. For white goods, on the other hand, margin is more important, so these tend to go by ocean freight and road freight.
“The more efficient we are in our supply chain, the better our margins,” explains Maurits.
Streamlined processes
Because the length of the supply chain has a strong influence on both lead times and margins, Samsung is shifting production closer to the final market, thereby eliminating the inbound ocean freight part of the supply chain. In Europe, the company already has factories in Hungary, Slovakia and Romania, and is now opening up a plant for white goods in Poland as well.
In other moves to increase supply chain efficiency, Samsung is reducing the number of warehouses in Central Europe, and consolidating volumes into a single DHL warehouse in Slovakia. In addition, Samsung is also pursuing customer requirement rationalization, in which they shift combined delivery orders together on factory pallets, for instance, to avoid repalletizing, while achieving higher load efficiency in their trucks.
In terms of what sets his company apart from its competitors, Maurits explains that Samsung is extremely flexible and fast in its decision-making. This is because it is a young company, with streamlined internal processes, reflecting the Korean management style. “We are willing to do things by trial and error, so, we’ll take a decision quickly and, if it doesn’t work, then we’ll make adjustments and try again.”
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