Logistics lean integration strategies: case study of Samsung Electronics LCD inbound logistics

Abstract

The electronics industry is a key industry in South Korea. This is the case, despite the fact that it is difficult for the country to maintain a continuously dominant position in the global market. This difficulty is directly related to the shortening of product life cycles and price fluctuation. To improve efficiency and maintain a competitive edge in fast-paced technological age it is critical to synchronize production supply with market demand. This paper focuses on the strategies which make the “just in time” production system within the electronic supply chain. The presented case study of Samsung Electronics Thin Film Transistor-Liquid Crystal Display (TFT-LCD) Inbound Logistics provides a solid example of process integration in the areas of: packaging, transportation and information sharing. The problems faced by Samsung Electronics in the early 2000’s were a direct result of an imbalance between increased traffic/demand and existing production capacity. The most detrimental of these problems caused delays in supply, shortage of space in the hub center and the bottlenecking of supply transportation. This paper will demonstrate how Samsung Electronics reexamined and systematically streamlined their existing processes and how they later successfully integrated “lean thinking” strategies to all areas of TFT-LCD production. As a result of the integration of these strategies, Samsung Electronics turned away from their conventional method of packaging and unpacking items individually and began using a line-to-line packing system which focused on packing items in a group using a standardized, returnable packing system. Additionally, they opted to replace their paper invoice system for an improved transportation system through which a computerized data could reflect flows of information and materials in real time. As this paper will clearly demonstrate, the integration of these strategies gave Samsung Electronics a new approach to TFT-LCD Inbound Logistics which allowed them to overcome their previous dilemmas and resulted in successful outcomes, decreased lead times, a more consistent guarantee of high quality products and an reduction in total costs.