How Samsung Is Driving Sustainability Across Its Supply Chain

How Samsung Is Driving Sustainability Across Its Supply Chain

August 23rd 2019

“Giant Tech Firms face several challenges to stay on top. With the rise of new technologies and policies, new problems arise as well. Alongside employing the best hands to remedy such issues, Samsung is seeking to drive more Sustainability Across Its Supply Chain.”

Samsung has since the Q1 of 2018, unswervingly ranked as the biggest smartphone manufacturer globally. Over the past years, Samsung’s pricing plan and overall quality level have seen it become a forerunner in the smartphone industry. But competition from Apple provides a good battle for the leading Korean tech giant on a periodical basis. The smartphone battle sees both giant swapping the top position regularly, sometimes at more full margins. A sharp increase in consumer interest sees Apple’s shares rise rapidly in the global marketplace. But Samsung’s consistent performance and the undeniable influence of Huawei’s impressive rise, has witnessed significant growth at the top. While Apple deliberates on a likely diminishing return following its persistence on quality-based growth.

Samsung’s revenue stream is not only limited to the smartphone market. A reasonable size of its income comes from serving the global market with quality laptops, smartwatches, televisions, white goods, and more. These revenue streams all use a reliable and effectively handled supply chain to face the progressively conscious consumer. The now aware consumer market poses a fresh challenge for any leading brand in search of maintaining its position, ethics, and sustainability.

On August 20, a blog post published by Samsung highlights various issues facing the industry. It also details the methodology it employs in its Supply Chain Management practices. Additionally, the blog provides an insight into how Samsung make sure its products are available through the right means and at the right place and time. An overall corporate strategy herein comprises of business sustainability, environmental, and ethical factors. These factors make the umbrella under, which increases vital organizational accomplishments.

With 216 global bases spread around 74 nations alongside 2,389 first-tier small suppliers, Samsung’s scope of the supply chain is unquestionably vast. Supplier selection makes the first decision port for Samsung’s plan. This selection is key to Samsung’s success, and base focuses on the supplier competitivity and mentality. Samsung appropriately assesses potential suppliers on a wide variety of factors, including:

Eco-Partner status

Environment

Health and safety (EHS), and

Labor and human rights.

The preliminary screening follows an on-site valuation, confirmation of human rights practices, validation of regulatory compliance, and assessment of the competition concerning suppliers’ operational regions. With proper permission from suppliers, Samsung publishes its Supplier list to guarantee transparency.

The publication of its Supplier list is symbolic of the thoroughness Samsung employs in selecting its strategic partners. The tech giants have no plans to seek association with any Partner or Supplier engaging in morally dubious behaviors. The list publication of such associations highlights the confidence Samsung place on its suppliers.

Once in place, Samsung regularly engages its suppliers with multiple operational level training. These training boost their enrollment abilities, flex corporate and industrial might to attract the best talent from partners as well as improve retention. Samsung’s Suppliers also benefit from its influence on business innovation, leadership, procurement across the globe, and sales. From a sustainability view, its first-, second-, and third-tier suppliers individually receive EHS consultation, product stabilization, and worksite assessment. These added features help guarantee best practices are employed from top production down to its final customer.

This synergetic relationship is beneficial to all and eventually, the end-users. Samsung’s supply chain is full of reliably sourced quality products; with its suppliers constantly enhancing both environmental sustainability and operations. End users can relish quality products from Samsung, with the knowledge that these products receive the highest degree of ethical and sustainable technological inputs.

Samsung closes the blog post with some instances pointing to its Corporate Social Responsibility (CSR) endeavors performed in its native Korea. From early 2015, Samsung started its Smart Factory Construction program, which makes available its expertise and understanding of Smart Manufacturing to other firms across Korea. This move further nurtures the Samsung drive in the establishment of efficient smart factories. Between 2015 and 2017, A total of 1,086 Small and Medium-Sized Enterprises (SMEs) joined in the program, and Samsung credits them a 54% and 58% growth in quality and productivity respectively. An additional 2,500 Korean SMEs projected for 2018 to 2022 are already on Samsung’s radar for support. It also comes with a view of better facilitating the sustainable Industry 4.0 expansion widely expected across Korea.

In Malaysia, properly managed workplaces have been another focus for Samsung, especially to benefitting migrating workers. Several migrating workers function at various levels for its first-tier suppliers in Malaysia. For 2019, Samsung partners with the International Organization for Migration for its Fair Labor Practice Training Session and Ethical Recruitment in Malaysia. These programs drew 80 managers from Samsung’s Malaysian supply chain to etch the critical values of due diligence, ethical recruitment, and ways to remedy unethical performances.

Finally, Samsung endorse its new Responsible Sourcing of Minerals policy. This policy seeks to make sure that sourced minerals from its various supply chain get purchased from supportable origins. A part of the policy also bans any source from illegal mining activities in conflicting regions around Africa. In the Democratic Republic of Congo (DRC), Samsung also launches its “Cobalt for Development” program that seeks to elevate the living standards and labor conditions at cobalt mines across the nation.