I.

Samsung's supply chain woes highlight the unpredictability of

disruptions from the coronavirus
Vietnamese authorities shut down a unit within a Samsung Display factory after a worker tested positive
for the coronavirus, according to Reuters. As a precautionary response, 44 additional workers from the
unit were quarantined, and the factory and buses for worker transportation were disinfected.

In recent years, Samsung has shifted much of its manufacturing to India and Vietnam — whereas it had
once relied heavily on China — in a bid to reduce manufacturing costs and the burden of tariffs. This
strategy appeared to work in Samsung's favor when the impacts of the coronavirus were primarily felt in
China, but the global spread of the pandemic has now seen both India and Vietnam institute lockdowns.

The unit shutdown in Samsung's Vietnam factory highlights the unpredictable nature of coronavirus
impacts. Early in the pandemic, much of the analysis about how companies would fare was based on the
location of their factories. For instance, Samsung was believed to be better positioned than Apple
because its supply chain was less concentrated in China.

But this analysis doesn't hold up now that all major manufacturing countries have been impacted by the
coronavirus, and operations can grind to a halt due to something as unpredictable as a single worker
contracting the virus: Even in South Korea — one of the nations that's been the most successful at
curbing its spread — Samsung had to briefly halt factory operations after coronavirus cases were
detected. Many factories have instituted precautionary measures such as temperature checks, but these
are by no means a guarantee of a coronavirus-free workforce.

The New Normal: Companies will have a heightened awareness of supply chain risks in the wake of
the pandemic, which increases the probability of overreaction in terms of overhauling supply chain
operations. The magnitude of the current supply chain disruption increases pressure to institute
changes: 62% of respondents who are executive decision-makers at companies within the connectivity,
technology, and software sectors believed their companies would experience supply chain issues in the
next six months, according to Business Insider Intelligence's Coronavirus Business Impact Survey from
March 2020.

Companies will turn to intentional redundancy in supply chains to limit downtime for
future crises, but the benefits won't always outweigh the long-term costs — here's
why:
 Adding intentional redundancy creates a status quo of operational inefficiency, whereas the
extent to which such measures bolster operations in a time of crisis is unpredictable.

 Maintaining output levels throughout a global economic crisis could be unnecessary, given
reduced demand associated with them.

 Investing in contingency measures for supply chain operations can be just as effective in
mitigating risk as making dramatic changes to an operational footprint — if not more so.

II. Supplier evaluation

Supplier selection is a crucial phase to achieve sustainable supply chain. Often, these decisions are based
on multiple selection criteria. Håkansson & Wootz (1975) classified these criteria into supplier
characteristics and bid characteristics. Supplier characteristics like reputation and size are the major
factors, which influence the supplier selection decision. On the other hand, bid factors like price and
quality offered by supplier also affect the supplier selection decision. Organisations should select the
supplier selection method including the environmental and sustainable factors. Implementing the
principles of green procurement at the early stage of supplier selection can significantly help to minimise
environmental impacts in supply chains.

III. Strengthen competitiveness by innovation.

 First, Samsung does not have an investment strategy that prioritizes the development of a
number of supporting industries for countries to generate large-scale output. In the 1990s, for
example, Malaysia focused on investment in the development of electricity and electronics
(E&E) for domestic production and to create a key export force in the world market. After 10
years, the export of electricity - electronics accounts for over 50% of the total export turnover of
the country.
 Second, the supporting industry development policy of Samsung has not created the linkage
between FDI enterprises and enterprises of other countries, especially small and medium
enterprises. Therefore, a leading corporation like Samsung has produced in large quantities but
still does not have a system of supporting industrial factories in small countries. According to the
Japan Trade Promotion Organization's survey data, the number of domestically produced
components and raw materials for industrial products of China and Thailand accounts for 50-
60%, and that of Vietnam accounts for only 27,8% industrial output value. Therefore, the value
added of Vietnamese goods ranges from 15 to 30%, including items with a large export turnover
such as garments and footwear.
 Third, some countries in the Samsung supply chain has not yet established models for vertical
linkages - the price chain product value from input suppliers - who produce the end product
-product distributor and horizontally - between the same manufacturers product category with
the assignment and cooperation to create competitiveness in domestic and international
market.