DEGREE: MSc Information

Technology Management
Module: IT Operations, Supply and Logistics

Practical Skills Assessment

Supplier Evaluation Analysis

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 Table of Contents
I. Introduction........................................................................................................................................3
2. Quality management principles and their impact on operational excellence....................................3
3. Factors for Supplier Evaluation..........................................................................................................5
A. Price..............................................................................................................................................5
1. Importance of competitive pricing.............................................................................................5
2. Strategies for cost reduction......................................................................................................5
3. Cost analysis tools and methods................................................................................................5
B. Quality...........................................................................................................................................6
1. Standards of Samsung’s of product quality................................................................................6
2. Metrics for evaluating product quality.......................................................................................6
3. Importance of quality assurance and control.............................................................................7
C. Delivery Time.................................................................................................................................7
1. Significance of on-time deliveries..............................................................................................7
2. Tools and techniques for monitoring delivery times..................................................................8
3. Strategies for improving delivery time.......................................................................................8
D. Environmental Responsibility........................................................................................................8
1. Importance of sustainability in supplier relationships...............................................................8
2. Evaluation of supplier's environmental practices.......................................................................9
3. Environmental impact assessment tools....................................................................................9
E. Social Responsibility.......................................................................................................................9
1. Ethical considerations in supplier selection...............................................................................9
4. Supplier Evaluation Process.............................................................................................................10
A. Data Collection............................................................................................................................10
1. Gathering supplier data...........................................................................................................10
2. Data sources (e.g., surveys, audits, reports)............................................................................10
5. Implementation of Best Practices....................................................................................................10
6. Competitive Advantage through Supplier Evaluation......................................................................11
7. Conclusion.......................................................................................................................................11
8. References.......................................................................................................................................12

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I. Introduction
Samsung Electronics Co., Ltd. is a South Korean transnational firm that operates worldwide. It began
in 1938 as a trade corporation but has since expanded into one of the largest enterprises in the
world. Consumer electronics, semiconductors, telecoms, and more are among Samsung's core
businesses. The Galaxy range of smartphones, televisions, and home appliances have made it a
household name. In addition, Samsung is a powerhouse in the semiconductor business, where it
manufactures the memory chips and processors that power a wide range of consumer electronics
(Tsai et al., 2023). The firm has become an industry leader because to its dedication to new ideas and
cutting-edge technology. The goal of this paper is to provide readers an in-depth look at how
important supplier assessment is for attaining business-wide operational excellence. This report aims
to demonstrate, by examining factors such as price, quality, delivery time, and environmental and
social responsibility, how effective supplier evaluation aligns with Samsung's key learning outcomes
for supply chain management, logistics, quality management, and competitive advantage. It provides
guidance on how to pick and manage suppliers effectively, which may improve a company's supply
chain performance and competitiveness (Shala, Prebreza and Ramosaj, 2021).

2. Quality management principles and their impact on operational

excellence
Managing quality means making sure your goods and services are up to par with your customers'
needs. The values and beliefs of a company's quality management team are the compass by which it
navigates the challenges it faces on the path to fulfilling its quality mission (Hai, n.d). The eight
quality management principles outlined in ISO 9001:2015 are applicable to businesses of any size, in
any sector. These tenets are as follows:

Customer focus: To succeed, businesses must focus on their consumers' wants and requirements,
both now and in the future (Hidiroglu, 2021).

Leadership: Leaders need to set the tone for the organisation, ensuring that everyone knows what
they're working towards and how they can contribute to achieving the quality goals.

Involvement of people: The qualitative performance of an organisation depends on the competence,

empowerment, and recognition of its people at all levels (Arisanto and Yuliana, 2023).

Process approach: In order to maximise productivity and efficiency, businesses should manage their
operations as a system of interdependent processes.

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System approach to management: If businesses want to reach their long-term objectives and
become more efficient as a whole, they need to integrate and coordinate their processes and
systems (Shamout and Elayan, 2020).

Continuous improvement: The best way for businesses to boost customer happiness and
productivity is via constant process, product, service, and system monitoring, measurement, analysis,
and improvement.

Factual approach to decision making: Organisations should make choices based on accurate,
trustworthy, and relevant facts and information analysed using logical and reasonable processes.

Mutually beneficial supplier relationships: Businesses should work to build and maintain positive
relationships with their vendors and other business associates based on trust, appreciation, and
contribution to shared goals (Bai and Satir, 2022).

The semiconductor, display, mobile device, consumer electronic, network system, digital appliance,
memory solution, and other product lines make Samsung one of the most well-rounded
technological corporations in the world (Sun, Zhang and Ni, 2022). Samsung has been using an ISO
9001-based quality management system since 1993, and in that time has made significant strides
towards perfection in all areas of quality control, including “policies, objectives, processes, audits,
documentation, certification, product development, qualification, supplier management, etc”
(Strohmer et al., 2020).

“We offer on the basis of an efficient quality system, the best goods and services which correspond
to our client needs and expectations.” This is Samsung's quality policy statement. The quality goals
set by Samsung are quantifiable and in line with the company's quality standards. Some examples
include process-level KPIs and collaborative efforts to improve product quality with clients and
vendors (Strohmer et al., 2020).

Concept, plan, development, and production are the four stages that make up Samsung's product
development and qualification stage. “Design review”, “failure mode and effect analysis (FMEA)”,
“Design of Experiments” (DOE), “Reliability Test Plan (RTP)”, “Statistical Process Control (SPC)”, etc.
are only some of the tool’s procedures Samsung use at each stage to guarantee quality (Liu et al.,
2022).

In addition, Samsung employs a CIP that employs a closed loop methodology to select critical
parameters, evaluate the measurement system, monitor critical parameters, enhance process
capability, and react to any deviations from the target (Choi et al., 2022).

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Using international norms like “ISO 9001 (for general quality management)”, “IATF 16949 (for the
automotive industry)”, “TL 9000 (for the telecommunications industry)”, etc., Samsung has certified
its domestic and international facilities to meet those standards (Ngo et al., n.d). Samsung has
achieved operational excellence in areas like innovation, productivity, efficiency, customer happiness,
and market leadership by adopting and implementing these quality management concepts
throughout all of its business activities.

3. Factors for Supplier Evaluation

A. Price
1. Importance of competitive pricing
Samsung recognises that maintaining a competitive price point is essential to preserving its position
as a market leader and profitable business in the global smartphone sector (Kim and Do Chung,
2022). Samsung can attract and keep consumers that care about performance, innovation, and
design by providing those qualities in goods at fair pricing. Samsung can compete successfully with
companies like Apple, Huawei, and Xiaomi because of the company's competitive price, despite the
fact that each of these companies has its own pricing strategy and customer base. Samsung's pricing
strategy takes into account demand, market dynamics, manufacturing costs, and competitive moves.

2. Strategies for cost reduction

When it comes to electronics, semiconductors, and home appliances, Samsung is unrivalled on a
worldwide scale. Samsung has a holistic differentiation strategy that prioritises product innovation
and quality to preserve its competitive edge (Qi et al, 2023). However, Samsung also employs ways to
save costs in order to boost profits and productivity. Some of Samsung's cost-cutting measures
include:

Value Engineering (VE): Samsung continually assesses the cost of its smartphone components and
manufacturing in order to save costs where it can or swap cheaper components without sacrificing
quality or functionality.

Skimming strategy: When Samsung introduces a new product to the market, it often sets the price
high in order to reap the benefits of the product's early users.

Outsourcing and offshoring: For cost savings and tax advantages, Samsung contracts with third-party
suppliers and offshore sites to handle parts of its non-core tasks including assembly, packaging, and
shipping.

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3. Cost analysis tools and methods
How does Samsung use cost analysis?
The term “cost analysis” refers to the procedure of determining the net profit from a given
circumstance or project by deducting all the costs from the total. The South Korean multinational
electronics corporation (Arisanto and Yuliana, 2023). Samsung employs cost analysis in service of
their broad differentiation strategy, which seeks to deliver distinctive goods for a vast consumer base.
Samsung also used cost research to establish their skimming pricing strategy, which entails charging
exorbitant rates for its newest items before the competition introduces equivalents to the market. To
evaluate costs, Samsung employs a number of methodologies and programmes, including:

Whale charts: They are visual depictions of the many factors that go into determining the final price
of an item or service. Using whale charts, Samsung is able to trace the origins and destinations of its
expenditures.

Cost-benefit analysis: This method involves analysing the financial and non-financial implications of a
project or decision. Samsung uses cost-benefit analysis to foresee project profits and evaluate them
against expected returns (Shamout and Elayan, 2020).

Product development: Making something new or better that will appeal to and satisfy buyers is what
this refers to. Research, design, testing, and marketing are all essential parts of the product creation
process. Samsung is able to set itself apart from rivals and provide value for its consumers because to
its dedication to product development.

B. Quality
1. Standards of Samsung’s of product quality
The term “product quality” refers to how well a product satisfies its intended audience. When it
comes to product quality, Samsung is all about providing customers with cutting-edge solutions that
improve their daily lives. The Galaxy smartphone line provides state-of-the-art features and
performance, the QLED TV line provides stunning picture quality and smart functions, and the
EcoBubble washing machine reduces water and energy consumption without sacrificing cleaning
effectiveness. Continuous innovation, extensive testing, and compliance with global rules are just a
few ways Samsung ensures the quality of its products (Sun, Zhang and Ni, 2022).

2. Metrics for evaluating product quality

Smartphones, televisions, computers, refrigerators, and more are just some of the many consumer
goods that Samsung manufactures, making it a world leader in the industry. Samsung employs a
wide range of indicators, including product performance, dependability, durability, and customer
satisfaction, to guarantee the quality of its goods. Samsung utilises a variety of measurements,
including:

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Defect rate: The rate at which goods fail to meet expectations in terms of how well they perform
their intended purpose (Strohmer et al., 2020).

Mean time between failures (MTBF): How long a product lasts before it has a failure under typical
use.

Customer satisfaction score (CSAT): The mean assessment buyers make of a product according to
their own expectations and desires.

Net promoter score (NPS): The difference between the proportion of satisfied customers who would
suggest a product and the percentage of unhappy customers who wouldn't.

Return rate: The share of sales that are cancelled by unhappy consumers, defective goods, or
exchanges (Hai, n.d).

Samsung uses these measures to track product quality, identify any problems, and ultimately fix
them. The company uses these metrics to:

 Increase customer satisfaction and repeat business by providing items that reliably meet their
requirements.
 Decrease expenses and boost earnings by reducing the number of product failures, returns, and
warranty claims.
 Gain an edge over the competition and increase sales by producing better items than the
competition (Qi et al, 2023).
 Create cutting-edge, market-driven innovations in response to consumer needs and preferences.

3. Importance of quality assurance and control

Quality control and assurance are crucial for Samsung to maintain its position as an industry leader in
the production of consumer electronics. During the quality assurance process, Samsung and the
client work together to guarantee that the final product is up to snuff. Before releasing a product for
sale or distribution, quality assurance examines it for flaws and mistakes (Sun, Zhang and Ni, 2022).
Samsung may get a competitive advantage in the worldwide market by instituting quality assurance
and control measures that will save costs, boost customer happiness, and raise retention rates.

C. Delivery Time
1. Significance of on-time deliveries
Delivery on time is critical to Samsung's performance in the highly competitive consumer electronics
industry. On-time product deliveries guarantee happy customers, save down on storage fees, and
boost profits. Samsung's ability to consistently meet deadlines is one of the reasons the company has

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been so successful (Arisanto and Yuliana, 2023). Maintaining a competitive advantage and achieving
corporate objectives are both made possible by Samsung's commitment to on-time delivery.

2. Tools and techniques for monitoring delivery times

Samsung keeps tabs on shipping and delivery timeframes using a number of methods. Among them
are:

ISO 9001 and IATF 16949 quality management system certifications guarantee stringent quality
checks and happy clients.

Reducing waste and increasing output via better process control is the goal of a continuous
improvement programme.

The evaluation and auditing of suppliers in terms of technology, quality, delivery, cost, and finances
forms the basis of supplier quality management, which in turn drives improvement initiatives.

Management based on results, or “performance management,” encompasses a wide range of

disciplines and aims to improve efficiency and productivity in the workplace (Shala, Prebreza and
Ramosaj, 2021).

3. Strategies for improving delivery time

Even though it is one of the world's largest smartphone producers, Samsung has had trouble keeping
up with consumer demand for its devices. Samsung can reduce shipping times by using some of
these measures.

 Reducing wait times and expenses by improving its supply chain management
 Putting investment into regional factories and warehouses to serve niche markets.
 Improve client satisfaction and comments by using digital channels and tools.
 Having dependable partners and suppliers to guarantee quality and productivity.
 Putting in place swift and adaptable procedures to accommodate fluctuating client needs (Tsai et
al., 2023).

D. Environmental Responsibility
1. Importance of sustainability in supplier relationships
Samsung Electronics is committed to fostering an equitable, transparent, and mutually beneficial
business environment with its vendors. To this end, Samsung exclusively contracts with “Eco-Partner
certified suppliers” that meet all applicable international norms for labour conditions, product
quality, and environmental protection (Arisanto and Yuliana, 2023). Samsung also encourages its
suppliers to advance in terms of workplace safety, technical prowess, and environmental friendliness.

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Samsung's mission is to serve its consumers, its business partners, and society at large by managing a
supply chain that is both environmentally responsible and profitable.

2. Evaluation of supplier's environmental practices

Suppliers must share Samsung's commitment to environmental responsibility if the company intends
to continue using them. “Energy efficiency, greenhouse gas emissions, waste management, water
conservation, and compliance with environmental standards” are just some of the areas that
Samsung considers when assessing the environmental practises of its suppliers. To assist its suppliers,
enhance their environmental performance and lessen their effect on the environment, Samsung
offers advice and resources (Shamout and Elayan, 2020).

3. Environmental impact assessment tools

An environmental impact assessment (EIA) is a method for gauging the scale and nature of a
project's potential influence on the natural and human environments. To prevent or lessen the
severity of any negative effects, EIA may assist determine which environmental practises and
technology are most appropriate for a certain project. As a pioneer in electronics and technology,
Samsung incorporates EIA into its CSR and environmental initiatives. Manufacturing plants, research
facilities, and renewable energy facilities are all examples of the kind of large-scale projects for which
Samsung does EIA. When it comes to environmental impact assessment, Samsung adheres to
international norms and standards including ISO 14001 and the Equator Principles (Bai and Satir,
2022).

To further promote openness and accountability throughout the EIA process, Samsung actively
involves stakeholders and local communities. On its website, Samsung provides a summary of its EIA
reports, which include the project's description, baseline environmental conditions, environmental
consequences and mitigation methods, alternatives analysis, monitoring and evaluation plan, and
the results of public engagement.

E. Social Responsibility
1. Ethical considerations in supplier selection
Samsung is committed to doing business in a moral and accountable way. It achieves this in a few
ways, one of which is through working with vendors that share its ethics and principles. Samsung
considers several factors when assessing its vendors, including quality, pricing, delivery, innovation,
and environmental impact. Sustainability is an important criterion since it represents Samsung's
ethical concerns while choosing suppliers (Sun, Zhang and Ni, 2022). Reducing greenhouse gas
emissions, guaranteeing fair employment practises, and eliminating corruption are all examples of
sustainable practises. When doing business with Samsung, it is imperative that you follow the
guidelines outlined in their Supplier Code of Conduct (Shala, Prebreza and Ramosaj, 2021). Samsung

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also does frequent audits and checks on its suppliers to guarantee their continued compliance and
growth. Samsung seeks to have a good effect on its stakeholders and society at large by working with
suppliers that share these values.

4. Supplier Evaluation Process

A. Data Collection
1. Gathering supplier data
The purpose of Samsung's supplier assessment procedure is to gauge the efficiency and reliability of
Samsung's supply chain partners. The supplier assessment process includes collecting and evaluating
data on the suppliers' capabilities, dependability, compliance, and innovativeness. Samsung collects
information on its suppliers using a wide range of methods, including questionnaires, audits,
interviews, scorecards, and comparisons. Samsung is able to better understand its suppliers'
capabilities, areas for growth, and potential pitfalls via the data it collects about them (Shamout and
Elayan, 2020).

2. Data sources (e.g., surveys, audits, reports)

Surveys, audits, reports, and supplier feedback are just some of the ways in which Samsung gauges
its vendors' performance. Samsung use several data sources for evaluating its suppliers' efficiency,
quality, compliance, and sustainability. For instance, Samsung often polls its customers and workers
to gauge their level of contentment with the goods and services provided by its vendors. In addition,
Samsung conducts audits to ensure its suppliers are following the Samsung Supplier Code of Conduct
and other applicable guidelines (Bai and Satir, 2022). To assess the sustainability, innovation, and
environmental effect of its suppliers, Samsung reviews the reports submitted by them. Samsung
aggressively seeks input from a wide variety of stakeholders, including NGOs, media outlets, and
trade groups, in order to track its suppliers' social responsibility and reputation. Samsung has a
Supplier Evaluation Process with clear guidelines to provide impartial and reliable outcomes (Sun,
Zhang and Ni, 2022). There are four main phases to the procedure: data collection, processing,
scoring, and dissemination.

5. Implementation of Best Practices

When compared to other consumer electronics companies, Samsung has neither the market share
nor the renowned reputation for groundbreaking innovation and great product quality that its
competitors enjoy. Samsung is always on the lookout for methods to better its suppliers'
performance and their ability to work in tandem with the company. Samsung has begun taking a
number of steps in that direction.

 Forging lasting alliances with key vendors that believe in Samsung's mission and share its values.

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 Many important criteria, such as quality, timeliness, and cost, go into the assessment of a
supplier's performance (Strohmer et al., 2020).
 The introduction of programmes designed to help suppliers expand their operations, such as
training programmes, consultancy services, and platforms for exchanging data.
 Supporting efforts to encourage suppliers to lessen their negative effects on the environment
and increase their sense of social responsibility.
 Providing service providers that routinely go above and above with recognition, rewards, and
new possibilities.

By implementing these changes, Samsung is able to give its customers with better products and
services by increasing the effectiveness and efficiency of its supply chain (Liu et al., 2022).

6. Competitive Advantage through Supplier Evaluation

Assessing a company's suppliers means determining how reliable they are in terms of meeting
deadlines, costs, level of innovation, and ethical standards. Samsung evaluates all of its vendors
annually and gives bonuses to the best performers. This helps Samsung maintain a high standard of
product quality and innovation while also encouraging a more responsible and ethical supply chain
(Choi et al., 2022). By accomplishing this, Samsung solidifies its status as a frontrunner in the global
consumer electronics market. Successful companies like Apple, Toyota, and Walmart have all put an
emphasis on their partnerships with their suppliers.

7. Conclusion
Achieving operational excellence is a top priority for Samsung, and the company recognises the need
of a thorough supplier assessment procedure. This method is vital because it allows the firm to
choose suppliers that consistently provide high-quality goods and services. It also helps with things
like saving money and lowering danger while paving the way for long-lasting connections. Supplier
evaluation is crucial to a company's success because it encourages all links in the supply chain to
improve their performance in key areas like quality, innovation, sustainability, and social
responsibility. This demonstrates how vital supplier assessment is for not just Samsung's competitive
edge but the whole sector.

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8. References

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