About Samsung

Globalization and Operation Excellence through Process Innovation at Samsung Electronics
Dr. Sungchil Park Executive Vice President Samsung Electronics
Agenda

Samsung Electronics Overview SCM Vision & Roadmap Innovation Journey Next SCM Initiatives Lesson Learned
2006 Samsung CONFIDENTIAL
Samsung Electronics Overview

History

History

Global Network
57 Countries
Production Subsidiaries Sales Subsidiaries Production & Sales Subsidiaries Branch Offices R&D Center
19 38 8 31 10
5

Brand Equity
2002
Rank Rank Company Company
($B) Value Value Rank Rank
2003
Company Company
2004
Company Company
2005
Company Company
($B) Value Value
1 1 2 2 3 3 4 4 5 5 6 6 21 21
Coca-Cola Coca-Cola 69.6 69.6 Microsoft Microsoft 64.1 64.1 IBM 51.2 IBM 51.2 GE 41.3 GE 41.3 Intel Intel Nokia Nokia Sony Sony
:: ::
1 1 2 2 3 3 4 4 5 5 20 20
Coca-Cola 70.5 Coca-Cola 70.5 Microsoft Microsoft 65.2 65.2 IBM 51.8 IBM 51.8 Nokia 29.4 Nokia 29.4 Intel Intel Sony Sony
::
1 1 2 2 3 3 4 4 5 5 20 20
Coca-Cola 67.3 Coca-Cola 67.3 Microsoft Microsoft 61.3 61.3 IBM 53.7 IBM 53.7 GE 44.1 GE 44.1 Intel Intel Sony Sony 33.4 33.4 12.7 12.7
1 1 2 2 3 3 4 4 5 5
Coca-Cola 67.5 Coca-Cola 67.5 Microsoft Microsoft 59.9 59.9 IBM 53.4 IBM 53.4 GE 47.0 GE 47.0 Intel Intel 35.6 35.6
30.9 30.9 30.0 30.0 13.9 13.9
31.1 31.1 13.2 13.2
20 20
21 21 22 22 28 28 41 41 58 58 73 73 ::
Samsung Samsung
DELL DELL Ford Ford Sony Sony
Apple Apple
15.0 15.0
13.2 13.2 13.2 13.2 10.8 10.8 8.0 8.0 5.3 5.3 3.9 3.9 ::
21 21 10.8 10.8
8.2 8.2 3.1 3.1 2.3 2.3 :: 31 31 35 35 39 39 55 55 61 61 ::
Samsung Samsung
Nike Nike Canon Canon
Siemens Siemens
12.5 12.5
9.2 9.2 8.0 8.0 7.4 7.4 5.0 5.0 4.5 4.5 ::
25 25
9.2 9.2 33 33 81 81 93 93 ::
Samsung Samsung
::
31 31
DELL DELL
34 34
35 35 ::
Samsung Samsung
Nike Nike
::
8.3 8.3
7.7 7.7 ::
Nike Nike Motorola Motorola Starbucks Starbucks

::
Pizza PizzaHut Hut Yahoo! Yahoo!

::
Yahoo! Yahoo! Motorola Motorola

::
* Source: Business Week


Business Areas
24% Digital Media

Visual Display, Computer, Digital Video, Printer
28% Telecommunications
Mobile phone, Communication Network, Optical Fiber
6% Digital Appliance
Air Conditioner, Refrigerator, Washing Machine, MWO
Leading the Digital Convergence Revolution

29% Semiconductor
Memory, System LSI, HDD, OMS
13%
LCD
TFT-LCD
*Based on 2004 Actual

7

Leading Products
Worldwide Market Share
DRAM 32% SRAM 24%
No.1
Monitor 22% TFT-LCD
(Large-Area)
Color TV 9.4%
Flash Memory 34% MCP 29%
20% DDI 18%
* Based on 2005 Performance

SCM Vision & Roadmap

Vision
Vision
Leading the Digital Convergence Revolution

3P Innovation
Digital
- Product -
- Process -
Company
- Personnel -
Product competitiveness as a fast mover, based on core technology

Supply chain capability that ensures best-of-the -industry speed
Dynamic organization built on creativity, challenge, and autonomy

9
SCM Vision & Roadmap

Process Innovation Vision
Digital -Company
Market Driven Change
Product Process Simple & Speed
Active Collaboration
Personnel
Improve supplier capacity to support market needs
R&D Mgmt
Supply Mgmt
Demand Mgmt
Sharing product/logistics information
Improve Customer Satisfaction
Strategy
Securing inter/intra company connectivity Delivering market needs
Market Driven Process

R&D R&D Proc. Proc. Mfg. Mfg. Lgts. Lgts. Mktg. Mktg. Sales Sales Svc. Svc.
Maintain market competitiveness to support customer needs Sensing market information
Business Management 6 Sigma / IT infrastructure
Key Actions

Transform Transform individual individual processes processes into into customer/market-driven customer/market-driven Enhance Enhance customer customer and and supplier supplier collaboration collaboration Optimize and upgrade 4 Mega Processes Optimize and upgrade 4 Mega Processes Improve Improve value value creation creation with with enhanced enhanced marketing/sale/development marketing/sale/development
10
Innovation Journey
1994~1996
Master planning & Establish infrastructure (1994~96)
Extended SCM
3P innovation
(Product / Process / Personnel)
& APS pilot (1997~99)
Consolidated operation excellence & APS roll-out (2000~03)
Marketdriven SCM (2004~)
APS Upgrade, Back to Basic SRM, Logistics, Performance to Plan Collaboration Mkt.-Driven SCM
Basic SCM
Focused on manufactng. manufactng. productivity improvemnt. improvemnt. Implement separate legacy systems
APS Pilot - Display -- Memory ERP Roll-out --All Mfg div. --Major sales sub. ERP Roll-out --FI/CO --other subsidiaries GBM Designed & Structured
APS roll-out - 12 GBMs -- 46 Sales Subsidiaries
Infrastructure
ERP Implemnt. Implemnt. -Major domestic Mfg divisions
Plan & Change Mgmt.
PI/SISP mastermasterplan
Organize GOC in GBMs
SCM training -Enterprise wide
1992
93
94
95
96
97
98
99
2000
01
02
03
04
05
11
SCM Vision (1994)

Deliver the right products (quality and quantity) at the right time (on time and quick delivery) at the lowest cost Anybody in Samsung supply chain can access necessary data at anytime and anywhere through globally integrated information systems Process organization to make quick decisions for customers
7 Major process
Customer Facing Demand Mgmt Strategic Resource Mgmt Resource Operation Manufacturing Distribution Customer Service
To-Be Process vision

Single Point of Contact, Customer Collaboration Single Number Forecast, Real-Time AATP Supplier Collaboration, Global Material Planning Global Supply and Demand Balancing Flexible Manufacturing, Cell Manufacturing Optimized Delivery Plan, Postponement, Supply Chain Network Optimization Value Added Customer Services
Over 100 people from all parts of organization worked on this Visioning Work
12
Achievements
Master Planning & Build Infrastructure (1994~1996)

Build infrastructure first Process innovation at each site

No end to end integration Integration started with APS implementation in 1998
Automate the transaction process

Domestic Sales Example:

Before Batch No ATP Post-Pricing After Real-Time ATP with inventory 30% reduction Pre-Pricing
Order Management Available-to-Promise Headcount Pricing
13
Innovation Journey
1997~1999
Extended SCM
3P innovation
& APS pilot (1997~99)
APS Upgrade, Back to Basic SRM, Logistics, Performance to Plan Collaboration Mkt.-Driven SCM
Basic SCM
APS Pilot - Display - Memory ERP RollRoll-out -All Mfg div. ERP Implemnt. Implemnt. -Major sales sub. -Major domestic ERP RollRoll-out Mfg divisions -FI/CO -other subsidiaries GBM Designed & Structured
APS roll-out - 12 GBMs -- 46 Sales Subsidiaries
Infrastructure
Plan & Change Mgmt.
1992
93
94
95
96
97
98
99
2000
01
02
03
04
05
14
Key Innovation Areas Enabled by SCM

Clarify Global Business Ownership
As-Was
Dispersed business ownership (multiple profit centers) Internal competition for profit & inventory responsibility avoidance Biz Biz
Biz Biz owner owner Biz Biz owner owner Manufctring. . Manufctring Manufctring. Division Division Overseas Overseas Plants Plants Domestic Domestic Sales Sales
Compete with profit & inventory
As-Is
Single owner of Marketing, R&D, Global resource management Single owner of end-to-end process throughout the entire supply chain
Corporate Corporate HQ HQ Functional Functional Staffs Staffs
owner owner
Overseas Overseas Sales Sales
Customer Customer
Customer Customer
Biz Biz owner owner
Domestic Domestic Plants Plants
Global Business Manager is the only business owner (profit center) of the each product segment The rest organizations became cost centers GOC plays important role of managing global supply chain, synchronizing sales & production
Biz owner owner Biz of product product of segment segment
Global Global Business Business Manager Manager

Global Operation Center (GOC)
Cost Centers
Overseas Overseas Plants Plants Overseas Overseas Sales Sales Domestic Domestic Sales Sales
15

Organization: GBM & GOC
Process-type organization: GBM*

GBMs of each product group implement their business strategies with global responsibilities and authorizations for profits and losses across the overall supply chain Sales and production subsidiaries play the role of cost centers supporting the GBM
Supply Chain planning/management/synchronization/ optimization: GOC**

Adjusts and controls sales and manufacturing volumes globally Allocates and adjusts materials to efficiently manage overseas plants. Improves and supports the entire supply chain with SCM operation ownership Single contact point for SCM operations Manufacturing Production Sales/ Logistics Supplier
Customer
* GBM : Global Business Management ** GOC : Global Operation Center
GOC
Integrating sales and production
Operating global supply chain
16

Weekly Global Planning Cycle
As-Was
Monthly Cycle
Sales Forecast Manager /Order Sales PSI Subsidiary Sales & Sales Plan Marketing Global Allocation Support Plan Production Production Management Plan Purchasing Plan
Purchasing
As-Is
Weekly Cycle
Sales Manager Sales Manager Sales & Marketing Global Support Production Management
Forecast /Order PSI Sales Plan Allocation Plan Production Plan Purchasing
ConConcurrent current Planning Planning on on a a Single Single Planning Planning Table Table within within a a day day
Purchasing Plan
Real-time global information sharing (market and supply chain planning information) Generation of a single plan with simultaneous consideration of global constraints Reduction in global planning cycle time: monthly cycle weekly cycle
17

Global Demand Mgmt and Consensus Based Forecasting
As-Was
Customer Customer Salesman Salesman
W14 ISD Total Demand Forecast (all SKUs)
7000 6000 5000 4000 3000 2000 1000 0 W14 W15 W16 W17 W18 W19 W20 W21 W22 W23 W24 W25 W26 W27 W28 W29
As-Is
Local Local Marketing Marketing Customer Customer Salesman Salesman Local Local Marketing Marketing

10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 W14 W15 W16 W17 W18 W19 W20 W21 W22 W23 W24 W25 W26 W27 W28 W29
Traditional PSI method amplifying bull whip effect

12000 10000 8000 6000 4000 2000 0 W14 W15 W16 W17 W18 W19 W20 W21 W22 W23 W24 W25 W26 W27 W28 W29
Global Global Support Support
HQ HQ Marketing Marketing
Global Global Support Support
Every individuals sales plan/forecast Kept In one real-time view Checked against actual
HQ HQ Marketing Marketing
Sequential to concurrent & consensus-based forecasting process on a single table MBO based on forecasting/inventory personalization (by sales subsidiary & salesman) No Forecast, No Allocation (NFNA) Sales plan based on consensus result of RTF (Return to Forecast) from GOC
18

Global Optimization by Concurrent Planning
As-Was
Allocation by each plant Supply plan and Distribution plan by local plants
Korea Korea Plant Plant Global Global Command Command Center Center China China Plant Plant
As-Is
Global Allocation by Global Command Center Concurrent Optimized Plan & Synchronization of Supply-Demand
Europe Europe Plant Plant
N.America N.America Plant Plant Suppliers Plants Sales Subs Suppliers Plants Sales Subs
Global production/distribution planning with consideration of all sales and manufacturing subsidiaries Strategy driven planning for global resource optimization & profit optimization Global visibility of all global operations (APS UI, no order visibility)
19

Global Real-Time Order Promising (AATP)
As-Was
Customer Customer Inv. Shortage ATP based on local inventory AATP based on supplying plan HQ HQ
As-Is
ATP ?
If you dont have products in your warehouse and you cant supply them, I will buy them from another vendor.
Allocation
Manager Manager
Salesman Salesman
Customer Customer Mat. Plan
OnHand Salesman Salesman
OnHand
InTransit
In Prod.
Prod plan
Pre-allocation down to salesman level based on forecast and production constraints AATP based on global inventory & production plan AATP policy based on customer priority and business policies
20
Achievements
Case: Visual Display Division
P S I
Before SCM
Large inventory level caused by out of sync between S and P
P S I P S
After SCM
P S
(1998)
(2002)
21
Achievements
Case: Visual Display Division
6,000 5,000 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 94 95 96 97 98 99 00 01 02 SCM Roll-Out TV Biz Merge
Sales Qty (100K)
Sales Amt ( M$ )
Profit ( 100K$ )
( Monitor Business )
22
Achievements
3P Innovation & APS Pilot (1997~1999)
3P Innovation

Product: Restructuring Process: Quick Response, D+ Delivery Personnel: Process oriented organization
Successful internal APS showcase implementation (Display APS Pilot) Global Operation Process (GOP) implementation

GOP ownership: GBM (Global Business Management) GOP control tower: GOC (Global Operation Center)
23
Achievements
3P Innovation & APS Pilot (1997~1999)
Restructuring
Spin-off non-core business functions

Domestic After-Market Service, Logitech (Domestic Transportation) 19 including Medical Equipment & Defense Security, automobile asset management
Dispose of non-profitable business units

Outsourced non-core cost centers

1997
Employees #(Korea) Debt Ratio Debt (USD) 59,000 300% $ 13 Billion
1999
39,000 85% $ 5.7 Billion
24
Innovation Journey
2000~2003
Extended SCM
3P innovation
& APS pilot (1997~99)
Back to Basic APS Upgrade, SRM, Logistics,Performance to Plan Mkt.-Driven SCM Collaboration
Basic SCM
APS rollroll-out - 12 GBMs - 46 Sales Subsidiaries
Infrastructure
Plan & Change Mgmt.
1992
93
94
95
96
97
98
99
2000
01
02
03
04
05
25
Key innovation areas enabled by SCM

SRM Strategic Sourcing
As-Was
No leverage of global buying power during negotiation at local site
Corporate Corporate Procurement Procurement Business Business unit unit Business Business unit unit
As-Is
Frequent negotiation at the global and/or local level with global visibility
Business Business unit unit Business Business unit unit
Manual & subjective supplier evaluation once or twice a year only

Local Local Plant Plant Procurement Procurement Local Local Plant Plant Procurement Procurement Local Local Plant Plant Procurement Procurement
Global aggregation at any time & level Corporate Corporate Procurement Procurement
Local Local Plant Plant Procurement Procurement
Spend analysis by suppliers & parts at site level only
Spend analysis by suppliers & parts at both global and site levels
Corporate spend aggregation, spend visibility by region, by business unit Baseline price and variance management Strategic procurement decision support by providing rapid & accurate information
26

Synchronize R&D, Purchasing, Suppliers - Product Sourcing
As-Was

As-Is
Part/Manufacturer/Supplier # Item Spec Data. Cost (Standard, Target, Tooling, Bid) Supplier Pref. Obsolescence Data AML/AVL Schedule Data Supply Status Calculated Preference
Suppliers Parts Price
Sourcing Workflow
Strategic Sourcing MRP

CSM
PDM Engineering BOM PPDB MCAD #2 eCAD #1 PDM 1 PDM 2 CPC

MCAD #1
SRM Sourcing BOM
CAD File Part # Description Quantity Revision

Design Workflow
CAD File Part # Description Quantity Revision Configuration
Concurrent Workflow Target Target Cost Cost !! Preferred Preferred Parts/Suppliers Parts/Suppliers !! Part Part Reuse Reuse !! Design Design for for Supply Supply !! Faster Faster time time to to Market Market !!
Optimize designs for sourcing and supply chain constraints before they reach manufacturing for best total margin and cost for this product Establish Component & Supplier Master (CSM) to bridge design & procurement Continuous monitor & analysis of part reuse, target cost, BOM grading, & obsolescence
27

1C1B: One Contact, One Bill
As-Was
Transportation plan and execution were done by different dedicated regional 3PLs
As-Is
Centralized & integrated transportation management (managing all operations, plan to execution)
Centralized Logistics
MFG Region Dedicated 3PL DC MFG
X-Docking
Direct Ship
Regional DC
Customer
Customer
Route Optimization

Outsourcing to 3PL Network Optimization People Consolidation Minimizing transportation cost by route optimization, X-Dock, direct shipment etc. Real-time proactive monitoring and multi-dimensional KPI management
28
Achievements
APS Roll-Out: SCM Performance Index (2000~2003)
SCM Performance Index Forecast Accuracy On-Time Delivery Days of Inventory
3Q 2001
22% 32% 20 Days
4Q 2003
41% 81% 14 Day
2001
2002
2003
Q1/2004
Stagnation in Performance Improvement
29
Innovation Journey
2004~
Extended SCM
3P innovation
& APS pilot (1997~99)
Back to Basic/ APS Upgrade, Performance SRM, Logistics, to Plan/ Collaboration Mkt.Mkt.-Driven SCM
Basic SCM
APS rollroll-out - 12 GBMs - 46 Sales Subsidiaries
Infrastructure
Plan & Change Mgmt.
1992
93
94
95
96
97
98
99
2000
01
02
03
04
05
30
Recent SCM Initiatives

Recent Activities
Based on the visibility improve delivery and demand management capability
(Performance to Plan) 04 : Back to Basic and improve visibility
Clean up mater data Improve data accuracy Improve system functionalities and usability Training all employees
05 ~06 : Improve SCM capability

Delivery capability
Make Good Production Plan On time manufacturing on hourly basis Daily production and shipping Supplier delivery capability
Demand Management capability

Make Good Sales Plan Sell to Plan On Time Delivery
06 05
04
[ Focus on S&OP ] [ Focus on SCM Basic Infrastructure ]
[ Focus on Sales Management ]
Improve Distribution Capability Improve APS Usability

31

3-Day Committed Operation (3COR) for Back to Basic
As-Was As-Is
Performance to Plan
Fix
Set Aggressive Goal
Material Material or or Capa Capa Issue Issue
Optimization (Do Your Best)
Set Achievable Goal

Material Material or or Capa Capa Issue Issue
Achieve It!!!
Line
Shop Floor
Rescheduling ASAP
Line
Shop Floor
Stop, Understand the Problem & Fix it
No Trust among Supply Chain Entities
Trust among Supply Chain Entities
Focused on Market-Driven SCM, but difficult to realize (thus Back-to-Basic with 3COR) Trust based Performance-to-Plan with 3 Principles: 1) Maintain 100% accurate master data, 2) clear rule define and follow the rule, and 3) system-driven operation
32

Daily Execution Enhancement for Quick Response
As-Was
c Weekly Supply Request
Supply Request = 1200
As-Is
Si Plan Capacity Weekly, Execute Daily with Customer Order
Fixed
W1
W2
Replenishment Request = 200
Weekly supplying request within the weeks given RTF** Level/uniform load production is not encouraged
Line
Daily replenishment request Level/uniform load production is encouraged to synchronize with daily changing market demand Daily GR Plan for 2 weeks
Secure 20% JIT material inventory buffer
Line
Post management of possible highinventory level by GR* control
Sales, transportation, and manufacturing synchronizes with daily demand fluctuation Plan weekly with daily plan adjustment: Plan weekly capacity, but if there is no customer order then no production/execution) Daily level production is encouraged at manufacturing
33
Achievements
Market-Driven SCM: SCM Performance Index (2004~2005)
SCM Performance Index Forecast Accuracy On-Time Delivery Days of Inventory
3Q 2001
22% 32% 20 Days
4Q 2003
41% 81% 14 Day
4Q 2005
45% 91% 14 Day
2001
2002
2003
2004
2005
34
Overall Achievements
Financial Benefits of SCM
35
Overall Achievements
AMR Research 2005 Supply Chain Top 25
36
Next SCM Initiatives

Adaptiveness
- Strengthen partnership with customers and business partners
P/O process collaboration and integration of sales channel inventory Toward Merchandise Planning
Differentiation
- Set-up personalized response process for individual customer needs
Mass Customization
- Provide total solution for customer needs

DELL Plus : Customized system design ~ support after-sales management
- Fast response to market change

Nokia: Response to a market change within 1 hour over entire supply chain Toyota: Delivery within 5 days from order receipt (D+5 delivery)
Market Driving
- Enhance market sensing capability
Foresee market change Pre-occupy opportunities Drive the market
- Fast response to supply chain exceptions

Monitoring, analysis and quick response to supply chain events
* Merchandise Planning : It supports Field Marketing Strategy by detecting and analyzing product exposures, display states, store info (competitors, prices, inventory, sales status), etc., (Time To Market realization) * Mass Customization * Dell Plus Service : Phrase that comes from a combination of 'Mass in Mass Production and 'Customization : Total Solution of Software, Hardware, Asset Management, Part Replacement, etc.,
37
Lessons Learned
Characteristics of Samsung SCM
Top Down: Tops mind and commitment

May 2006, Monthly Executive Speech
First, must further internalize the D+3 Internal Benchmarking Day Production SCM experts Commitment Mr. Jong-Yong Yun, CEO Framework initiative Synchronization of Process, Systems and Organization in supply-related areas End to End (customer to supplier) process Second, must further enhance our Enterprise Architecture: SAP R/3, i2 SCM competency in demand-side areas such as sales and marketing GBM, GOC,
Education
PI, PS
Third, need to further strengthen our innovation activities for raising cost competitiveness
Change Management
May 2006 Monthly Executive Speech
38
Variability in todays market the primary force behind inefficiency

Rapid Rapid Market Market Change Change Global Global Operation Operation
10km/h
300km/h
Endless Endless pressure pressure To To Reduce Reduce Cost Cost
High forward visibility Intelligent and fast decision making & execution
(Process Capability)
Optimization across business functions

(Reduce Complexity)
Velocity
39
Lessons Learned

Change organization, Process and then System Trust across supply chain is the key

Visibility first, then Capability Performance to Plan S&OP Good Plan Performance to Plan Fast Replanning with PDCA
40
Be an expert (professional) and understand overall business, especially finance and control. MOT is a process of managing technology. Innovate process, system and people. Technology for customer satisfaction and money, not for engineering excellency.
41
SCM at Samsung in the Past

What did SCM stand for in the beginning of SCM journey at Samsung?

Supply Chain Management? Solution Consultant Manager? Software Configuration Management? Source Code Management? Sweet Chin Music (wrestling finishing move)? ..
SCM: Set for Crash Mode

42
SCM at Samsung Today
MCS: Money Collecting System

43
44

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Globalization and Operation Excellence through Process Innovation at Samsung Electronics

Dr. Sungchil Park Executive Vice President Samsung Electronics

2006 Samsung CONFIDENTIAL

Samsung Electronics Overview

2006 Samsung CONFIDENTIAL

Samsung Electronics Overview

2006 Samsung CONFIDENTIAL

Samsung Electronics Overview

Samsung Electronics Overview

($B) Value Value Rank Rank

($B) Value Value Rank Rank

($B) Value Value Rank Rank

($B) Value Value

30.9 30.9 30.0 30.0 13.9 13.9

31.1 31.1 13.2 13.2

Nike Nike Motorola Motorola Starbucks Starbucks

Pizza PizzaHut Hut Yahoo! Yahoo!

Yahoo! Yahoo! Motorola Motorola

* Source: Business Week

Samsung Electronics Overview

24% Digital Media

Leading the Digital Convergence Revolution

*Based on 2004 Actual

2006 Samsung CONFIDENTIAL

Samsung Electronics Overview

Flash Memory 34% MCP 29%

20% DDI 18%

* Based on 2005 Performance

SCM Vision & Roadmap

Leading the Digital Convergence Revolution

Product competitiveness as a fast mover, based on core technology

Supply chain capability that ensures best-of-the -industry speed

Dynamic organization built on creativity, challenge, and autonomy

SCM Vision & Roadmap

Improve supplier capacity to support market needs

Sharing product/logistics information

Improve Customer Satisfaction

Securing inter/intra company connectivity Delivering market needs

Market Driven Process

Maintain market competitiveness to support customer needs Sensing market information

Business Management 6 Sigma / IT infrastructure

2006 Samsung CONFIDENTIAL

& APS pilot (1997~99)

Consolidated operation excellence & APS roll-out (2000~03)

Marketdriven SCM (2004~)

APS roll-out - 12 GBMs -- 46 Sales Subsidiaries

ERP Implemnt. Implemnt. -Major domestic Mfg divisions

Plan & Change Mgmt.

Organize GOC in GBMs

SCM training -Enterprise wide

2006 Samsung CONFIDENTIAL

SCM Vision (1994)

To-Be Process vision

Build infrastructure first Process innovation at each site

No end to end integration Integration started with APS implementation in 1998

Automate the transaction process

Domestic Sales Example:

Order Management Available-to-Promise Headcount Pricing

2006 Samsung CONFIDENTIAL

& APS pilot (1997~99)

Consolidated operation excellence & APS roll-out (2000~03)

Marketdriven SCM (2004~)

APS roll-out - 12 GBMs -- 46 Sales Subsidiaries

Plan & Change Mgmt.