What to Do in the Case of Emergency: Lessons for the Supply Chain Industry to Take Away from the Samsung Recall
The recent debacle involving Samsung’s recall of its dangerously faulty Galaxy Note 7 has left many questioning not only the South Korean-based electronics giant’s decision making, but also that of the supply chain industry in general. Concerns about suppliers’ ability—especially those in tech and electronics—to maintain quality control against a market demand for faster and faster product launches, in order to keep up with the latest technological upgrades, has many in the industry searching for answers that will prevent future crises, or that may, at the very least, mitigate the damage caused by them.
The size and complexity of modern supply chains has created a situation where proper product management can get lost in the shuffle. Miscommunication between internal company departments, as well as between suppliers, manufacturers, and retailers, can lead to products that are not ready for launch being sent to market anyway. The lack of transparency in regards to a product’s life cycle, when combined with other factors, such as an increasing dependency on cheap labor for assembly, may result in faulty (or, as was the case with Samsung’s fire-risk phones, dangerous) products being released to an unknowing public, with little-to-no preparation in place should there be a need for a major recall.
More visibility along the supply chain is one of two major answers to this problem. Although that seems easier said than done, there are several programs, in varying stages of development, that may soon offer new methods to help, including digital twin systems (wherein a digital model of the product is tested before the full product launch), and VR technology that would allow companies to see their product in stores without being physically present. Newly upgraded cloud platforms offer the best potential tool for visibility optimization. These produce digital records (which are un-erasable) of every transaction of a product along the supply chain. This allows for more than simple tracking—it allows companies (both those with their own shipping departments as well as ones that use a third party logistics provider) to get a detailed and thorough overview of the product’s life cycle, giving them the ability to trace whatever problems arise to its source. These cloud platforms can also provide a better understanding of how wide-reaching a problem is, before it is too late.
The other factor that industry professionals should be focusing on in the wake of the Samsung recall is the optimization of their reverse supply chains. Often considered the red-headed stepchild of retail and shipping, so little focus is given to the process of returns and recycling that when an emergency recall is necessary, companies may find themselves completely unprepared.
There are any number of ways in which the reverse supply chain can be optimized, but as these last few weeks have shown, such optimization is not only necessary, it is more important than ever. Those who doubt that should take a look at the confusing and bungled exchange program that Samsung put out to its customers, as well as the loss of one-third of the company’s projected profits for the year, and reconsider.
In the meantime, Samsung’s loss can and should serve as a sobering wake-up call to other companies and suppliers. They need to prepare themselves for just such a catastrophe, by streamlining communication between their departments and one another; put as much, if not more, of an emphasis on quality control as they do marketing and design; and ensure maximum transparency and visibility along both their forward and reverse supply chains.
