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CASE STUDY: Samsung: Moving Faster

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VoicenData Bureau
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Samsung was the first Korean company to enter the Indian market. And has been doing well in the audio, video, and white good segments since its inception in December 1995. The company started its operations by opening its offices in the north and followed it with opening offices in the south and west within a year. Today, it has its manufacturing base at Noida near Delhi where colour TVs and microwaves are manufactured. The company has a strong network of regional and branch offices. Its 1,000-dealer network for supply and 



distribution gives it an edge over competitors. 

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In 1995, when the company started its operations in the country, the computing functions were centralized at the headquarters. The corporate office in Delhi had a Local Area Network (LAN) comprising of a HP 9000 server and a Windows NT server. All information with regard to inventory, record of sales, prices, and other database applications pertaining to the business were maintained at the corporate office. The LAN at each of the sales and distribution offices maintained records pertaining to their geographical area of operation. Once the local geographical area updated its daily reports, the records were sent in a floppy by courier to the head office that updated their records. 

If the floppies were lost in transit and if the floppy diskettes were not working, the corporate office was unable to update the records in time resulting in chaos. There was a problem related to the timing and the loss of information. Even the customers’ complaints were not attended, as information was unavailable resulting in dissatisfaction among customers. To compensate for the loss of the floppies, people had to depend more on the voice network resulting in an increase in the usage of telephone and fax for clarifications. The extensive use of fax and telephone resulted in the escalation of the telephone bills. To cut down the loss, the company decided to connect its LANs to a leased-line. But the availability of leased-line in non-metro within the stipulated time was difficult and time consuming. 

So Samsung opted for a VSAT network which was readily available and was more reliable. HCL Comnet was given the prime responsibility of designing and installing the 18-site network. Seeing the utility of the network, eight more locations have been added. The number is slated to go up to 40 by 2000 according to Rajesh Chopra, assistant general manager, Information Systems, Samsung India Electronics Ltd. 

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In 1997, Samsung incorporated the highly advanced ERP package SAP R/3 for its business applications through HCL Infosys. Currently, the company is using Financials, Sales & Distribution, Warehouse, and Manufacturing models of SAP. The company has also incorporated the after sales service model called ProFocus 21, a process for customer satisfaction in the 21st century which was customized according to the Indian conditions. 

After finalizing the VSAT service provider, the company opted for Skystar Advantage Network facility that had

extremely sophisticated security and protocol features. The network provided a highly reliable two-way voice and data communications between a central hub and

geographically dispersed sites. VSATs were installed in the LAN at the Delhi office along with the other sales offices at Kundli, Jaipur, Lucknow, Chandigarh, Mumbai, Ahmedabad, Pune, Indore, Chennai, Hyderabad, Bangalore, Cochin, and Ghaziabad—all of which communicated with each other by means of the Skylink hub of HCL Comment at Noida. The various modules of SAP used by the organization were then integrated onto the VSAT network to enable online communication among various offices. Samsung was also connected to their main global office in Korea by means of a 2-Mbps redundant separate terrestrial network from the corporate office at Delhi so that there was easy flow of information from Korea to India and vice-versa. The network, with a cost of around Rs 1.2 crore, is presently used for data communications but the company is planning to use it for voice communications from March onwards, says Chopra. Presently, 104 authorized service centres are using the VSAT-based network for faster implementation of customer problems and very soon the number is going to increase to 150 giving customers the best in terms of after sales service. The company is running its internal messaging through VSAT network that reduces the time taken for the decision making process. If any request is pending on somebody’s mailbox for three days it automatically moves to the next person in the hierarchy thus speeding up the decision making process. The remote location user can see the Purchase Sales Inventory (PSI) as information from all branches about their expected sales plan are consolidated and one can keep track of their inventory and their dispatches. 

Regarding Return on Investment (RoI), Chopra said, “We got the RoI in the first year itself in terms of efficiency and cost.”

Once the dealer gets an order from the customer, the order is passed on to the nearest branch location which enters into the SAP where a stock checking and credit checking is done. After it is processed, a mail goes to the warehouse and the courier companies. In the warehouse, which is located close to the branch location, the dispatch takes place thrice a day. The dealer can keep track of his orders once it is processed thus helping him to plan his operations accordingly. “The efficiency of the system can be judged by the fact that 95 percent of the dispatch request by the dealers are made on the same day and we are expecting it to make it 100 percent,” says Chopra.

Customers can also login their complaints through the web site. The message passes on to the nearest Authorize Service Centre (ASC). The ASC contacts the customer immediately. Presently the turnaround time for 95 percent of the cases is 24 hours. If the calls are not attended within three days it scales down to the branch location. If it is not attended by the branch location within a week, it passes to the Customer Satisfaction Head Office (CSHO). The fact that till now no complaints have come to the CSHO shows the ruggedness and the reliability of the network as well as the efficiency of the people which increases multifold times when an efficient and reliable network is in place.

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