During the last lectures we were talking about inventory management. As we know, an improvement in the process of managing inventories can save a lot of money for a company, especially for a big one. Samsung Electronics is a relevant example of such an improvement.
Two weeks ago (Oct 17) Russian Railways and Samsung signed a memorandum of understanding (MOU) for collaboration on the Trans Siberian Railway Project.
It means, that Samsung Electronics wants to shift from marine transportation system, which it has been using before, to the railway transportation when delivering materials and final products to European countries from Korea and China.
Starting from January 2016, Samsung has been transporting some materials for TVs and washing machines from China to the factory in Kaluga, Russia, via the Trans Siberian Railway (TSR) and the Trans-Manchuria Railway (TMR). According to the article, the usage of the railway system allowed Samsung to decrease the lead time from 50 to 18 days (which is more than 50% decrease!).
Samsung is planning to use the TSR for the transportation of products to Europe (in particular, Poland, Hungary and Slovakia). The lead time will be shortened from 35 to 18 days in comparison to the current marine transportation system.
This dramatic change will definitely bring a lot of benefits to the company. Reduced inventory costs and more stable inventory control are ones of them.