Samsung Electronic Co. recently recalled its newest phone, the Galaxy Note 7 over concerns of its battery overheating and catching fire. The company took steps to cut the supplier of the defective batteries out of its production process but the problem still persists in replacement phones.
The number of different manufacturers and supplier that Samsung relies on for parts (often multiple suppliers for a single part) makes it difficult for problems like this to be detected and traced in a timely fashion. Poor communication between manufacturers and their suppliers can stem from many reasons, in this case probably a push to release the phone for sale before its competition, the iPhone 7. An impending release date could have led to a rushed planning process, or selection of lower quality suppliers by the company.
Reducing costs by outsourcing supply chain processes may lead to sacrificed quality and increased communication failures, with Samsung being a prime example. To avoid these failures, it is crucial for companies to focus on developing new technologies and techniques to keep up with the growing size of supply chains.
One technology that promises to increase supply chain visibility and traceability is blockchain. Blockchain creates a permanent digital ledger of transactions along a series of users, requiring no central administrator. Blockchain would have allowed Samsung to more easily trace the path of faulty batteries back to root of the issue with their suppliers.
After tracing this path Samsung would have been able to fully eradicate the use of defective batteries, but instead they only took care of part of the problem due t incomplete information. This example goes to show that logistics truly works in two directions, and that having a record of the supply chain can be just as crucial as the supply chain forecasting and planning that we have learned in class.