"Persistent Global Supply Chain Risks"... Samsung and LG Establish Dedicated Teams

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As global supply chain issues have emerged as a core business risk due to the impact of COVID-19, Samsung Electronics and LG Electronics established and reorganized dedicated teams at the end of the year and completed preparations for next year's business. The need for organizations to actively respond has increased amid the growing possibility of a prolonged crisis due to the spread of COVID-19 variants such as Omicron.

According to the business community on the 21st, Samsung Electronics recently created four new teams in its organizational restructuring to address global supply chain problems. Under the Management Support Office, the 'Supply Chain Insight TF'; under the Smartphone (MX) Division, the 'Procurement Strategy Group'; under the Visual Display (VD) Division, the 'Global Operations Team'; and under the Home Appliances Division, the 'Cost Innovation Task Force (TF)' were established. In addition, the N-ERP system, which handles everything from product orders to delivery in one system, will be further strengthened and introduced to all global subsidiaries starting January next year.

LG Electronics also significantly strengthened its supply chain management (SCM) organizations across its business divisions recently. The Vehicle Components (VS) Division, regarded as LG Electronics' future new growth engine, upgraded its existing SCM Office to SCM Department and assigned an executive-level official to lead this organization. To systematically manage logistics by region, the 'Europe SCM Team' and 'North America & Asia SCM Team' were also created. Furthermore, in response to ongoing semiconductor supply issues throughout this year, the 'Semiconductor Development & Procurement Team' and the 'Semiconductor Supply Response Task Force' were newly established.

The reason both Samsung and LG created supply chain management organizations appears to be due to the continued spread of the Omicron virus, US-China conflicts, logistics crises, and shortages of key components such as semiconductors. The impact of COVID-19 spread this year highlighted supply chain issues, causing disruptions such as the shutdown of factories in Vietnam and logistics delays to the US, which affected major businesses including TVs, home appliances, and smartphones.

A business community official said, "Uncertainty related to this will remain high next year as well, and it is necessary to closely monitor the situation and respond flexibly to changes, so a dedicated organization was needed." He added, "Managing supply chain risks will be directly linked to business performance next year."

This content was produced with the assistance of AI translation services.