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Since the 1990s businesses have recognized the value of supply chain management (SCM) not just to their supply chains, but other parts of their operations where the same principles can be adapted and applied. This has led to several innovations and radical success stories, while at the same time Motorola's six sigma approach has revolutionized many businesses in Asia following its success in the US in the late 1980s. Asian companies have also innovated along six sigma principles, so what would happen when one of the biggest Asian electronic goods manufacturers got serious about both six sigma and SCM?
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Although it has its origins just before the second world war, Samsung is best known for its rapid growth in the 1990s to become one of the major players in the manufacture of cell phones, televisions and other audio-visual equipment. In 2006 it had revenues of almost $64 billion and net profits of $8.6 billion. Part of the success in the 1990s can be attributed to its adoption of six sigma management principles in the early part of the decade, although the company was never satisfied that all the defects it could eradicate from its systems had been.
This dissatisfaction in six sigma areas and in its supply chain led Samsung to look at a combined approach with the two processes to develop a methodology that would enhance its now global operations. This idea was based on four elements that the Samsung management thought were key to growing the business efficiently:
Discipline . The...