Samsung recall sheds light on issues in large-scale supply chains

Samsung permanently stopped production on its Galaxy Note 7 smartphone Tuesday after issuing a recall upon reports of the device overheating and catching on fire. The recall, made last month, places a spotlight on supply-chain regulation, leaving the industry to consider whether current technology and management tools can effectively maintain quality control in large-scale supply chain webs, reported The Wall Street Journal.

While Samsung initially blamed the phone issues on bad batteries from a single supplier, similar issues arose even after the company removed the supplier from the production process.

"A design flaw should have been caught during review and testing and this is much harder to do at global scale with multiple suppliers and factories for the same part," said Frank Gillett, a vice president and principal analyst at Forrester Research.

Industry experts said issues in the supply chain can be magnified when there is poor communication between different departments within a corporation and their suppliers, according to Fangruo Chen, a professor at the Columbia Business School in New York City who focuses on supply chain management.

In addition, companies who seek to reduce costs by outsourcing supply chain processes to other countries also risk sacrificing quality, said Timothy Brown, managing director of Georgia Institute of Technology's Supply Chain and Logistics Institute in Atlanta.

While current supply chains may be too large and complex for existing management tools and techniques, the WSJ says a new generation of technology — like cloud-based platforms and virtual reality systems — could offer a solution to the problem.

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