• Journal of Korean Institute of Industrial Engineers
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• v.32 no.4
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• pp.323-337
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• 2006

Samsung, recognized as a global leading company, has huge and complex supply chain structures and has been improving them continuously for its fast-growing global businesses. SCM 6 Sigma is the state-of-the-art methodology developed through a combination of SCM innovation concepts accumulated from SCM Business Group in Samsung SDS and 6 Sigma which has successfully settled down as the management innovation tool for many companies in Samsung. The ultimate goal of SCM 6 Sigma is to train and develop future supply chain leaders who are more capable of leading SCM innovations. By leveraging the established 6 Sigma Belt System, Samsung aims to alleviate a shortage of SCM talents that has been a bottleneck in improving SCM performances at its group companies. This explains why SCM 6 Sigma is created. SCM 6 Sigma is the unique and critical component for Samsung to implement its various strategies for continuous improvement of its operations at a higher level of effectiveness and systematically as well. In return on these efforts, many SCM innovation projects have been successfully executed through SCM 6 Sigma up to today. In this paper, we introduce the methodology and explain the business rationale behind it together with its deployment case.

• Proceedings of the Korean Society for Quality Management Conference
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• 2004.04a
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• pp.166-172
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• 2004

• Journal of Distribution Science
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• v.13 no.11
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• pp.123-130
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• 2015

Purpose - Due to highly elevated levels of competition, many companies today have to face the problem of decreasing profits even when their actual sales volume is increasing. This is a common phenomenon that is seen occurring among companies that focus heavily on quantitative growth rather than qualitative growth. These two aspects of growth should be well balanced for a company to create a sustainable business model. For supply chain management (SCM) planners, the optimized, quantified flow of resources used to be of major interest for decades. However, this trend is rapidly changing so that managers can put the appropriate balance between sales volume and sales quality, which can be evaluated from the profit margin. Profit optimization is a methodology for companies to use to achieve solutions focused more on profitability than sales volume. In this study, we attempt to provide executional insight for companies considering implementation of the profit optimization system to enhance their business profitability. Research design, data, and methodology - In this study, we present a comprehensive explanation of the subject of profit optimization, including the fundamental concepts, the most common profit optimization logic algorithm -linear programming -the business functional scope of the profit optimization system, major key success factors for implementing the profit optimization system at a business organization, and weekly level detailed business processes to actively manage effective system performance in achieving the goals of the system. Additionally, for the purpose of providing more realistic and practical information, we carefully investigate a profit optimization system implementation case study project fulfilled for company S. The project duration was about eight months, with four full-time system development consultants deployed for the period. To guarantee the project's success, the organization adopted a proven system implementation methodology, supply chain management (SCM) six-sigma. SCM six-sigma was originally developed by a group of talented consultants within Samsung SDS through focused efforts and investment in synthesizing SCM and six-sigma to improve and innovate their SCM operations across the entire Samsung Organization. Results - Profit optimization can enable a company to create sales and production plans focused on more profitable products and customers, resulting in sustainable growth. In this study, we explain the concept of profit optimization and prerequisites for successful implementation of the system. Furthermore, the efficient way of system security administration, one of the hottest topics today, is also addressed. Conclusion - This case study can benefit numerous companies that are eagerly searching for ways to break-through current profitability levels. We cannot guarantee that the decision to deploy the profit optimization system will bring success, but we can guarantee that with the help of our study, companies trying to implement profit optimization systems can minimize various possible risks across various system implementation phases. The actual system implementation case of the profit optimization project at company S introduced here can provide valuable lessons for both business organizations and research communities.