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Samsonite's Global Supply

Chain
BY: JUNYI HUANG
AMNA ASIF
THI NGOC DIEP NGUYEN
JIALONG WU
HAI YING CHEN
HUIQING HUANG

HISTORY
Founded in 1910 in Denver, Colorado and headquartered in

Luxembourg

In 1963 set up operations in Netherlands, Belgium and Mexico


By the 1960s was manufacturing luggage in Spain and Japan as

well
Also selling luggage worldwide through variety of distributors.

In 1974, first European product was developed the Prestige


attach.
Due to development there was expansion in Italy which caused
it to become one of the biggest markets with demand for
Samsonite.
Decline in U.S. market for demand for hard side luggage in the
1980s.
Although Europe still favored hard side luggage so a new
product called the Oyster case was developed for the
European market.
During the 1990s by purchasing local luggage manufacturers,
Samsonite expanded throughout Eastern Europe.
At the same time there were many joint venture companies
throughout Asia especially in China.

WHAT ARE THE MAJOR


REASONS WHY
SAMSONITE CHANGED
ITS SUPPLY CHAIN
ORGANIZATION OVER
THE YEARS?

The Reasons For Changes In The Supply


Chain
Global Expansion(Greater market share)
Profit Maximization in the long Run

The Three Supply Chains Over The


Years

From Decentralized To Centralized


Reduce the warehouse, national warehouse and wholesalers .
Build the Central European warehouse.

REASONS:
1.Reduction in cost of:
inventory carrying
cost
shipping cost
labour cost
2. Reduction in time of
transportation

From Self-production To Outsourcing

Samsonite shutdown several of its plants and decrease internal manufacturing


The outsourcing suppliers provided finished products or parts.

REASON:
1. Limited manufacturing
capabilities compared to
soaring demand
2.Building more factories
means higher fixed cost, so
increased outsourcing
decreases costs that could
have been spent on a
factory.

COMPARE THE SUPPLY CHAIN


ISSUES OF APPLE WITH THE
SUPPLY CHAIN ISSUES FACED BY
SAMSONITE.

Samsonite
Start:1910

Soft

Product:Luggages

Hard

Supply Chain:

Manufacture
Distribute
Sale
Wholesaler
Retailer
Other producers
Partnership
Suppliers

Apple
Start:1976 Product:Computers and other products
Supply Chain

Design

Department

Manufacture

Outsourcing

Market

Process
Marketing

Apple VS Samsonite
Common Issues
1. Marketing Strategies: Wholesalers, retail
stores, and other different channels.
2. Costs: broadly covers operational costs and
inventory costs.

WHY DOES SAMSONITE


NOT ADDRESS THE
CALIFORNIA
TRANSPARENCY? WHAT
COULD BE DONE TO
ADDRESS THE ISSUES
FACED BY THIS CHOICE IN
THE FUTURE?

California Transparency
Forced labor
Child labor
Sweat shop
conditions
Sexual exploitation

Fair Labor Association


Standards
Monitoring & Report
Support Compliance

Leather Working Group


Environmental
compilance

Corporate Social Responsibility

Government & Public

WHAT ARE THE SIMILARITIES


AND DIFFERENCES BETWEEN
SAMSONITE AND TUMI IN
THEIR SUPPLY CHAINS?

Samsonite & Tumi


Their supply chains - global scale
Similarities
Multi-national companies:
sell their products
worldwide.
Similar distribution
channels: wholesale and
retail.

Differences

Samsonite: large scale


- 45,000 points of sale
- over 100 countries
Tumi: smaller scale
- 1,700 points of sale
- over 75 countries

Samsonite &Tumi
Their supply chains - sale by region
Similarities
In Asia, China is the
major market for
growth.

Differences

Samsonite: production focus


mainly on the United States,
Europe (leading : Germany),
India and Mexico.
Tumi: mostly in Asia ( China
and Thailand) and the
Caribbean

Samsonite & Tumi


Their supply chains - product design
Similarities
Both have exclusive
stores that sell only
their products.
- Samsonite: Bagzone
- Tumi: local retailer

Differences
Samsonite: design facilities in
different countries to fit local
trends. Outsourcing most of their
production to India.
Tumi: designed products in its U.S.
design studios.

Samsonite & Tumi


Their Supply Chains - Labour Protection
Similarities

Differences

Tumi:
- signed the California Transparency
in Supply Chains Act ( eradicate
human trafficking and slavery from
supply chains)
- member of the Fair Labour
Association and the Leather
Working Group.
Samsonite: not included in any of
these above.

HOW WOULD THE SUPPLY


CHAIN BE REPRESENTED TO
REFLECT THE REALITY THAT
SAMSONITE IS A GLOBAL
COMPANY?

Samsonites Global Supply Chain


Samsonite entered into subcontract agreements in
Asia and Eastern Europe for globalization.
The subcontractors provided both final products and
subassemblies.
In 2007, it has shut down several of its plants in
Europe and decreased internal manufacturing of soft
side luggage from 23 percent in 2004 to under 10
percent in 2007.It sources 90 percent of soft-sided
luggage from third party manufacturers to
consolidate its manufacturing capacities and to
reduce cost.

Samsonite is organized along regional line, with


president in charge of each region.
It has developed strong relationship with its
suppliers. It purchased 10.8 percent of its
products from its largest suppliers, and the five
largest supply 35.2 percent of the products to
Samsonite. (e.g. Ramesh Dungarmal Tainwala in
India)

Thank you for listening!


ANY QUESTIONS?