Samsonite's Global Supply Chain

BY: JUNYI HUANG ( JASMINE)AMNA ASIFTHI NGOC DIEP NGUYEN ( AMELIA )JIALONG WU (GALLON)HAI YING CHEN ( CAMILLA )HUIQING HUANG ( SANDY )Samsonite's Global Supply Chain

HISTORY Founded in 1910 in Denver, Colorado and headquartered in LuxembourgIn 1963 set up operations in Netherlands, Belgium and MexicoBy 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 ChainGlobal Expansion(Greater market share)

Profit Maximization in the long Run

The Three Supply Chains Over The Years

From Decentralized To CentralizedReduce the warehouse, national warehouse and wholesalers .Build the Central European warehouse.

REASONS:1.Reduction in cost of: inventory carrying cost shipping costlabour cost

2. Reduction in time of transportation

3.Elimination of need to rely on wholesalers From Self-production To OutsourcingSamsonite shutdown several of its plants and decrease internal manufacturingThe 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.

SamsoniteStart:1910 Product:Luggages Hard Soft Supply Chain: Manufacture Distribute Sale Wholesaler Retailer Other producers Partnership Suppliers Apple Start:1976 Product:Computers and other products Supply Chain Design Manufacture Marketing

Department Outsourcing Process Marketing Apple VS Samsonite Common Issues

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 laborChild laborSweat shop conditionsSexual exploitation

Fair Labor AssociationStandardsMonitoring & ReportSupport Compliance

Leather Working GroupEnvironmental compilance

Corporate Social Responsibility

Government & Public

WHAT ARE THE SIMILARITIES AND DIFFERENCES BETWEEN SAMSONITE AND TUMI IN THEIR SUPPLY CHAINS?

Samsonite & TumiTheir supply chains - global scaleSimilarities

Multi-national companies: sell their products worldwide.

Similar distribution channels: wholesale and retail.

DifferencesSamsonite: large scale45,000 points of saleover 100 countries

Tumi: smaller scale1,700 points of saleover 75 countriesSamsonite &TumiTheir supply chains - sale by regionSimilarities

In Asia, China is the major market for growth.DifferencesSamsonite: production focus mainly on the United States, Europe (leading : Germany), India and Mexico.

Tumi: mostly in Asia ( China and Thailand) and the Caribbean

Samsonite & TumiTheir supply chains - product designSimilarities

Both have exclusive stores that sell only their products.Samsonite: BagzoneTumi: local retailerDifferences

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 & TumiTheir Supply Chains - Labour ProtectionSimilaritiesDifferencesTumi: 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.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)

Conclusion Samsonite has grown from a small company to a global multi national company.It caters to each of its markets with personalized products that according to what is demanded in each market.The supply chain has changed from decentralized to centralized production resulting in less confusion in production.Relying more on outsourcing rather than internal production .Both of these changes has resulted in increased sales and revenue reduced many costs.From inception till now simplified production chain and more expansion globally.More profit is produced with increased ease.Thank you for listening!ANY QUESTIONS?