In the early September, Samsung issued a safety recall for Galaxy Note 7 in response to the reported incidences of exploding phones. Consumers can chose either to exchange for another Samsung model with 100 dollar credits as a gift, or switch to other brand with 25 dollar credits. Samsung also decided to stop manufacturing this model. This decision, without doubt, has triggered a series of countermeasures within Samsung’s global organizations.
The first functional department that has direct impact is the fulfillment department. They now have to estimate the number of returns and exchanges, report customer credits to accounting department, order and distribute other models to make sure that consumers can get their new phones as soon as possible. They might not need to check the condition of each returned phones because the policy is to end this product. Accounting department also takes a good hit. They need to keep track of the gifted credits, record sales returns, update allowance accounts, etc.
On the other hand, project systems, production and procurement process might have suffered less. However, since Galaxy Note 7 is discontinued, the project team will also be closed or reassigned. Production and procurement start to alter/improve/adjust original plans. Production might want to improve quality assurance in the manufacturing process of the next flagship model. Procurement department will need to review battery vendors and their quotation for better materials procurement.
This recall costs Samsung at least $5.3 billion, according to USA TODAY. Besides the fact that Samsung employees now have lots of extra work, I’d say this is a good call. It takes time and money to build a brand with a good name. (Just think about all the advertisement time in football/baseball seasons, that is not a small amount.) What’s more terrifying is that, they finally finish the integration of mobile phone supply chain. If their phones stop selling, all will be gone and Samsung will be pushed back to manufacturing. That is the last thing we, Samsung and the market, want to see.