“ Samsung Experience In Managing Innovation ”

A Presentation To Malaysia Productivity Corporation “Samsung ExperienceIn Managing Innovation” Presented By Andrew George Senior Manager Samsung Electronics Display (M) Sdn Bhd 29th July 2010 hg.andrew@samsung.com andrew.hng@gmail.com

CONTENTS • Samsung Electronics Display – Plant Location. • Samsung Complex. • The Need For Survival. • Think New – Create Future. • Benchmarking - Structure. • Benchmarking - Methodology • Be The Driver. • Strategic Execution - PDCA • KPI – The “SMART” Approach. • Drilling Down With 6 Sigma Tools. • Drilling Down Further. • The Birth Of CELL TV Lines – Innovation Begins. • Venturing Into Employees Potential. • Recognizing Employees Multi Skills. • Empowering Employees – Three Levels. • The Need For Re-Emerging. • 2005 ~ 2007 TV Cell Lines Transformation. • 2008 ~ 2010 TV Cell Lines Transformation. • Low Cost Intelligence Automation. (LCIA)

1. Samsung Electronics Display - Plant Location Samsung Electronics Display Tuanku Jaafar Industrial Area, Seremban, Negeri Sembilan Darul Khusus Location Land area 40,200 m², Built up 31,800 m² Area

Samsung Hostel Samsung Corning Samsung Electronics Display Samsung SDI Established Plant Employee Product 1995 SDMA 791 1992 SCM 613 1990 SDI 2251 2. Samsung Complex Monitor, LCD TV, PDP, LED TV Glass Panel, Funnel CRT, CPT

3. The Need For Survival The Voice Of Customer Cost Unit Unit Quality Delivery Cost Cost Economic Risk Missed Sales Inflation Logistics Management Skills Inventory Costs Service Levels Lead Time Currency Risk Proximity to Customers Technology Progress Think New - Create Future Driving Top-of-Class Leadership from Asia

4. Think New – Create Future Creation An Original Product of Human Invention Innovate Improving Existing Performance By 50 % Improve Raising to a More Desirable & Excellent Condition by 30 %

5. Benchmarking - Structure Benchmarking is organized to provide a chance to learn the insights of Global Leading Company’s Best Practices and to motivate towards applying practically what have been learned with a proactive mindset. Culture of Change & Innovation The Goal of Benchmarking Changing Mindset & Developing New Innovation Tools Benchmarking Assignment Waste Elimination Small Group Activity Human Resource Development Theme of Benchmarking Visual Factory Management Productivity Improvement Tools Success Stories

6. Benchmarking - Methodology People can be Motivated to Change and Innovate through Benchmarking through seeing the Best Practices Developing Innovation Leaders • Kaizen Mindset & Motivated. • Ability To Detect Wastages. • Develop Practical Leadership. People Company Culture Process & Systems • Adaptable To Changes. • Culture of Continuous Improvement. • Mutual Trust & Respect • Maximize Value Added Operations. • Flexible Workforce. • Utilizing Innovation Tools

7. Be The Driver • Focus in Core Business Venture • Entrepreneurship In Business Handling • Constant Change In Business Environment DRIVE FOCUSING ONE DIRECTION Acknowledging & Practicing BACK TO BASIC CONCEPTS CHANGE BEGINS WITH ME Understanding Current Situations Realization Of Past Behaviors & Attitudes The Need For Change

8. Strategic Execution - PDCA Define Subject Statement Understand Current Situation Identify Root Cause Action Plan Plan Improvement Continual Improvement Execute Improvement Check Do Confirm & Monitor Results Standardized Improvement Work on Remaining Issues & Future Extension Plan

9. KPI – The SMART Approach The ‘ SMART ’ Approach - In Key Performance Indices Key Performance Index S pecific M easurable A chievable R ealistic T ime Base Through Team Work & People Empowerment

10. Drilling Down With 6 Sigma Tools “DMAIC” Productivity Innovation Internal Value Creation Quality Innovation Cost Innovation In-Bound Supply Chain Management (SCM) Innovation Supplier Innovation Incoming Quality Excellence

11. Drilling Down Further 1. Cell Line Productivity Innovation 2. Semi Finish Product Productivity Innovation Productivity Innovation I. 1. Implementation Defect Free Line 2. Field Defect Reduction 3. New Model Quality Stabilization Quality Innovation II. Value Creation 1. Material Cost Reduction 2. Logistics Cost Saving 3. Cost Saving Through Reduce , Reuse & Recycle Cost Innovation III. 1. On Time Production Improvement 2. Internal Logistics Improvement 3. Material Delivery Performance Operation SCM Innovation IV.

12. The Birth of Cell TV Lines – Innovation Begins 2010 100% Cell Production Towards 106 sets per man 2009 Dismantled All Conveyor Lines & 95% Cell Production 2008 [3rd] Introduced “ACE Cell” Concept 2007 [2nd] Introduced “Cells Grouping” 2005 [1st]Introduced “Cell System” Cell Production % Productivity (UPM) 106 units 72 95.0% 100% 48 [3rd] 40 93.4% [2nd] 37 70.7% 30 [1st] 16% 0.6% ’06 ’05 ’07 ’08 ’09 ’10 ’05 ’06 ’07 ’08 ’09 ’10 Target

13. Venturing Into Employees Potential Cell Operator Certification Basic Theory Training On Job Training Individual Evaluation No ≥ Passing Point Yes Certification Level Upgrading

14. Recognizing Employees Multi Skills Introduction Of Cell Incentive & Allowance.

15. Empowering Employees – Three Levels Degree of Empowerment & Leadership Enabling employees to establish Decisions with minimum Reference to higher authority. Involving employees in Acquiring Responsibilities for Improving the way things are done. • Understanding Customers Needs. • Strengthening Delivery. • Innovating Continuously. • Increasing Productivity. • Gaining The Competitive Edge. Encouraging Employees to Participate in Active Role in their work Organizational Benefits KEY WORD – “SPEED” - The DIGITAL GENERATION

16. The Need For Re-Emerging Role of Employees - Mindset GOAL Total Prevention - Waste Elimination Build To Order - Pull Production Voice Of Customer Management Total Quality Control 5S Activities Total Productive Maintenance Through Innovation Push Production Benchmark Data Task - Oriented

17. 2005 ~ 2007 TV Cell Lines - Transformation 2006 ~ 2007 2005

18. 2008 ~ 2010 TV Cell Lines - Transformation 2009 ~ 2010 2008

VISION 19. Low Cost Intelligence Automation Customer Satisfaction Cost Quality Delivery Driving Top-Of-Class Leadership In Asia "Implementing Low Cost Intelligence Automation"

Objective : The World Best Manufacturer In Innovation, Quality & Productivity Terima Kasih

“ Samsung Experience In Managing Innovation ”