Class Activity 22

Samsonite’s Global Supply Chain

Professor Ignacio Hernández Medina MCP & MID

Instructions
A. Make teams, each one with a laptop.
B. Answer each of the questions that follow in a clear and justified manner.
C. At the end of the class you must upload the activity in Moodle: week 13,
Class Activity 22.
D. Student that does not deliver the activity BEFORE TUESDAY will lose the
participation points of the class.
(EACH DAY OF DELAY YOU WILL LOOSE 10% OF THE GRADE)
Please read the Case and answer the questions:

Samsonite’s Global Supply Chain

Where Samsonite initially operated in Europe, the products that Samsonite sold in
Europe were made at production facilities located in Europe. At the time, six of the
facilities were company owned, and one was a joint venture. In order to serve its
European market, the company maintained subsidiaries and retail outlets, dealing
with distributors and agents. Asia has overtaken Europe in terms of net sales, but
the early experience of Samsonite in Europe has affected its supply chain strategy
worldwide. Originally a U.S. based company Samsonite operates from many
different parts of the world today with its carefully channeled set of strategic
interests. Samsonite’s key strategy in the 90s helped it secure a strong foothold in
the global luggage marketplace. Backed by foreign expansion plans that dot not
just all of Europe but also a growing part of Asia of late, Samsonite serves as a role
model for its effective supply chain organization, warehousing, and distribution
systems.

QUESTIONS

1) What are the major reasons why Samsonite changed its supply chain
organization over the years?

The Reasons for Changes In The Supply Chain

1. Global Expansion(Greater market share)

2. Profit Maximization in the long Run

Samsonite changed 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
3. Elimination of need to rely on wholesalers
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.

2) Compare the supply chain issues faced by Apple in the opening case and
Samsonite in the closing case.

1. Marketing Strategies: Wholesalers, retail stores, and other different channels.

2. Costs: broadly covers operational costs and inventory costs.

3) Why don’t you think Samsonite mentions the California Transparency in Supply
Chains Act, the Fair Labor Association, or the Leather Working Group in its annual
report or on its website? What could pressure Samsonite to address those issues
in the future?

One interesting dimension of Tumi’s supply chain that is totally lacking in

Samsonite’s Annual report is that Tumi has signed the California Transparency in
Supply Chains Act. The law was designed to help eradicate human trafficking and
slavery from supply chains. This also includes forced labor, illegal child labor,
sweat shop conditions, and sexual exploitation.

Tumi adopts a strict policy to enforce its product supply chains, including audits of
suppliers to evaluate supplier compliance with company standards. In addition,
Tumi is a member of the Fair Labor Association as well as the Leather Working
Group, an industry group dedicated to assess compliance and environmental
performance in the leather industry.