On October 11, 2016, mobile device manufacturer Samsung officially halted production of its Galaxy Note 7 smartphone. This move comes amid reports of the phone's battery causing the device to overheat, catch fire and even explode, which prompted the South Korean manufacturer to issue a recall. The Galaxy Note 7 was released only six weeks before the decision to cease manufacturing, but this short run leaves a lasting impact on the mobile industry.
Details Behind Samsung Galaxy Note 7's Recall
This first report came in August. Almost immediately after Samsung released its flagship phone the big-name manufacturer began receiving reports of the phone becoming dangerously hot. Some of the more extreme events involved the phone exploding. For instance, CNET reported that a man's car caught on fire in Florida because he was charging the Galaxy Note 7 in his vehicle. CNET highlighted an additional story of a man in Australia whose Galaxy Note 7 caught fire in the hotel he was staying at.
According to the New York Times, the manufacturer recalled 2.5 million Galaxy Note 7 devices on September 2, 2016, and both of the aforementioned incidents occurred following this announcement. On this date, Samsung cited faulty lithium-ion batteries as the reason for the issues. Lithium-ion batteries work by moving lithium-ion particles between positive and negative electrodes. The problem is that volatile compounds are needed to make this movement happen, and even a tiny issue - like the "minute flaw" cited by Samsung - can cause the battery to overheat, resulting in fire or explosion.
After that September 2 recall, Samsung issued replacement phones to its customers with batteries from a different supplier, but the same fiery issues occurred again. According to the New York Times, Samsung engineers tried to recreate these explosions and determine the real root of the problem to no avail. As a result, the company permanently ceased production of the Galaxy Note 7.
What Supply Chain Management Teams Can Learn from Note 7 Recall
Many consumers regard the Galaxy Note 7 as the closest competitor to Apple's iPhone. This makes the recall that much more challenging. Samsung needed to maintain its status as a top smartphone manufacturer while still protecting consumer safety. Fortunately, this predicament hasn't deterred all loyal customers. At least that's the mindset of Galaxy Note 7 owner Romesh Wijewardena, according to CNBC.
"I'm loving it," Wijewardena said. "So far, I haven't had any problems with it ... I'm going to keep it. If I have a problem, then I'm going to think about it, and if not, I'm going to keep it."
For supply chain management, this demonstrates the importance of delivering excellent customer experience in every endeavor - not just when the next big product is released. Samsung has built a history of delivering the latest and greatest smartphone, so one recall hasn't totally shattered its reputation.
Boosting Brand Loyalty
But how can those in supply chain management enhance customer satisfaction and build brand loyalty? Brands can start by appealing to customer preferences in supply chain processes, and going green is one way to do this. According to 2014 Nielsen survey, 51 percent of respondents said they would pay a premium price for merchandise from brands committed to environmental change. There is a clear desire for environmentally friendly supply chain processes, and supply chain management can meet this demand with a few simple strategies.
One method is switching to automated data collection. Relying on technology instead of inefficient paper-based processes for tracking products and progress is a business-savvy way to practice conservation. Plus, it speeds processes along, which means companies can get merchandise to customers at a quicker pace, ultimately boosting customer satisfaction.
Supply chain management can also aid in bolstering consumer loyalty with some logistics adjustments. According to a 2016 UPS Pulse of the Online Shopper survey, 65 percent of consumers prefer to receive online orders at their home. Supply chain management may benefit from selecting a logistics partner that offers this capability or reworking strategies to allow for at-home deliveries.
Increase Recall Efficiency
The recall from Samsung also demonstrates the importance of identifying the root cause of a product problem. What was originally thought to be an issue with the lithium-ion battery proved incorrect, leading to lost revenue, greater consumer safety risks and reputation damage. Automated data collection solutions can help with this process, too. Paper-based processes could take weeks to sort through when tracking items, and traceability solutions can make this process more efficient. The faster the supply chain identifies the problem, the less of an impact a recall will have.
Finally, the Samsung Galaxy Note 7 recall shows manufacturers that consumer safety should be the No. 1 priority, even it means stopping the production of a revolutionary product.