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| Chopra
says the company now uses the Net extensively for communication
with vendors and service centres |
Realising
the potential of the Internet, consumer goods major Samsung
India Electronics Limited (SIEL), has not limited its activities
to the mere creation of a website, but has instead used it
a business facilitator. Shipra Arora profiles the initiatives
of the company in this space and finds out how it is using
the medium for brand building as well as customer retention
At
a time when most companies in India are still sceptical about
using the Net, and those that have, have limited it to the
creation of a website which merely serves as an disseminator
of information, Samsung India Electronics Limited (SIEL),
the consumer electronics major, has been one of the trendsetters
in this space. Within a mere three years since commencement
of operations in 1995, the company established its presence
on the Web and has gone from strength to strength to establish
itself as an e-enterprise. Rajesh Chopra, deputy general manager-information
systems, SIEL, points out that the growth of the Internet
in the company took place in two distinct phases, namely e-enabling
and e-enhancing.
Elaborating on the company’s e-business strategy, Chopra
points out that it spans across three areas Business to Business
(B2B), Business to Customer (B2C) and Information Channel
(PR). Both B2B and B2C form the core of its innovative e-marketing
activities apart from tie-ups for brand promotion. The applications
on the B2B front include ‘GLONET’ for its vendors,
‘SERVICENET’ for authorised service centres and
EDI for custom and bank. www.samsungemart.com, the e-commerce
site for its customers forms the B2C part of SIEL’s e-marketing
program. The significant applications under this include Customer
Relationship Management (CRM) and database marketing. The
company’s e-business strategy comes a full circle with
the third angle providing an ‘Information Channel’
through its website www.samsungindia.com with applications
such as Digital World and Call Login.
 Business
to Business (B2B)
Global Logistics Network Systems (GLONET) Vendors: With sourcing
for production being done from both domestic and international
markets, SIEL realised the need for streamlining its processes
with its vendors to lead to more efficient and transparent
functioning. Hence, in 2000, Samsung launched its B2B initiative.
This involved linking the key vendors, which form the bulk
of Samsung’s sourcing (26 domestic and 30 international)
through Samsung’s GLONET. This marked the company’s
first initiative on the B2B front.
Chopra adds that GLONET is being used to effectively purchase
Samsung India’s requirements from its International Procurement
Offices as well as vendors in India. As soon as the purchase
order is raised, it is transmitted to the vendor real-time
as the system is Web-based. The EDI Application extends from
order placement and sharing of the production plan (4 weeks
fixed and 12 weeks rolling production plan) to invoicing.
Account reconciliation with these vendors is also done online.
“The implementation of GLONET has shortened the business
cycle since it has helped us optimise the logistics processes
including Just In Time Delivery (JIT System) and replenishment,”
he explains.
The sharing of planning information and automation of business
process with its vendors has also helped the company reduce
inventory levels and curtail wastage. The purchases from the
Singapore Spare Parts Centre too are done online. In this
way, the GLONET system (an extranet for SIEL) has evolved
beyond being a simple application for business application
transaction with vendors and has become an advanced application
supporting complete business communication between the two
parties. Chopra points out that even communication in terms
of material rejection etc are transmitted to vendors online.
SERVICENET Authorised Service Centres: The next B2B project
on hand for SIEL’s IT department was the automation of
its authorised service centres (ASC). With more that 550 service
centres, the need to connect them was something the company
couldn’t afford to ignore. Accordingly, in 2001, in an
effort to e-enhance the organisation, Samsung India set up
its online B2B application for ASCs called Servicenet. With
this, the entire service and Spares Management of Samsung
India was Web enabled. The system essentially translates into
an entire service network being linked through the Net for
day to day working. Now, with the implementation of Servicenet,
the ASCs are linked with the Regional Parts Distributors and
the CS Head Office through the Internet. This in turn is linked
to Samsung’s South East Asian subsidiaries as it is integrated
at the back-end with SAP R/3 of Samsung India and Samsung
Asia for LPA VISION spare parts Management and automatic planning
of spare parts. Samsung India started using SAP for service
from September 1, 2001.
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Chopra
with the IT team at SEIL
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The
modules in this package include ASC/ASP management, inventory
management, calls management, defect ratio and early warning
signals and technical approval system for field defects. According
to Chopra, at any point of time, when the authorised service
centre logs onto ServiceNet, it can get accurate information
on spares availability, order or follow up on its order for
spares, track warranty claim status and in case of problems,
gain access to Samsung personnel directly. Service manuals
and technical bulletins training material, service related
manuals and other communication material are all available
online, which the service centre can access at the click of
a button. “In this way, service centres are better placed
to respond to customers since Servicenet links ASC with Samsung’s
four regional parts distributors and 15 Gold ASCs,” explains
Chopra.
With Samsung India integrating its spares management operations
with this system, it can now draw spares not just from the
Singapore depot but from any of the other subsidiaries depending
on its need. Based on the spares stocking and consumption
levels at the National Spares Warehouse, which in turn is
linked to the ASCs through Servicenet, the MegaSys system
automatically generates weekly orders to the Singapore regional
depot for spares.
The key benefits of Servicenet include:
a. Transparency in the system since the ASC can check stock
availability in the warehouse of the parts distributor, and
hence need not stock-up unless required.
b. Facility to place orders online with the spares made available
within the next 24 hours
c. Shifting of the Spare Parts Ordering Cycle from a monthly
to a weekly basis and consequent reduction in spares inventory
levels in quantity and amount at ASC by 50 and 35 percent
respectively, assisting in realising better return on investment
and reduced cost.
d. Reduced obsolescence and manual errors.
e. Enhanced efficiency in servicing customers in terms of
spares management.
f. Facilitating much faster and easier communication
e-banking: As part of its e-banking initiative, the company
has automated most of its financial processes and transactions
online. Chopra says, “All applications related to employees
salary such as balance confirmation, reconciliation, accounts
status, collection, withdrawal etc covering the entire gamut
of banking applications have been put online.” In fact,
even account reconciliation with vendors is done online. The
online banking application also covers applications related
to customs in its purview of functioning. To ensure the smooth
functioning of this system, the company has even tied up with
some key bankers.
Information Channel
Though established with the objective of functioning merely
as a website for the company, the portal www.samsungindia.com
now leverages the Net to help in brand building and Customer
Relationship Management (CRM), in addition to serving as a
complete information channel for SIEL. The site is linked
to samsungemart, in order to facilitate online buying, online
call logging for customers to register their calls with the
company, Samsung Digital world, Samsung’s Customer Club
and Samsung Infotainment. The whole idea of creating a new
integrated site is to give Samsung sites across different
subsidiaries a synergy in terms of look and feel and a common
brand feel.
Samsung Digital World (SDW): SDW is one of the key applications
supported by samsungindia.com. According to Chopra, SDW acts
as a tool for facilitating SIEL’s CRM activities. Samsung
India has made a Samsung Customer Club online called ‘Samsung
Digital World’, which represents an initiative to build
and enhance a long-term personalised relationship with Samsung
Customers and reinforce brand loyalty amongst Samsung Product
Owners. “We view Samsung Digital World as a forum for
our exclusive customers to interact with and build a relationship
with the company,” Chopra points out.
To improve the robustness of the applications, Samsung has
built cross links between the different properties on the
website. For instance, customers buying through Samsungemart
can gain automatic access to Samsung Digital World. Says Chopra,
“Since we have integrated the system at the back-end
with SAP, we can even authenticate the serial no of the product
bought by the customer.” Customers who have registered
themselves for Samsung Digital World offline too can check
their point status by logging on to the Samsung website. The
success of the initiative can be gauged from the fact that
in the first six months of its launch itself SDW got over
50,000 Samsung customers as its members.
Online call logging: SIEL introduced its online call logging
facility with a view to better serve its customers. The application
is linked with Servicenet at the back-end to transfer all
their complaints, service requirements such as product demonstrations
etc to the service centres. At the customer end, Samsung customers
can log on to the samsungindia website www.samsung.co/india
for registering their calls and are given a unique call reference
number for tracking their call. For the ASC which gets the
call, it translates into accurate customer call data, thus
making it easier for ASCs to process customer calls leading
to customer satisfaction. According to Chopra, the application
also provides for escalation of calls to the next level if
they are not met with satisfactorily within a specific time
period.
Infotainment: Samsung Infotainment was created as a special
entertainment centre on the Samsung website in August 2001.
Developed with the idea of creating a Fun Zone on the Samsung
website, this section has a mix of games and contests built
around the Samsung Brand. Says Chopra, “The whole idea
behind Infotainment is to create a zone where the Samsung
Customer or a visitor on the website gets a chance to interact
with the brand and also learn something new about Samsung
products, the advertising and even how the technology works.”
Features include information on the company and its products,
working of technologies, articles, contests designed around
products, weekly Quiz and e-Greeting cards. According to Chopra,
the idea is to build the brand value and image through this
channel leading to both offline sales and online sales through
samsungemart.com.
B2C
Samsungemart.com: SIEL launched its B2C e-commerce application
in the year 2000 through its B2C mall, samsungemart.com. Currently,
all products of the company are available through this channel.
According to Chopra, a very minuscule portion of company’s
revenues comes from this channel, with most of the sales being
gifting orders. However, the revenues are enough to sustain
the expenses for maintaining the application. “Even though
the B2C space has not picked up well, an entry into this space
was imminent to prepare ourselves for the future surge in
B2C sales. It is very important to establish and stabilise
our B2C presence by the time this market picks up,” he
adds. However, the company is not just waiting passively for
the market to dictate terms. It is in fact aggressively working
towards increasing its online B2C revenues to contribute about
1-2 percent of its total revenues in the time to come. For
this, the IT team is working on features such as introducing
more transaction security in the site to overcome the biggest
hurdle to B2C in India.
Further, the application also helps the company in online
marketing activities through its massive customer database.
This is being used for promotional activities and direct mailer
marketing. The information in the database is also used for
understanding customer behaviour to build up effective CRM
activities.
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