Samsung gets great value and benefit from ISO Standards interview with Geesung Choi Samsung Electron

Issue 41 – August 2012

This interview with Geesung Choi, Vice Chairman and CEO of Samsung Electronics Co Ltd, first appeared in ISO Focus+ June 2012. It is summarised here with permission from ISO.

ISO Focus+: Samsung Electronics is certified to ISO 9001 (quality management) and ISO 14001 (environmental management). What benefits have these Standards brought, and can you give us an example or two from your product line?

Geesung Choi: In 1993, Samsung Electronics gained ISO 9001 certification after establishing our quality management system (QMS) to improve customer satisfaction and enhance product quality. Since then, we have continually improved our operations by standardising quality management processes for product development, component purchasing, manufacturing and services, and by monitoring performance.

Samsung's QMS and ISO 9001 certification have greatly improved our operational performance and effectiveness.

Our ISO 14001-certified environmental management system (EMS) is another meaningful benchmark and forms a key part of our eco-management commitment. Based on ISO 14001, our manufacturing-related environmental policies include targets for reducing environmentally hazardous materials and setting out responsibilities for relevant organisations to achieve the targets.

We also provide regular training to ensure continual improvement, rectify problems identified in our periodic inspections, and take measures to prevent recurrences.

ISO Focus+: Your green management plan aims to realise an accident-free, illness-free, and pollution-free workplace and commits you to responsible, green management with eco-innovation throughout product life cycles. How do international Standards help you to meet these goals?

Geesung Choi: Our eco-management framework follows the Plan-Do-Check-Act cycle, which is the guiding principle of ISO 9001. It incorporates our eco-management policies, key performance indicators (KPIs), governance, and detailed action plans for each project. Achievements are monitored and reported to relevant managers.

Our eco-management framework encompasses the product life cycle, business infrastructure, and the workplace environment. It therefore covers everything from pre-manufacture collaboration with component suppliers and post-manufacture logistics, to end-user usage and recycling or waste handling.

The analysis and management of environmental impact through the product life cycle complies with ISO 14040. In accordance with the environmental responsibility principle, we operate an eco-partner scheme to strictly manage hazardous materials in suppliers' components. The life cycle assessment, estimating the environmental impact from components, manufacture to recovery, and recycling, is applied to all products.

Every year we publicly disclose the total annual greenhouse gas emissions from Samsung, our suppliers, logistics, and indirect emissions from the use of our products by end-users. This is based on ISO 14064 (quantification and reporting greenhouse gas emissions and removals) and published in our sustainability report and website.

Samsung gets great value and benefit from ISO standards. We require all worldwide manufacturing facilities to acquire ISO 14001 certification. Eight domestic and 30 global manufacturing sites are ISO 14001-certified and we plan to expand this to other facilities, too.

ISO Focus+: What concrete benefits have ISO international Standards brought Samsung Electronics, and do you participate in their development?

Geesung Choi: As part of our 'Vision 2020' plan [unveiled in late 2009, a plan for Samsung Electronics' evolution over the next 10 years], Samsung aims to generate USD 400 billion of annual revenues and become one of the world's top five brands by 2020. We are exploring new business areas, including environment and healthcare, while expanding our market share in key IT sectors such as smart devices, semiconductors, and digital appliances.

ISO international Standards continue to give us valuable insights to create new businesses, and implementing ISO specifications is a part of building an ecosystem.

In addition, we have been able to come closer to international markets and customers by introducing ISO guidelines regarding product safety and performance, which governments, customers, and industry groups hold in high esteem.

In establishing operational infrastructure and product lines, adopting stringent ISO guidelines – that have proved themselves over many decades – has helped to increase brand value, efficiency, and reliability.

Recognising these benefits, we are participating and contributing to new technology specifications and to guidelines on safety and performance, and methodologies to estimate performance for innovative new solutions.

Importantly for Samsung, ISO's focus on social responsibility, including sustainability and accessibility, aligns closely with our own philosophy. As CEO, I strive to ensure we carry out our social responsibilities and contribute to the betterment of society and our planet.

ISO Focus+: On its 40th anniversary, Samsung announced its aim to be one of the world's top 10 companies by 2020. Please tell us more about your strategy, the driving forces behind it, and the part played by innovation.

Geesung Choi: In late 2009, we unveiled our 'Vision 2020' plan for Samsung Electronics' evolution over the next 10 years. Under this plan, we will introduce new technologies and innovative products and solutions and, therefore, bring prosperity, happiness, and value to our customers and employees.

We aim to continue our growth as a leader in information technology (IT) and to become one of the top 10 global companies. Specifically, our goal is to become one of the world's top five companies by brand value, one of the 10 most admired, and one of the best for environmental performance.

As a global leader, we will be able to attract outstanding talent from around the world.

To achieve these goals, we are transforming our business structure to reflect the changing business environment of the twenty-first century. While maintaining and expanding our leadership in telecommunications, home entertainment, and IT, we have also started to develop 'Lifecare'. This encompasses the medical and healthcare environment, and alternative energy sectors, in which we expect significant growth. We are also continuing to focus on software, services, and solutions to provide an ever-richer experience for users of our digital media and communications devices.

As part of this, our open innovation approach involves collaboration with, and exploring new opportunities with, an array of partners. We are expanding our research and development (R&D) partnerships with leading research institutes while strengthening cooperation with companies in many industries.

ISO Focus+: The digital age has revolutionised business. In a company like Samsung Electronics, whose survival depends on developing the new products and services people need and want, how can you constantly offer innovative and creative products? Is investment in R&D the key?

Geesung Choi: The IT industry continues to undergo dramatic changes. While traditional hardware-centric manufacturers are now less dominant, companies competitive in providing digital content and services are using new business models to lead the market.

To survive and thrive in this dynamic environment, we want to deliver greater value to our customers by building our own rich eco-system and developing strong platforms, as well as emphasising convergence services that differentiate us in the market. We will continue to introduce innovative new products to position Samsung as the pacesetter in the industry, together with customised products and services for regional markets. We have the competitiveness and strategy to succeed by offering our customers value.

Behind our innovative products are our exceptional people and global talent.

Through our marketing and sales subsidiaries, regional headquarters, and global R&D centres, we constantly survey and analyse trends and customer needs in each market, leading us to invest in and fund local projects and academic research programmes. We also listen carefully to experts who have insights into the future.

Samsung invests heavily in R&D: over a quarter of our more than 200 000 employees worldwide are directly involved in developing new products and technologies. We prioritise R&D even in challenging market environments and, between 2005 and 2011 alone, invested USD 43.6 billion in R&D.

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Published in environment.