Samsung Russia: you want cheap automation - do

Expenses on creation of information infrastructure of a new warehouse complex of Samsung Electronics (Samsung Electronics Rus) near Kaluga made only 0.5% of the total cost of the project: $300 thousand at the budget of construction of a complex in $55 million.

Samsung Electronics says that it was succeeded to lower project costs for the account involvement of the uniform Korean contractor. "Everything that was connected with the warehouse project, only one Korean company was engaged. Of course, they employed the Korean contractors and managed to reduce cost to a minimum", - the logistics director of Samsung Electronics Rus Company Yury Kutuzov told TAdviser. According to him, $300 thousand included purchase of licenses ($50 thousand), installation of software and customization ($150 thousand) and also acquisition of hardware ($100 thousand).

Let's remind that construction and automation of the Kaluga warehouse of Samsung Electronics (Samsung Russian Distribution Center) began in July, 2008. The high cost of warehouse lease pushed to construction of own warehouse complex the company. Besides, construction of own plant Samsung Electronics near Kaluga on production of modern LED TVs and 3D LED TVs (it was open in the fall of 2008) therefore the question of the distribution center before the company rose quite sharply at that time was actively conducted.

In a project deliverable of Samsung Russian Distribution Center near Kaluga became the basis for storage of final goods and spare parts for the service centers: its total area is about 112 thousand sq.m., directly a warehouse – 51.3 thousand sq.m., warehouse capacity - 32.7 thousand pallets.

The Korean Samsung of SDS was engaged in creation of an IT part of a new warehouse. As the WMS specialist of Samsung Electronics Rus Company Alexander Trusov told TAdviser, Samsung Electronics Rus Company and Samsung SDS are related, and, besides, Samsung SDS has experience and knowledge of logistics of Samsung. SDS, in turn, invited the Korean consulting company EXE C&T as the supplier of all three solutions (Manhattan Associates WMOS, Yard Management System and Visibility) used in the project.

The CORUS Consulting company acted as the Russian consultant for implementation of Manhattan WMOS, having performed tuning, system testing, user training and development of reports. "It should be noted that in the Korean business it is accepted that the most part of works was undertaken by the Korean companies, especially, when the main customer - such large chaebol as Samsung (chaebol – the large company with family management, a South Korean form of business conglomerate)", - Alexander Rakhmanov, the department director the department director Logistics of Corus Consulting commented.

As a result during the KORUS project tuned up the solution developed by the Korean partners based on Manhattan WMOS and provided user training. The basis of IT infrastructure of a warehouse complex is formed by three mentioned systems connected by the interface with the ERP system of Samsung based on the SAP platform and also with the systems of 3PL-operators. Servers of the warehouse systems are located in uniform data center of Samsung for Europe and the CIS. The warehouse was launched in March, 2009.

As the analyst of Finam Tatyana Menkova commented, "many technical solutions could be proposed by the company Samsung that in many respects determines rather low cost of the project". "But considering that the distribution center works with the same products – namely home appliances and electronics of one producer and also the fact that many project works were performed in Korea before implementation of the project, cost looks quite adequate", - the expert added.

According to the director of logistics of one of the largest Russian WMS integrators who wished to remain not called digit in $300 thousand really "surprising". Samsung will gorge on to return investments within five years due to economy on lease of warehouse spaces and low rates for warehouse processing.