Samsung 2001 Annual Report Download - page 43

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Cost Reduction >>In good economic times, the ability to consistently sharpen cost competitiveness is the difference between
being an industry leader and being a distant follower. In tough times, it is the difference between staying in the black and bleed-
ing red. Our 2001 financial performance illustrates this perfectly in that our systematic cost-reduction strategy was essen-
tial to our posting of a 2,295.3 billion won operating profit for the year.
We used open bidding, vendor negotiations, and global sourcing to cut materials costs by 3,600 billion won, a remarkable
50% reduction over 2000. Process optimizations and a 23% rise in employee productivity at our Korean production facilities
helped us save another 1,344.3 billion won in manufacturing and assembly costs, a 55% year-on-year improvement. And
since there are limits on how low materials prices can go, our cost-reduction strategy continues to become increasingly
sophisticated and holistic, using methodologies like total cost management and value engineering in product development and
materials cost management in production to keep our competitive edge as sharp as possible.
Sharpening competitiveness
for profitability
⇢
Oct 31 Annual TFT-LCD monitor sales pass 2 million units Nov 6 Integer Hong Kong Pavilion featuring Home Vita network solution opens 41