Samyeong Cable Company

Introduction

Samyeong Cable Company is a company based in Songdong Ku, Seoul that produces control cables, speedometer cables and filter elements for motor vehicles. They supply parts mostly to Hyundai Motor Company, a leading car manufacturer also based in Korea. The CEO of Hyundai Motor Company, President Park believes that the suppliers' role was the most important factor in alleviating the inferiority of Korean firm in the world market and the key to achieving world class success through competitiveness. In order to cultivate this competitiveness, Hyundai runs an appraisal of its suppliers by evaluating their supply chain management, helping these suppliers improve their operations and selecting those firms that meet Hyundai's criteria of capability and performance to compete in the world market.

Problem

Samyeong, as one of the major suppliers of Hyundai for control cables and subject to their selection process, are pressured to make major changes in the area of cost, quality and, productivity.

In order to meet Hyundai's selection criteria, Samyeong must have a responsive supply chain which focuses on innovative products and stable processes. Responsiveness and flexibility to rapid design changes in production of automotive cables that will cater to Hyundai's criteria of high technological capacity are strategies that they must adopt.

2. How did Hyundai measure its suppliers' capability? How did Hyundai

assist in developing suppliers' capabilities?

Hyundai measures its suppliers' capability in the areas of delivery reliability, cost, quality and flexibility with deliver reliability as the most important factor. After evaluating, they produce a supplier report with the following criteria: Managerial (20%), Technological Development (25%), Production Management (25%), quality management (25%) and Incentives (for having patents, 100ppm, ISO, and exports) (5%). With reference to this supplier report, Hyundai classifies the supplier into five groups: A, B1, B2, C and D with the A and B groups autonomously managed and supported (The suppliers aim