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Samsung will curtail outsourcing

by on30 November 2012

Will sort out the partners it does have

Samsung said that it will continue to limit the amount of suppliers it uses in China and sort out the labour practices of those it does outsource to.

The move follows China Labour Watch (CLW) who discovered that employees at one of Samsung's suppliers sometimes worked up to 16 hours a day, with only one day's rest a month. Mok Jangkyun, who led the team of over 100 auditors to inspect Samsung's 105 suppliers in China said that there was a common use of a system of penalties among Samsung's suppliers in China for being late or producing faulty products, which is improper practice under global standards but somewhat okay under local regulations. Samsung was working with them to change these practices and introduce a better work environment, Mok said.

Samsung has recommended they hire more workers, introduce automation and improve production processes to fix this. We are also working on guidelines to gradually reduce overtime work hours. But the company is unusual in that it has an in-house manufacturing strategy even though it tends to be more expensive than outsourcing.

Samsung manufactures more than 90 percent of its products internally and only relies on contractors for peripheral products such as components, feature phones and handset cases. Mok said it allows the company to adapt quickly to changing market conditions and also means that it does not often get tarred by the Labour scandals which have hit Apple.

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