samsung galaxy note 7 failure case study

Samsung Note 7 Failure Case Study

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Introduction

Conclusions.

In August 2016, several Samsung Galaxy Note 7 Smartphones were reported to explode. The manufacturer called upon its engineers hurriedly to diagnose the source of the problem. The initial report pointed to a fault in batteries procured from one of the suppliers. This led to a recall of these smartphones and continued shipping of the same mobile device with batteries from a different supplier [1]. However, the issue surfaced again with reports of the new replacements also exploding, prompting the company to halt the entire Samsung Galaxy Note 7 production. The failure, subsequent recall, and the complete halt of the Galaxy Note 7 production have had social and legal ramifications.

This Samsung Galaxy Note 7 Failure case study aims to analyze the issue, its history, and the aftermath, including the crisis management and the discovered reasons behind the battery explosion.

Smartphones have very advanced computing capabilities, such as high-definition cameras, media players, sensors, GPS navigation units, accelerometers, and gyroscopes, among other features. For most Smartphones, an Android operating system is used. The features need to be supported by stable memory, batteries with the correct power output, an efficient power system, and a good shell to operate efficiently. The risk of failure of Smartphones is mainly in the memory access violation and mobile phone hardware such as the batteries and the shell [2]. Overall, studies on the failure of Smartphones have pointed to two major types of failures, i.e., accidental or malfunction of the software or Android. For this report, the focus is on the hardware or software malfunction.

Samsung Galaxy Note 7 Failure

The explosion of the Samsung Galaxy Note 7 resulted in the recall of the phones [1]. The phones that were overheating were analyzed to establish the causes of the explosion. The techniques employed for the analysis were Failure Mode and Effect Analysis (FMEA). This entails a critical analysis of the entire lifecycle of a product. It analyzes the specifications of the design, operation, and maintenance by establishing the system functions, identification of the failure modes in the system, and functions which then determine the effects and possible causes [3]. The analysis covers both the software and hardware functionalities.

The FMEA is used by engineers in the design stages of a product or post-analysis in the case of issues arising. The initial FMEA conducted after the failure was hardware FMEA. This is a straightforward analysis guided by the understanding that mechanical, electronic, and electrical failures happen due to some issues, such as unanticipated stress, overload, and faulty wiring. The analysis by the engineers concluded that lithium-ion batteries from one of the suppliers had a fault. Part of the battery’s inside was coiled incorrectly, causing stress to the battery.

By performing critical risk analysis, the possible malfunction of software or hardware can be established before the product is launched into the market. The critical failure modes can be ascertained by calculating the Risk Priority Numbers (RPN) through brainstorming [2]. This helps to establish the potential areas of failure and the possible degree of damage. As a result, mitigation measures are taken before the product is released to ensure that the risk is contained.

It is thus paramount that Samsung should have carried out a thorough risk analysis for all the hardware and software from the suppliers before launching the product. Also, after the recall, the analysis was hurriedly carried out; hence, the conclusion that the failure was from a battery procured from a particular manufacturer was theorized rather than being scientifically proven with quantifiable data.

Discussion on Samsung Note 7 Failure

The failure of Samsung’s Galaxy Note 7 has had enormous financial implications. It is estimated that it may lead to a revenue loss of over $ 5 billion. Even though the company could easily deal with the loss of income, the failure has great social and legal ramifications. For instance, the failure has already attracted class-action lawsuits against the company, which touch on how the recall and replacement were carried out.

Also, there is a high likelihood of lawsuits that relate to the damages and injuries caused by the explosions. These lawsuits will affect the consumer perception of Samsung’s Smartphones. For example, the Google search for ‘Samsung Explosion’ spiked in August and September despite the recall being only for Galaxy Note 7. The failure has also had social implications for Samsung phone users. Some airlines in the U.S. do not allow passengers to use any Samsung phone onboard their planes.

The failure of any product leads to unintended consequences for the manufacturer and the consumers. Even though investigations are still ongoing to establish the exact cause of the Samsung Note 7 explosions, Samsung’s engineers need to give more care to the materials used to develop the software and hardware of its Smartphones. Also, there should be a critical risk analysis in which an RPN for each possible failure mode is calculated before a product is released to the market. This will ensure that parameters with high-risk factors are properly investigated, and risk reduction measures are taken in advance.

• B. Chen and C. Sang-Hun, “Why Samsung Abandoned Its Galaxy Note 7 Flagship Phone”, The New YorK Times, 2016.
• K. Krishnakanth and P. Kavipriya, “Android application development for environment monitoring using Smartphones”, International journal of Mobile Network Communications & Telematics, vol . 3, no. 3, pp. 41-45, 2013.
• S. Malek, R. Roshandel, D. Kilgore and I. Elhag, “Improving the reliability of mobile software systems through continuous analysis and proactive reconfiguration,” Proceedings of the 31st International Conference on Software Engineering-Companion Volume. ICSE-Companion 2009. Vancouver, BC, Canada, pp. 275-278, 2009.
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IvyPanda. (2020, October 9). Samsung Note 7 Failure Case Study. https://ivypanda.com/essays/failure-analysis-samsung-galaxy-note-7/

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IvyPanda . 2020. "Samsung Note 7 Failure Case Study." October 9, 2020. https://ivypanda.com/essays/failure-analysis-samsung-galaxy-note-7/.

1. IvyPanda . "Samsung Note 7 Failure Case Study." October 9, 2020. https://ivypanda.com/essays/failure-analysis-samsung-galaxy-note-7/.

Bibliography

IvyPanda . "Samsung Note 7 Failure Case Study." October 9, 2020. https://ivypanda.com/essays/failure-analysis-samsung-galaxy-note-7/.

• Smartphones

A Brief History of Samsung’s Troubled Galaxy Note 7 Smartphone

S amsung Electronics announced Tuesday that it’s stopping production of its Galaxy Note 7 smartphones, less than 24 hours after halting global sales of the device.

“(We) have decided to halt production and sales of the Galaxy Note 7 in order to consider our consumers’ safety first and foremost,” the South Korean firm wrote in a filing to the Seoul stock exchange, Reuters reports. (The Note 7 is essentially the larger version of the Galaxy S7, which hasn’t been affected by the problems plaguing the Note 7.)

But why is Samsung ending production of its popular smartphone less than two months after it launched? Here’s a brief recap:

The Note 7 launches on Aug. 19

The latest of Samsung’s large-screened, stylus-toting Android smartphones launches on August 19. TIME describes it as “a modest but welcome improvement over its predecessor, offering a more ergonomic design, an enhanced stylus, the same camera as its Galaxy S7 cousin, and some software tweaks” and awards it 4.5 out of 5 stars. (We have since rescinded our recommendation in light of the recall.)

It costs around $30 per month, or more than $800 without a payment plan, depending on the wireless carrier.

Reports begin circulating about devices catching fire

Tales of Note 7 devices catching fire begin to spread. Samsung receives 92 reports of batteries overheating in Galaxy Note 7 phones in the U.S.; it says there were 26 reports of burns and 55 reports of property damage. A man in Florida says his vehicle caught fire when the Galaxy Note 7 smartphone charging inside his SUV burst into flames.

The world’s three largest carriers by passenger traffic, American Airlines , Delta Air Lines and United Airlines, say that employees will tell passengers at the gate and on board aircraft to keep the Note 7 switched off until they deplane.

Phones recalled and replacements shipped

In early Sept., Samsung stops selling the Note 7. The U.S. Consumer Product Safety Commission (CPSC) warns users to power down their devices and stop using them. It also issues a voluntary recall of devices sold before Sept. 15.

In total, Samsung recalls 2.5 million of the new Notes across 10 worldwide markets, including one million in the U.S. More than 500,000 replacement units of the device are shipped to carrier and retail stores in the U.S.

A software update is also launched for the Note 7 to help owners distinguish whether or not their smartphone is included in the recall. The software displays a green battery icon in the phone’s status bar to indicate whether or not the phone has been affected.

The Journal reports that about 60% of the affected Notes in the U.S. and Korea have been replaced, with about 90% of customers choosing to replace the faulty phone with a new Galaxy Note 7 rather than get a refund or trade it in for a different type of phone.

Samsung’s market value drops

Samsung’s market value begins to plummet as shares fall to their lowest level in nearly two months on Sept. 12. Investors wipe 15.9 trillion won ($14.3 billion) off the South Korean firm’s market capitalization as a series of warnings from regulators and airlines around the world raised fears for the future of the device.

“Some said initially the Galaxy Note 7 could be the best smartphone ever, but now it’s possible the phone will go down as the worst ever,” IBK Securities analyst Lee Seung-woo says, predicting weak sales in the fourth quarter.

Analysts say the recall could have a lasting impact on the $211 billion company’s brand image, which could derail a recovery in its smartphone market share against rivals like Apple Inc. Some estimate the firm might lose $5 billion won worth of revenue after accounting for recall costs.

New reports suggest replacement phones are also catching fire

On Oct. 9, Samsung stops exchanging recalled Note 7 devices due to reports of replacement phones catching fire , just as the original phones did.

The week before, a Southwest Airlines flight is evacuated because of a phone that is smoking and making “popping” noises after it is turned off. Meanwhile, the Journal cites two users in California who each received a replacement Galaxy Note 7 only to discover that they became very hot.

In a statement, Samsung tells the Journal that “temperature fluctuations” could occur and weren’t a safety risk, although it did say it was resolving individual cases with customers who had issues with their replacement devices.

Mobile providers T-Mobile , AT&T , and Verizon halt sales and exchanges, Business Insider reports. “We’re no longer exchanging new Note 7s at this time, pending further investigation of these reported incidents,” A&T says in a statement. Instead, customers are allowed to exchange the phones for a different model.

Samsung announces it has stopped production of the Galaxy Note 7

In a regulatory filing Tuesday, Samsung announces that it has made a final decision to stop production “in order to consider . . . consumers’ safety first and foremost”. It could be one of the costliest product safety failures in the history of technology.

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Samsung’s Exploding Galaxy Note 7: A Case Study In How Not To Release A Smartphone

By Xavier Harding

Posted on Oct 11, 2016 9:22 PM EDT

4 minute read

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The Galaxy Note 7 was meant to serve as Samsung’s best 5.7-inch, stylus-wielding smartphone. Introduced in August to great fanfare, the new Note device not only offered Samsung users an updated smartphone option, it also served as a way to tide over customers until the presumed Galaxy S8 in March 2017. At least that was the plan, until Samsung’s Galaxy Note 7 began to catch fire while plugged in to charge. Now Samsung has chosen to cease production on the Note 7 line until further notice.

Lithium-ion batteries, like the ones commonly found in smartphones, laptops and more, have been known to catch fire in the past. Laptops from Sony went through a similar flaming bout in 2014, as did various hoverboards more recently. As to why these batteries continue to explode, you’ll want to check out our explainer on the matter.

Samsung’s halt on production of the Note 7 could mean bad news for the company, especially at a time when Apple just released its new iPhone and Google finally announced its official phone. Indeed, the Note 7 has been a disaster from almost the very beginning…

Warm Reviews

The Samsung Galaxy Note 7 was well received amongst reviewers of the device. Wired , The Verge , Time , and more sang the device’s praises. It even initially earned a Mashable Choice Award , which the publication later retracted . Because then…

Initial Reports Of Combustion

The first set of Note 7 battery explosions were reported in late August, less than a month after the device came out. On August 24 , a Samsung Galaxy Note 7 device exploded while connected to its charging cable. Similar reports began to emerge following the first.

Shipment Delays And Official Worldwide Recall

Samsung then chose to delay shipments of the Note 7 “for quality control testing,” according to Reuters. (It was also at this point that the company asked Popular Science to send our review unit back.)

Samsung followed up by issuing an official worldwide recall of the Galaxy Note 7 in early September. While this spelled bad news for Samsung, it was only the beginning.

The Good Batch

After the recall, Samsung instituted an exchange program . Users of the first round of Note 7 phones could trade it in for an updated Note 7 or one of Samsung’s Galaxy S7 or S7 Edge phones. Those getting another Note 7 could tell which set the phone belonged to by looking for a black square on the bottom of the box near the product’s info.

One would assume that Samsung’s second set of Galaxy Note 7 devices would be better equipped to avoid catching on fire. But we all know what happens when you assume.

Southwest Airlines Mishap

Southwest Airlines Flight 994 was evacuated before take off as a response to a replacement Note 7 that went up in smoke, leading the FAA to warn against using the device on planes … but not before another replacement Note 7 would catch fire in a Kentucky home .

The Note 7 Is No More

Which leads us to today, where Samsung has ceased production of the Note 7. Launched on August 19 and killed off on October 11, the phone lasted just two months on the market.

Having a phone explode because of charging troubles is one thing. But Samsung offering an explosive replacement leads to even more trouble for the company.

The Lasting Effects On Samsung

Of all the Android hardware makers, Samsung has enjoyed the top spot for quite a while. The devices sell well and many see the smartphone race not as Apple versus Google, but Apple versus Samsung. But repeated offenses when it comes to phones catching fire could change that. While Samsung is haphazardly spraying the fire extinguisher, Apple’s new phone is looking better than ever and Google finally released its official Android phone . Even without a headphone jack, the iPhone 7 will sell well, like the iPhones before it. And depending on how Google markets its Pixel phone, the search company could swipe some market share from Samsung.

And that’s not all of the company’s troubles. Samsung and Apple will meet in the Supreme Court starting today in a continuing battle over allegedly infringed design patents. Apple initially sued Samsung in 2012 , claiming that many of the icons and slide-to-unlock behavior belonged to Cupertino. Their first time in court, Samsung lost over $1 billion , although they later won an appeal for $120 million , which staved off some of the cost.

The odds are against Samsung, but it will be interesting to see how the South Korean hardware maker can come back from this (if at all). Without the Note 7, Samsung won’t have an up-to-date phone to offer its users until 2017, when the Galaxy S8 eventually arrives. Offering an amazing new device could sway users back, but Samsung will have to go out of its way to prove that the device won’t catch on fire. Or make the device fireproof, which would be impressive in its own right.

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From a 'cultural meme' to a comeback kid: How Samsung overcame its Galaxy Note 7 fiasco

• The company managed to pull the feat by holding itself accountable, getting to the root of the cause and then communicating that effectively to its employees and consumers.
• It also used the opportunity to find a bigger brand purpose for itself and creating an internal culture of change that encourages and prides itself on taking risks.

In 2016, Samsung was blowing up — quite literally.

The phone maker was battling its biggest ever brand crisis, after defective Galaxy Note 7 smartphones began exploding around the world . A battery malfunction was threatening to permanently damage both its business and its reputation: its mobile sales were down 15% by October 2016 .

"We became a cultural meme, a daily announcement on every flight," said Pio Schunker, svp of integrated marketing communications at Samsung Mobile Communication, speaking at the Association of National Advertisers' Masters of Marketing Conference on Thursday. "There was wave after wave of negative commentary — not just from the press, but from consumers as well."

But a year later, the South Korean company seems to be on the path to a full recovery. Just last week, it went up from the seventh to the sixth position in the marketing consulting group Interbrand's 2017  Best Global Brands list , and saw a 9% increase in brand valuation despite the crisis. Samsungs's profits are up in 2017 and its new Galaxy 8 has been selling well, according to Marketwatch.

Here's how Samsung managed to pull its comeback:

By embracing accountability

When disaster struck, Samsung knew that it had to be proactive and take responsibility, according to Schunker.

"We knew we couldn’t afford the luxury of a fetal position and just lie there, so the first thing that we did to make things right was to take accountability," he said. "For Samsung, it wasn’t just the right thing to do, it was the only thing to do."

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The company promptly held a press conference, in which it took full responsibility for the crisis. It was also forthcoming in its admission that while it didn’t know what was causing the battery   malfunction, it would not rest until the actual cause was discovered. 

The company then moved into decisive and meaningful action, getting 700 researchers and engineers, 200,000 phones and over 30,000 batteries tested in every extreme condition possible. In a company first, Samsung also opened up to third party auditors.

When Samsung eventually figured out what exactly had gone wrong, it communicated that out to the public. In January, it announced a quality assurance program and other safety features, including an 8-point battery safety check, rolling them out the very next day.

By building 'brand love'

Once the issue at hand was addressed, Samsung turned its attention towards recovering people's love and trust. It focused on finding a bigger purpose that both its employees and consumers could rally around, made its brand more inclusive globally and tried to create an internal culture of change.

" This time the stakes were much higher, because we not only had to recover from all the damage that had been done, but do it during one of the most competitive smartphone launch seasons we’d ever seen in advance of the S8 launch," he said. "We needed to reclaim our leadership."

The brand sought to break away from its "immensely fragmented brand identity which l acked warmth and humanity," and instead  inspire purpose beyond just its bottomline. It tapped into its inherent DNA of relentless innovation, crystallizing that into a bigger brand purpose encapsulated in the tagline " Do What You Can’t.”

Bringing all its regions and markets together around a common vision ended up propelling the brand even further. 

"The brand focus was incredibly empowering, helping in creating great work and scaling up the brand faster than HQ initiative could have done," he said. 

By relying on its partners

Social media 'war rooms' — where brand and agency teams coalesced to take on tentpole events on social media in real time — may be a thing of the past. But desperate times call for desperate measures, as was Samsung's case when its phone scandal broke out last year.

According to Schunker, Samsung and its agencies set up a war room in the immediate aftermath of the crisis, monitoring media reports and consumer sentiment online day in and day out to make sure everyone was on the same page and up to speed on the latest.

"They were instrumental, we could not have done this without our agency partners," he said. 

Watch: The Samsung Galaxy Note 9 is a $1,000 phone that's actually worth it

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Amelia Heathman

We finally know why Samsung's Galaxy Note 7s 'exploded'

It's been one of the most discussed technological failures of 2016, but as the dust settles around Samsung's recalled Galaxy Note 7 smartphone, one question remains: what actually went wrong with the phones?

Samsung has finally announced the answer or answers.

There were two battery manufacturing issues which caused the Note 7 to go up in flames. The first one related to battery size: batteries made by Samsung's SDI group were too small in one corner, causing negative electrodues to be bent and increase the likelihood of short circuiting.

The second issue was with batteries from a third party provider, Amperex Technology Ltd, which were found to be incorrectly welded. Points left on the batteries were able to penetrate protective insulating.

Before announcing the findings DJ Koh, President of Samsung Mobile said he wanted to "deeply apologise" for the incident.

In a statement Samsung said: "Samsung's investigation, as well as the investigations completed by three independent industry organisations, concluded that the batteries were the cause of the Galaxy Note7 incidents."

After explaining the issues, the South Korean company went on today to announce its earnings in 2016, recording its highest profit jump in three years despite the phone issues.

Samsung Electronics, the unit that mobile comes under, saw sales drop around two per cent but overall the company announced its full-year operating profit in 2016 was 29.24 trillion won (£20 bn).

A manufacturing engineering company, Instrumental, investigated the errors affecting the flagship phone last year.

According to Instrumental's teardown of the device, the Note 7's battery didn't have enough physical room for error. Samsung made the battery thinner, removing thickness margins, meaning the separators between the positive and negative layers may have been too thin, increasing the chance of these elements touching and sparking.

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In addition, Instrumental pointed out that when batteries charge, chemical processes cause the lithium to migrate and the battery to "mechanically swell". Usually, around 10 per cent extra space is required to compensate for this, but the battery in the Note 7 entirely filled its pocket. This increased the risk of 'explosion'.

Read more: Why Samsung's Note 7 crisis could finally help solve the problem of poor battery life

The design wasn't completely reckless, though. Instrumental noted that the battery sits within a CNC-machined pocket, which will protect it from being affected by other internal components. "Looking at the design, Samsung engineers were clearly trying to balance the risk of a super-aggressive manufacturing process to maximise capacity, while attempting to protect it internally," said Instrumnetal's engineers .

In September, Samsung was forced to suspend sales of the new phablet after reports batteries were "exploding" and catching fire while in the hands of users, just days before the phone’s UK release.

At the time, Samsung said the devices were burning up due to an “isolated battery cell issue” . An official told the Yonhap News Agency in South Korea that a "problematic battery" had been installed in "less than 0.1 per cent of the entire volume sold."

Customers who had already bought the phones posted videos online showing the badly scorched devices, including YouTube user Ariel Gonzalez.

"Came home from work, put it on to charge for a little bit before I had class," Gonzalez said. “Went to put it on my waist and it caught fire. Yup. Brand new phone, not even two weeks old. Be careful out there, everyone rocking the new Note 7, might catch fire."

The tech giant ordered a global recall of at least 2.5 million devices, with hopes this would be the end of the crisis. It assured customers the fixed devices were safe .

It was assumed the smartphone's troubles were behind Samsung, but last week a replacement Note 7 began emitting smoke on a US plane. A Southwest Airlines flight to Baltimore was evacuated on Wednesday after smoke was spotted while the plane was at the boarding gate. The plane was evacuated and no injuries were reported.

The wife of the owner of the phone, Sarah Green, told Reuters her husband had replaced the device about two weeks ago, after getting a text message from Samsung.

On October 10, according to South Korean news agency Yonhap, the company decided to temporarily halt production of the Galaxy Note 7 following talks with safety regulators as the replacement handsets also pose a significant fire risk and health and safety issue. This decision has now been made permanent.

In a statement released by the company, it simply said it will move quickly to investigate the reported case and work with the US Consumer Product Safety Commission (CPSC).

“We remain in close contact with the CPSC throughout this process. If we conclude a safety issue exists, we will work with the CPSC to take immediate steps to address the situation,” said Samsung.

Samsung and the US Consumer Product Safety Commission announced a formal recall, meaning that every Galaxy Note 7 unit needed to be returned immediately.

An official investigation revealed reports of 13 burns and 47 reports of property damage directly related to the recall. Figures suggest a total of 1.9 million phones will be affected by the recall including the initial one million original Note 7s, and 900,000 'replacement' handsets.

Samsung advised customers to contact the network operator or shop where they purchased the original device. It has put in place a policy so that owners can exchange the device for a different Samsung smartphone, such as the Galaxy S7 or S7 Edge, and customers should receive a $25 (£20) giftcard or bill credit as well as the new device.

Alternatively, owners should be able to receive a full refund at their point of purchase.

When returning the devices, users were told to power down their device and Samsung has been sending out "fireproof" packing with special gloves to to ensure the safe return of its now obsolete device in.

Some Note 7 owners weren't ready to give up their device, but unfortunately due to the issues Samsung had to force them.

People in New Zealand who haven't returned the phones and have decided to continue to use them aren't being given a choice going forward. Samsung has told customers it will disconnect their service.

"As part of our commitment to ongoing safety, Samsung would like to make our customers aware of plans to discontinue network service for Note7 devices," the firm said in a statement. From November 18, anyone with a Note 7 in the country will not be able to connect to any network: meaning no data, texts, or calls – although the devices will still connect to Wi-Fi networks.

"We strongly urge any customers still using their Note7 to return their device to the place of purchase for a refund or replacement," the New Zealand branch of the company said. "Between November 4-18, we will contact our customers on at least two separate occasions with information about this network discontinuation event to ensure they have received adequate notice."

Samsung’s reputation as an innovative tech company has suffered since the first announcements of the faulty batteries. This comes at a particularly crucial time in the smartphone market as Apple recently announced its new iPhone 7 range and Google has revealed it is making its own smartphones, the Google Pixel , in-house for the first time. Samsung’s credibility as a smartphone pioneer will be adversely affected in this increasingly competitive market.

"This is one of their flagship products, one of the areas that motors brand values. Phones exploding in plane holds is going to leave a lasting impression, whatever Samsung does to fix the situation," Vijay Michalik, research analyst at Frost & Sullivan, told WIRED.

The battery problem in the Note 7 may be down to wider competition in the smartphone market.

"When you look at pushing the boundaries of battery technology, when you're putting more power inside a smaller area there's more room for error," added Michalik. "But in the future, we will be evolving to new types of battery technology that potentially won't be susceptible to the same extreme failures.

For Samsung to recover its reputation, Michalik believes it needs to underscore this current episode and move on.

"They need to move forward with the S8 and to continue to display some of their more innovative products. We consider VR to be one of the next big emerging areas and Samsung has a strong position there, which puts them far above the competition in that space," said Michalik.

It’s not only reputations that have been affected at Samsung. Analysts have estimated the first recall may have cost the company between $1billion (£805million) and $2bn (£1.61bn), due to the cost of replacing the phones and falls in the South Korean company’s share price.

The company was forced to file a revised operating profit estimate of 5.2 trillion won (£4bn), compared to the 7.8 trillion won it announced only a week before. Samsung also slashed its third-quarter sales estimate by four per cent.

Recently, the firm reportedly issued a copyright takedown for a parody video that showed a Grand Theft Auto 5 mod in which a Samsung Galaxy Note 7 was used as a weapon. The YouTube link no longer plays, and instead an error message is shown in its place. "This video is no longer available due to a copyright claim by Samsung Electronics America, Inc. and its affiliates."

The original description read: "GTA 5 Mod Showcasing the explosive Samsung Galaxy Note 7. You can blow people up with a Samsung Galaxy Note 7 in GTA V."

In the US, PhoneArena has reported that Samsung's battery issues are not constrained to the Note 7. An anonymous source, who works for a US wireless carrier, told the site that a customer came in with an exploded Galaxy S7 Edge, which was given to him as a replacement device.

A spokesperson for Samsung told WIRED it was unable to comment on the specific incident until it has been able to examine the device.

"Customer safety remains our highest priority and we want to work with any customer who has experienced an issue with a Samsung product in order to investigate the matter and support them," said the spokesperson.

It appears that overall, Samsung customers are not happy with the recent turn of events. It was announced on October 25 that more than 500 Galaxy Note 7 owners in South Korea have filed a lawsuit against Samsung over its handling of the device's recall process.

The plaintiffs want compensation from Samsung for the the costs they had to bear to visit shops to exchange their phones, for the time they had to wait to transfer data from the faulty device to the new phone, and also the pyschological harm from using the product.

The consumers are asking for 500,000 won (£361) compensation per head, though the amount might increase later.

Another Galaxy Note 7 owner, this time in Flordia, US, has reportedly sued Samsung after his phone exploded in his pocket , causing severe burns on his right leg.

Samsung's Galaxy Note 7 saga appears to have reached an end after the company says it is 'truly sorry', in an open letter to its customers.

In the letter, Samsung admitted it fell short on its promise to offer "best-in-class safety and quality" in its products. It apologised for not living up to customers' expectations or its own standards with the faulty Note 7 device.

Moving forward, Samsung said it is "fully committed" to identifying and addressing the battery problems the Note 7 faced, which caused the phone to burst into flames when charged. It will share the findings once the investigations are completed.

The letter ended by stating: "We will listen to you, learn from this and act in a way that allows us to win back your trust," and was signed by Samsung's European president and CEO, YH Eom.

The company is now looking towards a "new start" after problems with the smartphone.

On the 47th anniversary of the beginning of the South Korean company, Kwon Oh-hyun told Samsung employees : “The latest crisis made us look back at ourselves and think maybe we have grown complacent, and it served as momentum for a new start."

“We should continue to push for innovation in order to strengthen our competitiveness and technology leadership,” added Kwon.

As part of this new start, Samsung appears to be moving on from the faulty device and is preparing a compensation program for Note 7 owners to get their hands on the new Galaxy S8 device. The phone is set for release in March 2017, and customers are set to receive the new device for free or at a discounted price.

“The new compensation program is designed to make it easier for those who exchange their Galaxy Note 7 with existing smartphones, to shift into our next model coming next year,” a Samsung spokesperson told The Korea Economic Daily .

No details have been released about how the company will carry out the compensation program yet.

This article was originally published by WIRED UK

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Samsung Finally Explains the Galaxy Note 7 Exploding Battery Mess

After two bungled recalls — and three months after Samsung killed production of the fire-starting Galaxy Note 7 smartphone — the South Korean company is now ready to explain what went wrong.

The company said at a news conference Monday morning in South Korea that two separate problems with its lithium-ion batteries were to blame for the fires, which led to two unprecedented recalls of the smartphone .

Samsung made the unprecedented decision in October to stop production of the Note 7 and issued a second recall after some customers reported that their replacement devices were still catching fire.

DJ Koh, president of mobile at Samsung, said that during the aftermath, the company worked to replicate the incidents and "complete a detailed analysis," according to a translator at the news conference.

In the case of the first battery, Samsung pointed to a design flaw in the upper right corner that, in some cases, caused the positive and negative tabs to break down, resulting in a short circuit.

The second battery, which came from another manufacturer, was apparently faulty because of a welding defect that could cause the battery to catch fire, it said.

The news comes as Samsung is preparing to reveal its fourth-quarter earnings results Monday at 7:30 p.m. ET, which will cover the period that was arguably the most blemished in Samsung's history.

Related: Galaxy Note 7 Battery Disaster Knocks Billions Off Samsung's Profits

The U.S. Consumer Product Safety Commission recall covered 1.9 million phones in the United States. Globally, to date, 96 percent of the 3 million phones that were sold have been returned, Samsung said.

Related: Samsung Is Making Remaining Galaxy Note 7 Phones Useless

The Galaxy Note 7 launched Aug. 19 in markets including the United States, with the company touting its iris security scanner as one of its standout features. However, the flagship phone soon turned into a serious fire hazard that was blamed for a number of fires and injuries.

Alyssa Newcomb is an NBC News contributor who writes about business and technology.

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Samsung explains note 7 battery explosions, and turns crisis into opportunity.

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Samsung launched the Galaxy Note 7 to record preorders and sales in August, but the rosy start soon turned sour. Samsung had to initiate a recall in September of the first version of the Note 7 due to faulty batteries that overheated and exploded. By October it had to recall over 2 million devices and discontinue the product. It's estimated that the recall will cost Samsung $5.3 billion.

In a report released Sunday night, the company detailed flaws in battery design and manufacturing that it believes caused the crisis.

Recalling a product is never easy, and yielding returns of more than 30 percent is extremely challenging. Samsung aggressively told the media its goal was a 100% recall. Less than three months later, the company has reached a 96 percent return rate globally.

Tim Baxter, CEO and president of Samsung Electronics America, Inc., called it one of the first digital recalls. The company sent text messages and emails to communicate the recall. Samsung also improved the volume and speed of returned units by working with telecom carriers to issue a software update that would disable the Galaxy Note 7’s charging abilities, rendering it useless as a phone. Since the recall was a safety issue, service providers agreed to distribute the update to dimish device charging.  And when the Department of Transportation (DOT) banned the Note 7 on airplanes, teams of Samsung employees were sent to airports to help consumers and collect the phones.

DJ Koh, President Mobile Communications Business for Samsung Electronics, said in an interview with industry analysts, “Technology innovation is important to Samsung, but our customer’s safety is more important. We want to reinstate trust in the brand." To regain trust, Samsung had to identify the root cause of the issues with the Galaxy Note 7 and apply these learning to future product designs. In a press conference held Sunday night in Korea, Samsung told the world what actions it was taking to remedy the situation as it announced the official results of a months-long investigation into what went wrong with the Galaxy Note 7.

Koh Dong-Jin, president of Samsung Electronics Mobile Communications Business, speaks during a news ... [+] conference in Seoul on September 2, 2016. (KIM HONG-JI/AFP/Getty Images)

Samsung builds a test lab to find  the root cause of the Note 7's issues

In the last 120 days, Samsung built a new test lab. It staffed it with 700 researchers, 200,000 devices and 30,000 batteries in an attempt to replicate the cause of fires in the phones. It tested the whole device, including areas such as the role of wired and wireless charging as well as fast and normal charging. It also tested the water resistance, with and without the back cover.

Samsung tested other device features such as the USB-C charger and Iris scanner. It evaluated the software and algorithms tied to wireless charging. It even evaluated how third party applications were impacting the phone. Additionally, it worked with three independent third party test labs - UL, Exponent, and TUVRheinland - to assess issues across software, hardware, manufacturing, logistics and handling. The finding from Samsung tests and the independent labs revealed the same results.

Battery manufacturing issues led to smoking phones

What happened? In short, batteries from two different manufacturers had flaws. The principal root cause of the first manufacturer’s battery problem (Battery A) was negative electrode deflections. The second manufacturer's product (Battery B), suffered from abnormal ultrasonic welding burrs. (For more information on the flaws (see the infographic ) While the principal cause was different in each type of the battery, the result was the same. A small subset of batteries could overheat and potentially catch fire. It’s clear that the smartphone industry’s desire for ever thinner phones with longer battery life has strained battery manufacturing processes.

Infographic Galaxy Note 7, what Samsung discovered. Source: Samsung Electronics

Samsung creates battery advisory group and designs an 8-point battery safety system

The company created a battery advisory group that includes leaders from various universities and specialized consultants. Battery Advisory Group members include: Clare Grey, a professor of chemistry at the University of Cambridge; Gerbrand Ceder, a professor of Materials Science and Engineering at UC Berkeley; Yi Cui, a professor of Materials Science and Engineering at Stanford; and Toru Amazutsumi, CEO of Amaz Techno.

Going forward, Samsung has a new quality assurance process that both Samsung and its component manufacturers must follow. It has implemented a multi-layer safety measures protocol at the product planning and a new 8-point battery safety system. This system includes:

• Durability Test – Conducting additional durability tests, including battery nailing, stress testing with extreme temperatures and overcharging tests.
• Visual Inspection – Visually checking the battery to compare it with samples confirmed to be in accordance with standardized criteria.
• X-Ray Test – Running X-ray tests to inspect any possible battery issue such as a deflection of the electrode, which we found to be one of causes of the Note7 issue.
• Disassembling Test – Disassembling the battery cell to perform a detailed check of the overall quality, including the battery tab welding and insulation tape conditions, which we found to be an issue with Note7.
• TVOC Test – Performing a sensing test to detect leakage at the battery component and complete device levels.
• ΔOCV Test – Inspecting the battery condition by checking voltage change in a normal temperature.
• Charge and Discharge Test – Applying new large-scale charge and discharge tests to all devices, which we initiated with our investigation into the Note7 issues.
• Accelerated Usage Test – Engaging in 2 weeks of real-life consumer usability scenarios, which we were able to shorten to a five-day test period.

Samsung will also contribute its learnings and processes for testing Lithium Ion batteries to various global standardization bodies. This act of goodwill also ensures that other smartphone vendors can request the same inspections. If the specifications were Samsung-specific, battery manufacturers might not adhere to the checklist.

What does this mean for the industry?

The smartphone recall sent shockwaves through the industry. Now that we have a definite answer to what went wrong, it’s clear that the recall will have both positive and negative consequences for the entire smartphone industry. Specifically,

• Samsung customers will get better phones. The upcoming set of Samsung phones should be the company's most highly tested set of devices to date. The software should have fewer bugs and be optimized for battery life. Hardware will also have been battle tested for all types of environments.
• Samsung processes get a boost. Samsung has taken 120 days to review every aspect of its process from product design through the supply chain. It’s likely that the inspections revealed areas of improvement across every aspect of Samsung’s smartphone business. The external reviews will only make the company’s processes better.
• Industry safety is improved. If not addressed, these issues would’ve arisen in another smartphone or IoT manufacturer’s product. The focus on testing and battery safety will make the smartphone industry safer overall.
• Battery makers margins get thinner. The pressure was already on battery manufacturers to deliver thinner products at faster rates. With the latest set of safety checkpoints, battery companies will need to perform deeper inspections, in the same amount of time, for the same revenue.
• Samsung products timetables get pushed out. The timeframe for introducing new products will be pushed out as the company changes its internal layout to accommodate changes in battery placement. Given it has taken a 120-day testing window, it’s likely that device roadmaps will be pushed out at least 6 months. The upside, Samsung’s 7 Edge product appears to be holding its own in the market.

Samsung isn't the first company to have a major consumer recall, nor will it be the last. It’s how a company handles a product recall that determines its future success or failure. While it’s been a difficult time for Samsung, the company took ownership of the issues, acted quickly and worked diligently to fix its problems. With its new and improved quality assurance processes and design prowess, Samsung should make a strong comeback as the world awaits the arrival of the Galaxy Note 8.

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Galaxy Note 7 Fires Caused by Battery and Design Flaws, Samsung Says

By Paul Mozur

• Jan. 22, 2017

HONG KONG — Samsung, the South Korean conglomerate, blamed battery manufacturing problems and design flaws for the embarrassing and costly failure of its Galaxy Note 7 smartphone and apologized to its customers and suppliers.

In a news conference that took place on Monday morning in South Korea, Samsung and outside experts said batteries made by two suppliers contained flaws that allowed the phones to overheat and in several cases catch fire. But they also cited what they said were flaws in the design of the phone, including an unusually thin lining between the electrodes of the battery.

Samsung said it would form an outside battery advisory group and add teams focused on the quality assurance of each core component of the device.

“We are taking responsibility for our failure to ultimately identify and verify the issues arising out of the battery design and manufacturing process prior to the launch of the Note 7,” said Koh Dong-jin, president of Samsung’s mobile communications business.

During the almost hourlong presentation, Samsung offered an extensive technical explanation of the problems with the battery but little insight into the breakdowns that caused the company to fail to identify the problems. Mr. Koh said the lessons the company had learned had been integrated into its processes and culture, yet offered no explanation of how the culture would change or what the problems with the culture were.

The cancellation of the Galaxy Note 7 has been an unprecedented public relations disaster for Samsung, the world’s largest maker of smartphones. It has also cost the company billions of dollars and, for some critics in South Korea, even called into question the very business model that has made Samsung so successful.

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• DOI: 10.25236/far.2023.051101
• Corpus ID: 261564182

A Critical Case Report of Samsung Note 7 Recall

• Tianlan Lan
• Published in Frontiers in Art Research 2023

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Why Samsung’s Note 7 Crisis Won’t Hurt Its Brand Long Term

• Utpal M. Dholakia

We’ve seen this movie before.

Things look rather bleak for Samsung at the moment. Within weeks of launching its flagship smartphone, the Galaxy Note 7, the company had to recall all of the more than 3 million devices it had sold, after reports of overheating and exploding batteries. Soon after, it halted production and scrapped the product entirely. All told, current estimates indicate the recall’s cost will exceed $6 billion (with one estimate even higher ). But the greater concern is about the long-term hit on Samsung’s brand. After all, it is one of the most valuable global brands. Branding consultancy Interbrand estimated Samsung’s 2016 brand value at $51.8 billion .

• Utpal M. Dholakia is the George R. Brown Professor of Marketing at Rice University’s Jesse H. Jones Graduate School of Business and author of  How to Price Effectively: A Guide for Managers and Entrepreneurs .  

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Samsung Investigation Reveals New Details About Note7 Battery Failures

Batteries for both the original and replacement note7 smartphones, though designed differently, had dangerous flaws. some experts ask: ‘are phones getting too thin', sharing is nice.

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Samsung says two different battery flaws were to blame for the fires that plagued its flagship Galaxy Note7 smartphone throughout the fall, leading to two separate recalls and, ultimately, the permanent withdrawal of the model from the market. The details are being released after an internal investigation, following weeks of speculation by reporters and analysts about what the company's report would conclude.

Consumer Reports and several other outlets were briefed on the findings in separate meetings on Thursday. An article published by the Wall Street Journal on Friday and widely cited by other news organizations said the report found that a number of the fires occurred because "some of the batteries were irregularly sized." That conflicts with details provided to Consumer Reports and revealed in a press conference on Sunday night. A Samsung representative said the information published on Friday "did not come from Samsung."

It has been known since early on that the phones' lithium-ion batteries caused the explosions and fires, which began to occur around the globe shortly after the model was launched to consumers on Aug. 19, 2016. The Note7 fires became a staple of news in the fall, leaving in their wake damage that includes a destroyed Jeep , some injuries, and the evacuation of a Southwest Airlines flight .

According to Samsung, the new investigation shows that problems were isolated to the batteries and were unrelated to other hardware components or to the software that manages energy use in the device. However, some experts say that Samsung's drive to make thinner phones with longer battery life may have contributed to the problem.

In addition to its own investigation, Samsung contracted with independent groups, including Underwriters Laboratories, to look into the causes of the fires.

The company used batteries from two suppliers in its Note7 phones—a company division called Samsung SDI and a separate company, Amperex Technology Ltd., that makes batteries for many smartphone brands. Samsung officials said the batteries from the two companies were designed and manufactured differently, and failed for separate reasons. 

That distinction is important, because it helps explain the unusual sequence of events during the recalls in the fall. Samsung first said it was stopping sales of the phone on Sept. 2 , and announced a formal recall on Sept. 15 in cooperation with the Consumer Product Safety Commission. But, with permission from the CPSC, Samsung began distributing replacement Note7 phones just a few days later.

Soon these, too, started catching fire, and a second recall was announced on Oct. 13 .

Now, Samsung is saying that its investigation shows there was no reason to believe the new phones would malfunction. "It was a very tough period, and we are sorry," DJ Koh, Samsung's global president of mobile communications, said during the briefing. "The most important thing for us is customer safety," and, ultimately, "earning back customers' trust."

How Defects Led to Short Circuits

Like other li-ion phone batteries, the Note7 batteries were made of sheets of material that served as positive and negative electrodes, with a separator between them. The electrodes and separator were folded up into a "jelly roll," then inserted into a pouch or casing.

Chemical reactions in a battery's electrodes allow an electrical charge to flow between them, generating a current that flows through a circuit and powers the device. Normally, the electrodes don't touch; if they do, a "short circuit" is created, and that can spark a fire.

During the presentation, executives showed a CT scan of a Note7 from before the first recall, in which one corner of the battery's pouch impinged on the jelly roll, deforming the negative electrode. In some consumers' phones, the positive and negative electrodes touched, causing a short circuit.

Samsung officials said that the company found that flaw before Sept. 15 and could see that it wasn't present in batteries made by the second supplier. At the time, the company did not disclose those details to the public.

We "were very comfortable" switching all battery production to the second manufacturer, marketing senior VP Justin Denison said.

Fires in the second group of batteries were caused by a manufacturing defect, Denison said. A sharp edge, or burr, was created by inconsistent welds in one section of the battery, the "positive tab." (See illustration, above.) In some cases the burr pierced insulating material and the separator between the two electrodes, causing a short circuit.

Thin Design a Contributing Factor

Samsung says its investigation involved 200,000 handsets, 30,000 standalone batteries, and 700 engineers working in a dedicated facility. Phones were tested with the back cases both on and off (see photo at the top of the article) and with various types of software running. They were evaluated during both rapid and standard charging. According to the company, batteries tested on their own failed at about the same rate as complete phones did.

This may show that no hardware beyond the batteries was at fault, but others in the battery industry say that smartphone design trends are making flaws more probable.

Qichao Hu is the CEO of SolidEnergy, a developer of high-energy-density batteries used in mobile devices, high-altitude drones, and clean-energy vehicles. He thinks Samsung's battery problems were partly a result of the company's attempt to maximize battery life while cramming components into ever-thinner phone cases. High-end phones typically use custom-designed batteries.

"Samsung is really pushing the boundaries, making the separators really thin," Hu says. "Making the separator thinner makes the battery much easier to short because it's already a porous membrane and that makes it easier for pinholes to form in the separator."

The Underwriters Laboratories investigation concluded that thin separators could have contributed to the risk of short circuits in both Note7 batteries. In addition, "higher energy density" in batteries such as those used in the Galaxy Note7 "can exacerbate the severity of a battery failure," Sajeev Jesudas, the president of UL's Consumer Business Unit, said at a public Samsung press conference. 

If you want safer batteries, according to Hu, you'll probably be looking at a bulkier phone with a removable battery. "They have a protective plastic case and may even have a gas relief valve to diffuse volatile conditions," he says. "Non-removable batteries don't have a case—just aluminum foil wrapping."

The other option for phone makers, according to Hu, is to create a very thin phone with a shorter battery life.

Elliot F. Kaye, the chairman of the CPSC, says that the agency is continuing its own investigation, but that it has "nowhere near the resources and people power that Samsung does. Not even close."

Successful Recall

The saga of the Galaxy Note7 is ending with a singular accomplishment: one of the most successful recalls in history, as measured by the number of products that were recovered from consumers. As of mid-January, Samsung says 97 percent of all Galaxy Note7 smartphones have been returned in the U.S., and 96 percent worldwide.

"A 97 percent recall rate is almost unheard of," says Pamela Gilbert, a former executive director of the CPSC who is now a partner at Cuneo Gilbert & LaDuca, LLP. The historic figure is often less than 50 percent, she says, even when auto safety is concerned. "People have an amazing ability to avoid doing things in their best interest if it's inconvenient." 

Like Consumer Reports and some other organizations, Gilbert was critical of Samsung in September for  not involving the CPSC  quickly enough. During the Consumer Reports briefing, executives said that the company notified the agency of problems on Sept. 2. But in the end, Gilbert says, "I think [Samsung] took this very seriously and wanted to get these phones back." 

One reason for the success of the recall was the steady beat of publicity, both from news outlets and other sources. For instance, the Federal Aviation Administration banned Note7 phones from flights, and until Jan. 10  the agency required airline personnel to make announcements telling passengers not to bring the phones on planes. Samsung dispatched customer-service staff to the country's 22 largest airports to help facilitate returns.

Tim Baxter, the president of Samsung America, said the biggest reason for the high success rate was that "the subject of the recall was actually the communication tool in reaching consumers." 

Once the recall was put in place, 23 million text messages were sent to Note7 owners telling them to return the phones, Baxter said. When people plugged in the phones to charge, a message appeared advising them of the recall, and through a series of firmware updates the company and its cellular partners reduced the functionality of the phones, until they were finally rendered inoperable.

The CPSC's Kaye has praised Samsung for steps it took "to drive up the recall response rate" and push "for every one of the recalled phones to be returned." 

Samsung officials said that they have instituted a new, eight-point program of quality assurance measures to help prevent future problems. And they plan to share what they've learned with others in the battery and mobile-phone industries. 

Kaye says the CPSC would work with the company to spread the message. "Beyond an excellent recall response rate, we need more good to come out of the Note7 recalls and I believe Samsung agrees," Kaye says. "At a minimum, industry needs to learn from this experience and improve consumer safety by putting more safeguards in place during the design and manufacturing" of technologies that use Li-ion batteries. He also said, "This is why we need to modernize and improve the safety standards for lithium-ion batteries in consumer electronics."

Update: This article has been updated with additional illustrations and comments from an Underwriters Laboratories executive and the chairman of the Consumer Product Safety Commission.

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Remarkable Recovery: Samsung Crisis Management Case Study

Have you ever wondered how a global tech giant like Samsung managed to navigate a major crisis and bounce back stronger? 

In the world of corporate governance, effective crisis management can be the difference between irreparable damage to a company’s reputation and a successful recovery. 

In this blog post, we delve into a Samsung crisis management case study to learn about exploding batteries to the intricate strategies employed to restore trust.

Samsung’s journey offers valuable insights into the intricacies of crisis management in the digital age. 

Join us as we explore the key lessons learned and best practices from this high-stakes situation, shedding light on the remarkable recovery efforts that propelled Samsung forward.

Let’s learn about sailing through tough times through Samsung crisis management case study

Background of Samsung History and growth of Samsung as a global conglomerate 

Samsung, founded in 1938 by Lee Byung-chul, started as a small trading company in South Korea. Over the years, it steadily expanded into various industries, such as textiles, insurance, and retail.

In the 1960s, Samsung ventured into electronics, marking the beginning of its transformation into a global conglomerate.

With a focus on technological innovation and a commitment to quality, Samsung rapidly gained recognition for its consumer electronics products, including televisions and appliances.

Throughout the 1980s and 1990s, Samsung significantly diversified its business portfolio, entering the semiconductor, telecommunications, and shipbuilding industries.

This diversification strategy helped Samsung become a key player in multiple sectors, solidifying its position as a global leader. Notably, Samsung’s semiconductor division became one of the largest chip manufacturers in the world, supplying components to various electronic devices worldwide.

Samsung’s ascent continued in the 2000s, driven by its successful expansion into the mobile phone market. The introduction of the Galaxy series, powered by the Android operating system, catapulted Samsung to the forefront of the smartphone industry.

The company’s innovative designs, cutting-edge features, and aggressive marketing campaigns contributed to its rise as a major competitor to Apple’s iPhone.

With its global reach, Samsung has consistently ranked among the world’s largest technology companies, epitomizing South Korea’s economic prowess and technological advancements.

Samsung has also been considered one the best companies that successfully managed and implemented change initiatives.

Overview of Samsung’s position in the technology industry

In the consumer electronics segment, Samsung has established itself as a dominant force. Its diverse product lineup encompasses televisions, smartphones, tablets, wearables, home appliances, and audio devices.

The Galaxy series of smartphones, in particular, has enjoyed immense popularity and has emerged as a fierce competitor to other industry giants. Samsung’s televisions are also highly regarded for their cutting-edge display technologies, such as QLED and MicroLED.

The company’s advancements in semiconductor technology have contributed to faster computing speeds, increased storage capacities, and improved energy efficiency.

Samsung’s influence extends beyond consumer electronics and semiconductors. The company is actively involved in telecommunications infrastructure, including the development of 5G networks and the production of network equipment.

Samsung has also made notable strides in the realm of software solutions, including its own mobile operating system, Tizen, and various software platforms for smart devices.

Samsung Galaxy Note 7 Crisis

The Note 7 battery issue marked a significant crisis for Samsung, leading to a widespread recall of the flagship smartphone and causing considerable damage to the company’s reputation.

The crisis began in September 2016 when reports emerged of Note 7 devices catching fire or exploding due to faulty batteries. These incidents raised concerns about consumer safety and triggered a wave of negative publicity for Samsung.

Upon receiving initial reports of battery-related incidents, Samsung initially responded by issuing a voluntary recall of the Note 7 in September 2016. The company acknowledged the problem and expressed its commitment to addressing the issue promptly and effectively.

Samsung attributed the battery malfunctions to a manufacturing defect, specifically a flaw in the design that caused a short circuit.

To ensure customer safety, Samsung advised Note 7 owners to power down their devices and refrain from using them. The company swiftly implemented measures to exchange the affected devices, offering customers the option to either replace their Note 7 with a new unit or receive a refund.

Samsung also collaborated with mobile network operators and retail partners to facilitate the recall process.

In its initial response, Samsung took steps to communicate with customers and the public about the issue. The company published official statements expressing regret for the inconvenience caused and assuring customers of its commitment to resolving the problem. Samsung emphasized its dedication to quality and safety, promising to conduct thorough investigations and implement necessary improvements to prevent similar incidents in the future.

Media coverage and public perception during the crisis

During the Note 7 crisis, media coverage played a significant role in shaping public perception and amplifying the negative impact on Samsung’s brand.

The crisis received extensive coverage from both traditional media outlets and online platforms, leading to widespread awareness and public scrutiny. Here’s an overview of media coverage and its influence on public perception:

• News Outlets: Major news organizations across the globe reported on the Note 7 battery issue, highlighting incidents, the recall, and subsequent developments. Television news segments, newspapers, and online news articles extensively covered the crisis , emphasizing the potential safety risks and consumer concerns. The constant media attention contributed to the widespread dissemination of information and increased public awareness of the issue.
• Online Platforms and Social Media: Social media platforms played a pivotal role in the crisis, enabling the rapid spread of information and user-generated content. Users took to platforms such as Twitter, Facebook, and YouTube to share their experiences, express concerns, and criticize Samsung’s handling of the situation. Viral videos, photos, and personal accounts of Note 7 incidents gained traction, further fueling negative sentiment and influencing public perception.
• Expert Analysis and Opinions: Alongside news coverage, experts and industry analysts provided their insights and opinions on the crisis. Their assessments of Samsung’s response, the potential causes of the battery issue, and the implications for the company’s brand reputation contributed to the overall narrative. Expert opinions had the power to sway public perception and shape the understanding of the crisis.
• Consumer Forums and Discussion Platforms: Online forums and discussion boards dedicated to technology and consumer experiences became hubs for discussions surrounding the Note 7 crisis. Consumers shared their frustrations, exchanged information, and warned others about potential risks. These platforms served as gathering places for individuals affected by the crisis and amplified the negative sentiment surrounding Samsung’s brand.

Financial implications and losses incurred by Samsung

The Note 7 crisis had significant financial implications for Samsung, resulting in substantial losses for the company. Here are some of the key financial impacts experienced by Samsung as a result of the crisis:

• Recall and Replacement Costs: The recall and replacement process incurred significant costs for Samsung. The expenses involved in collecting and replacing over 2 million of Note 7 devices, including logistics, shipping, and refurbishment, were substantial. The costs also encompassed the testing and certification of replacement devices to ensure their safety. The total recall cost was estimated at $5.3 billion.
• Decline in Sales and Market Share: The crisis had a detrimental impact on Samsung’s sales and market share in the smartphone industry. As consumer confidence in the Note 7 and Samsung’s brand reputation declined, potential buyers shifted their preferences to alternative smartphone options. The decline in sales of the Note 7, coupled with the negative impact on the perception of other Samsung products, led to a loss of market share for the company.
• Stock Price Decline: The Note 7 crisis had an immediate impact on Samsung’s stock price. News of the battery issue, recalls, and subsequent negative media coverage led to a decline in Samsung’s stock value. Samsung shares fell approximately to 7 percent right after 2 months of the crisis.

Crisis Management Strategy Employed by Samsung

Following are the key aspects of Samsung Galaxy Note 7 crisis management strategy:

Immediate actions taken by Samsung to address the crisis

In the face of the Note 7 crisis, Samsung swiftly implemented a range of immediate actions to address the situation and mitigate the impact on consumers and the company’s brand reputation. Here are some of the key actions taken by Samsung:

• Voluntary Recall: As soon as reports of battery issues emerged, Samsung initiated a voluntary recall of the Note 7. This proactive step demonstrated the company’s commitment to consumer safety and willingness to take responsibility for the problem.
• Temporary Production Halt: To address the root cause of the battery issue, Samsung temporarily halted production of the Note 7. This decision aimed to prevent further distribution of potentially defective devices and allow for thorough investigations and corrective measures.
• Transparent Communication: Samsung made efforts to communicate openly and transparently about the crisis. The company issued official statements and press releases acknowledging the problem, expressing regret for the inconvenience caused, and reassuring customers of its commitment to resolving the issue. Transparent communication was crucial in maintaining trust and providing timely updates to affected consumers.
• Collaboration with Authorities: Samsung collaborated closely with regulatory authorities and industry experts to investigate the battery issue comprehensively. By engaging external expertise, the company aimed to identify the root cause and develop effective solutions. This collaboration demonstrated Samsung’s commitment to finding the best possible resolution.
• Customer Support and Safety Guidelines: Samsung provided clear instructions to consumers regarding the use of Note 7 devices, emphasizing the importance of safety. The company advised customers to power down their devices, participate in the recall, and utilize alternative devices in the interim. This approach prioritized customer safety and aimed to prevent further incidents.
• Increased Battery Testing and Safety Measures: Samsung implemented enhanced battery testing procedures and stringent safety measures to prevent similar incidents in the future. The company adopted more rigorous quality control processes, including additional safety certifications and testing standards, to ensure the highest levels of product safety.

Communication strategies employed by Samsung

Samsung employed various communication strategies to address the Note 7 crisis and manage the impact on its brand reputation. Effective communication was crucial in maintaining transparency, addressing consumer concerns, and rebuilding trust. Here are some of the communication strategies employed by Samsung:

• Official Statements and Press Releases: Samsung issued official statements and press releases to provide updates on the progress of the recall, investigations, and corrective actions. These statements expressed remorse for the inconvenience caused and reiterated the company’s commitment to customer safety. Clear and concise communication helped keep customers informed and reassured them that Samsung was actively working to resolve the issue.
• Direct Customer Communication: Samsung directly communicated with customers to provide instructions and updates on the recall process. The company utilized various channels such as email, SMS messages, and notifications through its official website and smartphone apps. This direct communication ensured that customers received important information and guidance regarding the recall and replacement program.
• Social Media Engagement: Samsung actively engaged with customers and the public on social media platforms, including Twitter, Facebook, and YouTube. The company responded to customer queries, addressed concerns, and provided updates on the progress of the recall. By engaging in two-way communication, Samsung demonstrated its willingness to listen, respond, and provide assistance to affected customers.
• Collaboration with Industry Experts: Samsung collaborated with industry experts, battery manufacturers, and regulatory authorities to investigate the root cause of the battery issue. This collaboration was communicated to the public, showcasing Samsung’s commitment to finding solutions and ensuring that the necessary expertise was involved in resolving the crisis.
• Advertisements and Marketing Campaigns: Samsung launched advertising and marketing campaigns focused on rebuilding trust and emphasizing its commitment to quality and safety. These campaigns highlighted Samsung’s dedication to addressing the issue and regaining consumer confidence. Advertisements often emphasized the company’s rigorous testing procedures and quality control measures to assure customers of the safety of its products.
• CEO Apology: Samsung’s CEO issued a public apology, taking personal responsibility for the crisis and expressing regret for the inconvenience and concern caused to customers. The CEO’s apology aimed to convey sincerity, empathy, and a commitment to rectifying the situation, while also reinforcing the company’s accountability and determination to regain trust. The apology was published on a full page in 03 major US newspapers – the Wall Street Journal, The Washington Post and The New York Times.

Collaborations with regulatory authorities and industry experts

Samsung worked closely with government agencies and regulatory bodies in various countries where incidents related to the Note 7 were reported. The company shared information, conducted investigations, and cooperated with authorities to ensure compliance with safety regulations and guidelines. Collaboration with government agencies helped align efforts to address the crisis and establish industry-wide safety standards.

In the United States, Samsung collaborated with the CPSC, an independent federal agency responsible for ensuring the safety of consumer products. Samsung worked together with the CPSC to investigate the battery issue and coordinate the recall process. This collaboration ensured that the recall efforts followed established safety protocols and provided consumers with accurate information.

Samsung collaborated with battery manufacturers to investigate the specific manufacturing defects that caused the battery issue. The company worked closely with these partners to analyze the battery designs, manufacturing processes, and quality control measures. By involving battery manufacturers in the investigation, Samsung aimed to identify the root cause and implement corrective actions to prevent similar issues in the future.

Samsung engaged independent testing labs to conduct thorough assessments of the Note 7 batteries and verify the effectiveness of corrective measures. These labs specialized in battery testing and certification, providing expertise and unbiased evaluation of the battery performance and safety. Collaboration with independent testing labs helped validate Samsung’s efforts to address the battery issue and instill confidence in the effectiveness of the solutions.

Post-Crisis Recovery and Rebuilding 

Samsung implemented more stringent quality control measures across its product development and manufacturing processes. This included enhanced battery testing protocols, increased inspections, and stricter quality assurance standards. By demonstrating a commitment to producing reliable and safe products, Samsung aimed to rebuild customer trust.

Extended Warranty and Customer Support: Samsung extended warranty periods for existing and new devices, including the Note 7, to provide customers with added assurance. The company also enhanced its customer support services, ensuring that customers could easily access assistance, product information, and technical support. These initiatives aimed to demonstrate Samsung’s commitment to customer satisfaction and support.

  Launch of subsequent product lines and their impact on brand perception

Following the Note 7 crisis, Samsung launched subsequent product lines, including flagship smartphones like the Galaxy S8 and subsequent iterations. These launches played a crucial role in shaping brand perception and rebuilding trust. Key factors that influenced brand perception and the recovery process include:

• Emphasis on Safety and Quality: Samsung placed a strong emphasis on safety and quality in its subsequent product launches. The company implemented rigorous testing procedures and introduced new safety features to ensure the reliability and safety of its devices. By highlighting these improvements, Samsung aimed to regain customer trust and reassure them of its commitment to producing high-quality products.
• Positive User Experience: Samsung focused on delivering positive user experiences with its new product lines. This included improvements in design, performance, and functionality to enhance customer satisfaction. By providing users with exceptional products, Samsung aimed to rebuild its reputation and generate positive word-of-mouth, contributing to brand recovery.
• Brand Messaging and Marketing: Samsung’s marketing efforts during subsequent product launches were carefully crafted to reinforce positive brand associations and regain customer trust. The company emphasized innovation, customer-centricity, and the commitment to quality and safety. Marketing campaigns highlighted features, benefits, and technological advancements to create a positive brand image and overcome the negative perceptions associated with the Note 7 crisis.

Final Words 

Samsung’s handling of the Note 7 crisis serves as a case study in crisis management. Despite the significant financial and reputational setbacks, the company took proactive steps to address the crisis, regain customer trust, and prevent similar incidents in the future.

The Samsung crisis management case study highlights the importance of swift and transparent communication, customer-centric actions, and continuous improvement in product safety and quality. By effectively addressing the crisis, Samsung was able to navigate the challenging situation and rebuild its brand, reaffirming its position as a leading global technology company.

Overall, the Samsung crisis management case study provides valuable insights into how a company can recover from a major setback, restore customer trust, and strengthen its position in the market through strategic actions and a relentless commitment to customer satisfaction and product excellence.

About The Author

Tahir Abbas

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Frontiers in Art Research , 2023, 5(11); doi: 10.25236/FAR.2023.051101 .

A Critical Case Report of Samsung Note 7 Recall

Tianlan Lan

Winchester School of Art, University of Southampton, Winchester, United Kingdom

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This article is a report of Samsung Note 7 recall in 2016. Relevant literature, annual and news reports are summarized to analyze and assess. Samsung launched the smartphone Galaxy Note 7 on 19th August 2016. However, this product suffered multiple incidents of overheating or explosions around the world due to quality problems. Before the product was removed from the market completely, it had experienced two recalls. This incident caused Samsung significant financial losses and a crisis of consumer trust. While Samsung was quickly forgiven by consumers globally, the corporation has been accused of differential treatment in China, and the resulting impact has been far-reaching. For all the smartphone industry, it is recommended that: 1. there should be a gradual shift towards an open model of innovation; 2. suppliers should be scrutinized and enhanced in design awareness; 3. a well-designed crisis management plan should be recommended; 4. should pay more attention to the Chinese market.

Samsung, Design Management, Business Strategy, Crisis Management

Cite This Paper

Tianlan Lan. A Critical Case Report of Samsung Note 7 Recall. Frontiers in Art Research (2023) Vol. 5, Issue 11: 1-8. https://doi.org/10.25236/FAR.2023.051101.

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How Did Samsung Overcome the Galaxy Note 7 Crisis?

Samsung is an electronics giant known across the globe for its smartphones and other devices. The sales of Samsung smartphones have been booming, giving stiff competition to other leading smartphone brands. People worldwide have appreciated Samsung’s flagship smartphones, such as Galaxy S5, Galaxy S6, and Galaxy S7, among others. However, things started going south with the launch of the Galaxy Note 7 (in August 2016), the successor to the Galaxy S6.

The Galaxy S7 was initially welcomed wholeheartedly through record-high pre-orders and sales. But soon, this smartphone turned into a nightmare for consumers who bought it, which led to the Galaxy Note 7 crisis. The Galaxy Note 7 smartphones were bursting into flames across the world.

A young girl in Minnesota had burned her hand from a Galaxy Note 7 explosion. There were countless reports from across the globe complaining about how these phones were overheating and exploding like bombs. These phones were nothing short of explosives that the consumers were carrying in their pockets, and soon, airlines banned passengers with Galaxy Note 7 from boarding planes unless they switched off their smartphones. The Samsung Galaxy Note 7 crisis was something that the brand had never seen before.

What Led to the Galaxy Note 7 Crisis?

Samsung, at first, notified that these explosions were because of some defective pieces and launched an exchange program, where they encouraged consumers to exchange their Galaxy Note 7 smartphones for a new batch of the same model. However, things soon turned ugly when even the replacements started exploding.

Samsung could not understand the cause of the Galaxy Note 7 crisis. The next logical step was to initiate a major recalling program for these smartphones. However, this Samsung Galaxy Note 7 crisis negatively affected the sales and reputation of the brand. To regain the trust of its customers, it was pertinent to identify the root cause of this debacle.

Samsung tested the devices, including charging (wireless and fast charging), iris scanner, USB-C charger, software, manufacturing, etc. They also partnered with independent labs to conduct studies on the cause of the Samsung Note 7 crisis. Their findings were uniform: the batteries malfunctioned, leading to overheating and subsequent explosions.

How Did Samsung Deal With the Crisis?

Setting an example for all brands, Samsung dealt with the crisis rather impressively. We break it down below.

1. They showed accountability

Samsung was quick to acknowledge problems with the Galaxy Note 7 models. They did not shirk the responsibility when the Galaxy Note 7 crisis ensued. They held a press conference and admitted that they were aware of the explosions. Although, they did not have any information on the cause of those accidents at that point.

2. They were proactive

Samsung was proactive in exchanging the models of the first batch as they believed there was some manufacturing defect. However, when the replacements started exploding, they did not waste any time before they began to recall all the Galaxy Note 7 pieces off the market. They sent alerts through e-mails and messages to return the Galaxy Note 7 models. Their only priority was the safety of the people; that’s why they partnered with telecom companies to send software updates that would disable the phone’s charging function, which would render the smartphone useless.

The recall of all Galaxy Note 7 phones from the market cost Samsung six billion dollars. In October, Samsung finally stopped the production and sales of the Galaxy Note 7.

3. They thoroughly investigated to discover the cause

Samsung built a lab where 700 researchers tested 200,000 phones and 30,000 batteries.

It was essential to determine the fault with the smartphones to remedy the situation and salvage Samsung’s brand image . They tested the phones under extreme conditions to emulate the circumstances when the phones exploded and found fault in their batteries. They communicated their findings to the media.

4. They brought in new quality check measures

Samsung devised a new and multi-step quality and safety check that all its manufacturers must follow. In addition, Samsung has made several internal changes since the Galaxy Note 7 crisis, like adopting more advanced safety measures, changing leadership, bringing in new members to do damage control, etc. Their challenge was not only to deal with the Samsung Note 7 crisis but to earn back the loyalty and trust of the customers.

5. They improved overall processes

Samsung went the extra mile to show that it could design and manufacture stable, high-end smartphones and that they were no less than any of its competitors. The company conducted studies across the various departments and made the necessary changes to improve multiple aspects of the smartphone manufacturing processes. As a result, future smartphones released will be the most tested devices with fewer bugs and top-notch hardware.

Samsung’s proactive attitude and the desire to be better have struck a chord with its loyal customers. As a result, Samsung has significantly revived its losses and has proved to be worthy of customers’ love and support over these years.

6 Learnings from the Samsung Note 7 Crisis Management

Here are a few lessons to be learned from the Samsung Galaxy Note 7 crisis management.

1. Acknowledge the problem

Samsung’s quick acceptance of its faulty Galaxy Note 7 pieces showed the way for other brands to take ownership of their mistakes.

2. Act quickly

It is crucial to be proactive in such situations to determine the cause and do damage control. Samsung recalled all the Galaxy Note 7 phones and completely halted the production and sales of the model in a matter of two months. Changing the policies and internal workings is essential to remedy the larger picture.

3. Improve safety standards

Samsung has also shared its learnings from this Galaxy Note 7 crisis with the world so that other companies and manufacturers can benefit from them and be more cautious while manufacturing components of smartphones. The Samsung Galaxy Note 7 crisis and the company’s increased attention to the quality and safety of its smartphones influenced other brands to up their quality check processes and introduce better standards to the industry.

4. Strive to identify the root cause

Instead of hiding information or not owning up to the problem, it is fundamental to know what caused the crisis. Samsung did not rest until it had unraveled the mystery of the Galaxy Note 7 crisis.

5. Communicate effectively

Samsung updated its customers about every new finding or decision regarding the Galaxy Note 7. This built a sense of trust among the customers who had been disappointed due to such mishaps.

6. Apply your learnings to future projects

Any crisis can be a lesson to move forward and improve. Samsung used this fiasco to improve its manufacturing process and quality checks and implemented improved methods for newer launches. These measures showed that Samsung cared for its customers, and hence, the customers did not irrevocably lose their faith in the brand.

Yes, Samsung made a huge mistake with the Note 7 and disappointed its customers. But it owned up to its mistake, acted instantly, worked tirelessly, and has come back stronger than before. The South Korean brand has shown it is larger than any Galaxy Note 7 crisis. Loyal customers have recognized their effort and put the explosion episode behind them. They have embraced the brand again. Through its efficient management of the debacle, Samsung has proved that a failure does not define the future of a brand as long as they decide to learn from it.

The Samsung Galaxy Note 7 crisis led to the brand halting the manufacturing and sales of only the Galaxy Note 7 model. However, Samsung Galaxy Note 8 recovered all the damage done by Galaxy Note 7. Galaxy Note 8, launched in 2017, was a flagship phone loved by the people.

Samsung acted hastily and exchanged the faulty Note 7 phones. Then, realizing there was a problem with the entire range and not just one isolated batch, they called back all the Note 7 phones from the market, even though they lost six billion dollars.

Samsung Note 7 had faulty batteries that got overheated and exploded like bombs. These explosions had harmed several people across the globe. Upon understanding that the phones’ batteries were faulty, Samsung decided to discontinue the range.

Samsung Galaxy Note 7 explosions were standalone instances. Samsung has implemented stringent quality assurance checks and battery safety systems to ensure such accidents never occur again.

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Was The Samsung Galaxy Note 7 Failure Inevitable? What May Happen To Handsets Still In Circulation

It may seem as if the Samsung Galaxy Note 7 fiasco is over, but there is potential for issues to resurface. Despite Samsung having recalled the majority of the three million Galaxy Note 7 handsets sold worldwide, a significant number of enduring fans continue to use the device. The handsets that remain on the market may serve as a case study for what would have happened to the Galaxy Note 7 had it not been recalled.

The Galaxy Note 7 was discontinued in October 2016 due to several cases of handsets catching fire and exploding. Though there have been no other reports of Galaxy Note 7 explosion or injury since the final recall, some believe the device was doomed to malfunction even if its flaw did not present as spontaneous combustion.

“The ones that are still out there, over time you’ll see the battery swell. When batteries swell it’s going to push everything out. The frame is going to pop,” Wayne Lam, IHS Markit principal analyst for mobile electronics, told International Business Times.

Samsung presented the findings of its investigation into the Galaxy Note 7 last week and determined the fault was primarily in the device’s battery. The manufacturer explained there were different faults within the two batteries used on the Galaxy Note 7, which lead to short circuiting and explosion. However, there was likely a design flaw within the Galaxy Note 7 handset that also contributed to its failure, according to Lam.

Samsung did not focus on this aspect in its investigation, but third-party research groups that studied the Galaxy Note 7 independently determined the battery housing was too small to accommodate the device’s 3,500mAh cell. Having reported its findings in December 2016, the teardown publication Intrumental also believes Galaxy Note 7 handsets would break apart over time due to an inability to accommodate natural battery swelling.

What was supposed to be Samsung’s greatest innovation in the Galaxy Note 7 turned into its greatest hinderance. The manufacturer aggressively promoted the Galaxy Note 7’s unique design when it released. The Galaxy Note 7 was the first phablet to feature Samsung’s dual-edge curved display. With this design, the Galaxy Note 7 handset was 2.2 mm narrower than the previous Galaxy Note 5, Samsung Senior Designer Hong Yeo told iDigitalTimes in August.

The shrunken chassis housed the battery in a highly pressurized environment. While batteries are already a densely packed power source, the Galaxy Note 7 battery was approximately 22 percent more dense than the previous Galaxy Note 5, according to Lam. It was also denser than the 3,600mAh battery in the Galaxy S7 Edge, which features a design similar to the Note 7.

“The fundamental technology of the battery hasn’t changed. But cramming everything into a smaller and smaller space leads to safety gaps,” Lam told IBTimes. “They left very little room for error. Unless it was a perfectly manufactured battery cell there was bound to be some issues.”

While exploding handsets were the immediate catalyst behind the Galaxy Note 7 recall, it was likely this possible long term-effect that lead to the ultimate discontinuation of the device. Samsung was forced to acknowledge that other malfunctions could arise while the device remained on the market, Lam added.

In addition to the recall and urging users to surrender devices for exchange or refund, Samsung also deployed a software update to disable handsets. Still, there are approximately 76,000 Galaxy Note 7 handsets still being used in the United States, according to CNBC . Many of those users have found ways to bypass the end-of-life update or continue to ignore notifications to power down Galaxy Note 7 handsets.

Several owners have congregated within online support forums , and indicate they plan to keep using the handsets, at least until the Galaxy Note 8 releases. They don’t feel their handsets are dangerous, to the chagrin of friends, family and media. Instead, numerous forum members feel they have been unfairly scrutinized in Samsung’s effort to bury the Galaxy Note 7.

However, it is likely fans’ continuous loyalty to the brand that will keep the Galaxy Note line going. It is likely many more Galaxy Note 7 owners would have kept their original devices had the final recall not occurred.

Since its press conference discussing the Galaxy Note 7, Samsung appears to be more forward-facing, giving hints toward the Galaxy S8 launch and confirming that the Galaxy Note 8 will release later in 2017. The manufacturer has detailed future devices will be rigorously tested under a new eight-point safety check system in an effort to rebuild consumer trust.

“What those quality checks really serve as is to calm the market down,” Lam said. “You need a big company like that to admit fault and take responsibility.”

© Copyright IBTimes 2024. All rights reserved.

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• Samsung’s Galaxy Note 7 Recall: Lessons for Procurement and Supply Chain Teams

With a big push in the technology industry to roll out upgrades and launch new products as quickly as possible, the rush in production and innovation can’t come at the expense of quality control.

Samsung’s recent recall of the Galaxy Note 7  calls to mind a few critical supply chain lessons.

There’s a big push in the technology industry to roll out upgrades and launch new products as quickly as possible, but this rush in production and innovation can’t come at the expense of quality control.

In Samsung’s case, the company was aiming to bring the Galaxy Note 7 to market ahead of Apple’s iPhone 7 .

But rather than leveraging their supply chain as a competitive advantage, Samsung’s speed-to-market ended up costing them customer loyalty, brand reputation and sales - and that’s not counting the $5.3 billion in lost profits and costs of halting production and physically recalling the product.

Read:   Samsung Asks Its Employees to Question Their Work

Maintaining quality control is a difficult task for any company, but it gets even more complicated for companies that have a wide web of geographically diverse suppliers to manage.

The Samsung situation provides a few takeaways for procurement and supply chain teams:

1. Supplier relationships should be at the center of procurement.  While cost reduction is important and often at the top of most organizations’ priority lists, we need to reframe the conversation from “ how much more can we squeeze from our suppliers ” to “how can we get more value from our suppliers?”

Oftentimes when we choose suppliers based solely on cost, product quality suffers. When we work with suppliers in a collaborative, strategic framework to cultivate more value for both parties, we find that less risk, continuous improvement and lower costs follow.

2. Balancing stakeholders is an art we must master.  Marketers, executives, designers and suppliers all have different ideas of what a product should look like, what it should be made of, and when it should be launched. These different opinions are driven by different needs.

Quality matters most to product development while speed-to-market is a major concern for the marketing team. When departments fail to communicate and coordinately effectively, the results can get ugly.

With Samsung, the problems are thought to stem from a design flaw, which likely could have been caught if the organization was better aligned. It’s up to procurement to understand the overarching company objectives, each department’s goals, the trade-offs for each stakeholder interest  and make the modifications and decisions needed to arrive at the best possible outcome for the business.

3. Procurement plays a leading role.  Procurement is the only part of the business that works with every other team to help them achieve their goals . This puts procurement in a unique position to drive the success of not just their function, but for the entire organization.

This should empower us, and we need to remember this as we interact with other departments and make both tactical and strategic business decisions.

Samsung’s recall reminds us of the importance of quality control and effective supplier relationship management.

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