Yun Jong-yong
1944–

Chief executive officer, Samsung Electronics Company

Nationality: Korean.

Born: January 21, 1944, in Yonchun, Korea.

Education: Seoul National University, BS, 1966.

Family: Married (wife's name unknown); children: two.

Career: Samsung Group, 1966–1969, entry-level positions; Samsung Electronics Company, 1969–1977, Television Business Division, Video Business Division; 1977–1980, branch-office manager; 1980–1981, director of Television Business Division; 1981–1985, director of Video Business Division; 1985–1988, director of Research and Development Division; 1988–1990, vice president of Electronics Group; 1990–1992, vice president and representative director of Consumer Electronics Business Group; 1992, president and representative director of Consumer Electronics Business Group; Samsung Electro-Mechanics Company, 1992–1993, president and CEO; 1993–1995, head of Display Devices Division; Samsung Japan, 1995–1996, president and CEO; Samsung Electronics, 1996–, president and CEO; Samsung Group, 1996–1999, president.

Awards: Bronze Medal for Contribution to Industry, Republic of South Korea, 1990; Gold Medal for Contribution to Industry, Republic of South Korea, 1992; Honorable Engineering Alumnus Award, Seoul National University, 1995; Outstanding Achievement in Management Award, Institute of Industrial Engineers, 1998; Most Successful CEO in Korea, Korea Management Association, 1999; Top 25 Managers of the Year, BusinessWeek, 2003; Asia's Businessman of the Year, Fortune, 2000; Asia Business Leader Award, CNBC, 2002.

Address: Samsung Group, 250, 2-ga, Taepyung-ro, Chung-gu, Seoul, 100-742, South Korea; http://www.samsung.com.

■ The soft-spoken Yun Jong-yong, the CEO of Samsung Electronics Company since December 1996, led his company

to the forefront of the keenly competitive consumer electronics industry, surpassing key rivals Sony and Nokia in terms of market value by early 2004. According to a report from the Agence France Presse news service, South Korea's Daishin Securities reported on April 14, 2004, that the market capitalization of the South Korean electronics giant had topped $88 billion, compared with Nokia's $80 billion and Sony's $39 billion.

Samsung Electronics not only shot to the front of the pack internationally but also lifted its parent Samsung Group to the number one spot in South Korea's all-important business rankings. Thanks in large part to Yun's efforts, which drew heavily on industrial engineering (IE) concepts, Samsung Group stood at the top of South Korea's giant industrial conglomerates, or chaebols. In many ways the Asian economic crisis of the late 1990s helped pave the way for Samsung's climb to the top of South Korea's increasingly high-tech business world. When the dust from that massive recession had finally settled in 2001, Hyundai had tumbled from its leadership position, and the number three Daewoo was essentially swept away on a tide of scandal. In the five years between 1997 and 2002, 19 of South Korea's 30 chaebols went under while Samsung made its way into the number-one position. As of late 2003 Samsung accounted for roughly 25 percent of South Korea's gross domestic product and 20 percent of the country's total exports.

TAKES OVER TROUBLED COMPANY

An engineer by trade, Yun took over as CEO at Samsung Electronics when the company was in deep trouble in December 1996. The world's largest producer of memory chips was hurting because of a sharp decline in chip prices and was also losing money on sales of low-priced microwave ovens and televisions. According to Fortune magazine, the situation at Samsung was so dire that top management authorized Yun to take drastic measures not usually seen in South Korean business circles. The new CEO moved quickly to restore the electronics company to financial health, slashing its payrolls by a third, selling off almost $2 billion in corporate assets, and replacing about half of the company's division managers. To punch up Samsung's consumer appeal, Yun introduced a wide range of cutting-edge products, including flat-panel displays, MP3 music players, and a new line of lightweight cell phones with Internet access and voice-activated dialing.

Yun Jong-yong was born on January 21, 1944, in Yongchun, Korea, a small town in the not-yet-divided country's southeastern province of Kyungsangpukdo. Interviewed by Eric Minton for a profile in Industrial Management, Yun said that as far back as he could remember he had always loved to learn, "more out of curiosity than a thirst for knowledge. I just think I was very curious about everything ever since I was young, and curiosity leads you to natural science" (July 1, 1999).

When it came time for Yun to make a decision about his course of study at college, he was forced to reject his first choice—philosophy—as being unlikely to prepare him to earn a living and opted instead for electrical engineering. He had to fight for that choice, however, as revealed in Minton's profile: one of Yun's high-school teachers was so convinced that the young man should pursue the study of physics that he at first refused to submit Yun's college application until he changed his choice of major. Yun was obligated to use all his powers of persuasion to get the teacher to relent; in the end Yun got what he wanted.

GOES TO WORK FOR SAMSUNG GROUP

Graduating from Seoul National University in 1966 with a bachelor's degree in electrical engineering, Yun went to work for Samsung Group, one of South Korea's leading industrial conglomerates. In his first three years with the company he worked as a member of the administrative staff in the Office of the Chairman; in 1969, on the strength of his engineering background, Yun was selected to join Samsung's newly created electronics subsidiary. For the next several years he worked in the television division of Samsung Electronics, holding positions in such areas as manufacturing, materials handling, engineering, and administration.

In January 1977 Yun was sent to Tokyo to take over as manager of Samsung Electronics' Japanese branch office. In the middle of 1980 he returned to South Korea to become director of the company's Television Business Division. A little over a year later, when Samsung Electronics decided to launch its own Video Business Division to produce video cassette recorders (VCRs) for sale worldwide, Yun was tapped to direct the operation. Samsung was forced to develop its own VCR technology to get the job done, since no other countries were willing to share their know-how with the South Korean company.

Named director of Samsung Electronics' Research and Development Division in 1985, Yun began to increase his use of IE principles to boost productivity and shrink production time. According to the Institute of Industrial Engineers (IIE), industrial engineering focuses on the design, improvement, and installation of integrated systems of people, materials, information, equipment, and energy. "It draws upon specialized knowledge and skill in the mathematical, physical, and social sciences together with the principles and methods of engineering analysis and design to specify, predict, and evaluate the results to be obtained from such systems," IIE explains ("Definition of Industrial Engineering").

SETS UP COMPANY IE CENTER

Elevated to the ranks of senior management in 1988 when he was named vice president of Samsung's Electronics Group, Yun established an IE center designed to apply IE principles to all phases of the manufacturing operation, including materials handling, supply chain, and engineering. Not everyone at Samsung was as ready to embrace IE as Yun, however. As he told Minton, "There was resistance because people thought this was very cumbersome in the beginning. The introduction of the new tools entailed big changes, and I think people are intrinsically adverse to change" (July 1, 1999).

To accelerate understanding and acceptance of IE concepts at Samsung Electronics, Yun held in-house training sessions for shop supervisors and managers. Even more effective in winning the hearts and minds of Samsung factory personnel was Yun's implementation of industrially engineered solutions to existing problems on the assembly line. One such project involved shortening the length of the company's VCR production line from 180 meters to 120 meters. Yun was told there was no way the project could be completed in fewer than 60 to 90 days; he proved it could be done in five days. Before long skeptics and naysayers were transformed into outspoken advocates of IE.

Only a month after his promotion to vice president in May 1988 Yun completed the Senior Executive Program at the Massachusetts Institute of Technology's Sloan School of Management. His efforts to introduce IE principles throughout the Samsung Electronics culture were redoubled after his return to South Korea. In March 1990 Yun was named vice president and representative director of Samsung's Consumer Electronics Business Group. Two years later he was promoted to president while retaining his position as representative director.

TAKES OVER AS PRESIDENT AND CEO

In December 1992 Yun was tapped to serve as president and chief executive officer of Samsung Electro-Mechanics (SEM), thus beginning what would stretch into four years away from Samsung Electronics, which had been his home since 1969. SEM, established in 1973 as a manufacturer of key electronics components, was focusing in the early 1990s on the production of such products as chip components, multilayer circuit boards, and mobile communication and optical components. During his tenure at SEM Yun managed to smooth out the supply chain for Samsung operations using SEM components by improving assembly-line productivity. He also implemented just-in-time production operations.

After about a year at SEM Yun took over as president and CEO of Samsung Display Devices Company (now known as Samsung SDI). This Samsung subsidiary, which manufactured a wide variety of display devices, including computer monitors and flat-screen displays, in the early to mid-1990s was focusing much of its energy on the development of a cathode-ray tube for use in a 32-inch high-definition TV. In November 1995 Samsung executives appointed Yun to serve as president and CEO of Samsung Japan, headquartered in Tokyo.

At the end of 1996 Yun returned to Samsung Electronics, this time as its new president and CEO. There could hardly have been a less propitious time for Yun to take over the company. By the middle of 1997 South Korea, along with most of East Asia's industrialized countries, found itself in the midst of a massive financial crisis. In South Korea much of the blame for the country's financial difficulties—which brought the national treasury to the brink of default—was laid at the door of its system of chaebols. As the country teetered on the edge of bankruptcy, it became apparent that for the previous two decades a large chunk of the national wealth had been funneled into the coffers of the giant conglomerates in order to keep them up and running. With that support sharply reduced—or withdrawn altogether—many of the country's chaebols were forced out of business. In other cases they were reduced to mere shadows of their former selves.

BEEFS UP IE TEAM

Yun, convinced that the financial crisis was more of an opportunity than an obstacle, moved aggressively to put industrial engineering to work throughout the company. With an IE team of 120 full-time employees, Samsung Electronics already had the only IE-dedicated corporate staff in South Korea. But Yun decided the team still needed to be beefed up; the IE staff was more than doubled to 280 employees. To further instill the company's employees with an understanding of the applicability of IE techniques, Yun personally trained a total of 1,550 general managers and other executives. He also oversaw the refinement of IE principles to fit the specific circumstances of the company's operations. This gave birth to Samsung Layout Planning, which used computer simulation software to design factory layouts and give specific manufacturing operations the greatest logistical efficiency. Another by-product of Yun's all-out implementation of IE was the Samsung Production System, which, according to Minton, "incorporated various production lines and cells into a mixed-mode production system designed to meet particular customer demands" (July 1, 1999).

While others among South Korea's chaebols were foundering, Yun oversaw a 100 percent increase in productivity at Samsung Electronics in his first year as CEO. The company's inventories of finished goods were cut by a third, and its asset turnover rate rose by more than 50 percent. This was just the beginning for Yun, who reduced the company's workforce by roughly a third and replaced many senior managers with younger, more innovative thinkers. For his creative use of IE management techniques to weather South Korea's financial crisis, Yun was given the Award for Outstanding Achievement in Management in 1998 by the Institute of Industrial Engineers.

THE THREE PS

At the heart of Yun's strategic plan for Samsung Electronics were the three Ps: product, process, and personnel innovation. In the area of product innovation Yun moved quickly to extract Samsung from those businesses that were marginal or no longer producing an acceptable rate of return. As a result Samsung Electronics sharply reduced its television output and did away with such marginal product lines as dishwashers, electronic pagers, and juicers. These products were replaced with such high-tech, high-margin goods as flat-panel displays, MP3 music players, and advanced mobile phones.

Among the processes streamlined by Yun was the global supply chain, which was changed from a monthly to a weekly system. Under the new system the company shifted focus from make-to-stock to make-to-order production. With the reduction in inventories cash flow improved. In the area of personnel innovation Yun instituted a system of global product management under which each of Samsung Electronics' 14 divisions was directed by a global product manager who was responsible for every phase of that division's operations. Of his decision to give his subordinates greater autonomy, Yun told Minton, "I believe the organization should be simple, speedy, and autonomous. By autonomous, I mean empowering the employees" (July 1, 1999).

The company's financial performance testified to the effectiveness of Yun's policy changes. For 2002 Samsung Electronics posted a net income of nearly $5.9 billion, up dramatically from the $2.2 billion of 2001. Profits for 2003 were expected to top $5 billion, down slightly from 2002 because of sharp declines in chip prices. Analysts predicted a strong rebound in the company's net income for 2004, forecasting a profit of $7.5 billion or higher.

Yun was married and the father of two children, a son and a daughter. His achievements in masterminding the sharp turnaround at Samsung Electronics were widely recognized both inside and outside of South Korea. In 1990 he received his government's Bronze Medal for Contribution to Industry; two years later the South Korean government honored Yun with a Gold Medal for Contribution to Industry. In June 1995 he was saluted by his alma mater, Seoul National University, which presented him with its Honorable Engineering Alumnus Award. Yun received IIE's Outstanding Achievement in Management Award in May 1998. The following year the Korea Management Association named Yun the Most Successful CEO in Korea. Fortune magazine selected Yun as Asia's Businessman of the Year in 2000, noting that the Samsung Electronics CEO "had used Asia's current chaos to reinvent a company that seemed near death" (January 24, 2000). In 2002 he was honored by the cable-television network CNBC, which gave him its Asia Business Leader Award. In its January 12, 2004, issue, BusinessWeek named Yun one of the Best Managers of 2003.

See also entry on Samsung Electronics Co., Ltd. in International Directory of Company Histories.

sources for further information

Barber, Ben, "South Korea's Troubles Are Blamed on 'Chaebols,'" Washington Times, December 25, 1997.

"The Best Managers: Yun Jong Yong," BusinessWeek, January 12, 2004.

Brooke, James, "Samsung Tries to Keep Outgrowing Economic Woes," International Herald Tribune, April 28, 2003.

Brown, Heidi, "Look Out, Sony (Samsung Aims to Be Leading Electronics Brand)," Forbes, June 11, 2001.

Dempsey, Michael, "Jong-Yong Yun of Samsung Electronics," Financial Times, February 4, 2002.

"The Future of Asia 2002: Mr. Jong-Yong Yun," Nikkei Net Interactive, http://www.nni.nikkei.co.jp/FR/NIKKEI/inasia/future/2002/2002pro_yun.html.

Institute of Industrial Engineers, "Definition of Industrial Engineering," http://www.iienet.org/public/articles/details.cfm?id=468.

Kraar, Louis, "The Man Who Shook Up Samsung," Fortune, January 24, 2000.

Lee, B. J., "The Revenge of the Nerds," Newsweek, April 1, 2002.

Minton, Eric, "A Philosophy of Change," Industrial Management, July 1, 1999.

"PICMET '03 Awards: Leadership in Technology Management," PICMET, http://www.picmet.org/conferences/2003/Awards.asp.

"The Players: Jong-Yong Yun, CEO, Samsung Electronics," Oracle, http://www.oracle.com/tvplayers/player_13/about_player_profile.html.

"President & CEO of Samsung Electronics Receives '98 Award for Outstanding Achievement in Management," Samsung, May 11, 1998, http://www.samsung.com/PressCenter/PressRelease/generalnews/generalnews_19980511_0000000078.htm.

"Samsung Group Names Jong-Yong Yun New President and CEO of Samsung Electronics," Samsung, December 18, 1996, http://www.samsung.com/PressCenter/PressRelease/PressRelease.asp?seq=19961218_0000000161&type=CorporateNews.

"Samsung Electronics Exceeds Rivals Nokia, Sony in Market Value," Agence France Press English, April 14, 2004.

"Speaker at the ICT World Forum @ CeBIT in 2003," http://www.ictwf.com/0a04/02content_main_speaker.php?speak03=026.

—Don Amerman