Managing Strategic Resources and Operations at Samsung

This report analyzes the global logistics and supply chain management at Samsung, and explores the link between Samsung's activities and managing strategic resources and operations. It discusses the overview of Samsung Group, Samsung's supply chain/logistics management, the linkage between Samsung activities and managing strategic resources and operations, and sustainability throughout the value chain.

Managing strategic resources and operations

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Contents
Introduction................................................................................................................................2
Overview of the Samsung Group...............................................................................................2
Samsung’s Supply chain/logistics management........................................................................3
Linkage between the Samsung activities and Managing Strategic Resources and Operations. 6
Sustainability throughout the value chain..................................................................................8
Conclusion................................................................................................................................10
References................................................................................................................................11
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Introduction
The primary aim of writing this report is to analyse and identify the global logistics of the
Samsung and get the insights on the supply chain channel and sustainability of Samsung
throughout the value chain in order to meet the requirements of the customer. This report
comprises of determination of the associated link of value chain of Samsung with the
Managing resources and operations theory.
Overview of the Samsung Group
Samsung group is leading financial, manufacturing and service conglomerate in the global
market and was founded in the year 1938. The Samsung group offered the services on areas
like Chemicals, machines, commercial and textiles. Further, the Samsung Electronics was
founded in the year 1969 and has started with producing the TV. In the first half of year 1990,
the Samsung Electronics commenced with producing hard drives and memory for personal
computers. The Samsung Electronics nowadays is a global IT leader and comprises of three
main divisions that is, device solution, consumer electronics, and IT and mobile
communication. Each division of Samsung Electronics is accountable for its own assembly
plants and factories. It has been studied that no outsourcing of Samsung Electronics of
assembly takes place. The best income generator of the Samsung is IT and mobile
communication which accounts for approximately 50% of annual sales of Samsung. This is
because the mobile phones of Samsung hold new position as a shareholder in the Global
market. In the year 2010, the Samsung has launched its android smart phones which helped in
increasing the profit margins and the annual sales in the global market. The smart phones of
Samsung are regarded as one of the best and are now in the fifth generation. This helps the
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Samsung to improve their sales; however, due to the domination in the global Smartphone
market, the Samsung faces the barriers (Lee, 2016).
Samsung’s Supply chain/logistics management
The value chain emphasizes on the practices commencing with raw materials until its
conversion into final products or services. The definition of value chain is proposed by Porter
which comprises of all the activities to create, produce, deliver, and support the service or
product. There are two categories of value chain. That is, primary activities and support
activities. The primary activities comprise of distribution, operations and sales while the
support activities comprise of human resources and Research and Development. The analysis
of value chain is performed to determine the competitive advantage sources and it comprises
of value creating activities of all the participants of the industry. The value chain model can
be understood through the fishbone diagram (Ran, 2009).
The Logistic management is a section of supply chain management and is a link which plans,
controls, the effective and efficient storage and flow of services and related information
between the consumption and origin point to meet the requirements of the customer. This
includes the flow of products or services in both the service and manufacturing sectors and
does the characteristics of Logistic management are unified management, dependency on the
technology as the force which effectively associate from the supplier to the consumer, overall
purpose of the organisation, emphasis on the complete Logistic channel and achieving the
satisfaction of the customers (Antica, 2014). The supply chain management is an innovative
and comprehensive activity comprising of system, process, and governance which optimises
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the logistics, purchasing, manufacturing, marketing, sales and service over the complete
supply chain. The supply chain management helps in offering the competitive services in the
Global market like supply chain management analysis, integration establishment, and the
process innovation (Kaur & Arora, 2015).
The Samsung operate their supply chain management while assessing their suppliers and
continuously supporting them to create the mutual growth and competitive edge. The
Samsung follows the five criteria for the supply chain management strategy which can be
seen in the below image.
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The company secures all the competitive edge in terms of human resources, equality, delivery
and cost in order to improve the efficiency while utilising their suppliers and building a
corporate ecosystem that helps in the sustainable growth (Shin & Kim, 2015).
The company also abide by the international regulations and Standards in human rights
management areas, ethics, work with an objective to create transparent and open
accountability system management that deals with all stakeholders within the supply chain.
The company also work with Eco partners certified suppliers in order to manage and assess
the impact on the environment that may occur due to their manufacturing process, raw
material different components (Chul, 2013).
The Samsung aims to create the strategic partnership on mutual trust with top performing
suppliers. Therefore, the company implement the transparent and fair process in supplier
registration system process for new suppliers while assisting them in performing annual
assessments and reinforcing relevant risk by improving the competitive edge (Dodgson &
Kim, 2011).
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Linkage between the Samsung activities and Managing Strategic Resources and
Operations
The operations management in any organisation is managing the internal aspect of the
management process and is like a deck of clients and employers and managers, and also helps
in managing the requirements of the customer and deals with the satisfaction of the
customers. In order to manage the operations depending upon the theories, there are popular
approaches which the company follows. The operations management is the field that is
directly concerned with goods and services production. The strategy of the operation is
functional strategy and it is required that it helps in providing the guidelines for the
management and operation for any business (Yang, Choi, Park, & Chae, 2007).
The Samsung followed the six Sigma and supply chain management theories to manage their
resources and operations. These approaches assisted the managers of Samsung to create the
standards and the agreement between the employees and employers while considering the
demand of the customer. The Samsung group has complex and large global supply chain and
despite the usage of supply chain management solutions and the innovation process, in order
to foster the business operation, the Samsung in the year 2004 still felt that it's necessary for
them to improve their supply chain operations. Therefore, in the early 1990s, the senior
management of the Samsung group decided to focus on the six Sigma and supply chain
management which the company believe were based on qualitative strengths, established HR
Framework, sustaining results and project discipline areas (Hitt, Xu, & Carnes, 2016).
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The goal of Samsung operation management is to improve their profit margins and meet their
goals of delivery, quality, cost and the satisfaction of the customers. The Samsung
emphasizes on the different business areas like telecommunications, applications, and
semiconductor through latest trends in the operations (Emerald Group, 2007).
The Samsung electronics analysed that through the interaction with few suppliers, tight
relationships and spreading the entire philosophy outcomes in creating effective results.
These helps in increasing the productivity while utilising and organising the technologies,
process and people in new ways. The limited suppliers consistent with just-in-time features
which allows better utilization while reducing and eliminating the variations and making as
they can deliver the parts on time. The approach of Samsung is to achieve the goal and
implement the strong standard in evaluating the suppliers’ quality products which does not
only include third party suppliers, but also their own subsidiary companies. Samsung realises
that there is improved reliability and consistency with Limited number of suppliers. Samsung
believes that while depending upon the suppliers especially those who comprehend the
Samsung as an outcome of strong relationship, helps in gaining the competitive advantage
(Bourne, Mills, & Faull, 2013).
To improve the profitability level, the companies like Samsung always look for the methods
to streamline the cost and eliminate the waste. The Samsung utilizes the standardized process
of resource management through the improved visibility and control of the resources which
assist the Samsung to flourish its business and make the brand reputation. The standardized
resource management system of Samsung helps it to use the resource pool on regular basis
which helps in improving the revenues and ensuring that the most valuable resources are
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utilised by the company completely. While managing the resources, the Samsung manages
the conflicting resources as it influences the revenues and reputation of the company.
Samsung uses the efficient resource management system by hiring the skilled operation
managers who create the effective Strategies for the resource allocation in a way that
minimises the conflict between the resources. The Samsung improves the assigned task
delivery which helps in reducing the procedures cost and increases the profit margins through
the effective delivery mechanism. Samsung also reduces the delivery cost and manage the
resources perfectly. The resource management software is also utilised by the Samsung in
order to reduce the errors in the management process and eliminate the resource
administration cost. As there are always the changes in the technologies, the Samsung look
for better price differentiation strategy that helps in the success of the organisation and
implementing the strategies to get the great share in the market. Therefore, the effective
supply chain management is implemented by the Samsung in order to streamline the flow of
products or services that reduces the product cost (MHEducation, 2015).
Sustainability throughout the value chain
The sustainability management at the Samsung aims to build the integrated values. The
Samsung not only creates the economic values by increasing and improving the shareholder
values and the profits but also takes a greater accountability to build the social values as a
Global Citizen. The Samsung delivers the innovative services and products along the value
chain which is dependent on the core values of the Samsung while generating the values in
different fields like environment, society, and economy. The Samsung monitors the non-
financial and financial influence that the company exert on the society so that the company
can improve their positive impacts while creating the value through the sustainable
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management. The Samsung aims to build the environmental and social values as well as the
values related to the economy through their effective sustainability management in order to
contribute to the global society betterment. As the environmental and social values are
complex, the Samsung follows the approach of quality over quantity in managing and setting
their goals of sustainability management (Varma & Ravi, 2017).
The company have implemented the true value method in the year 2016 which was proposed
by KPMG that monitors the environmental and social indicators so that the company can
visualise their values that they create. The negative and positive indicators assess the
company to calculate the social values and monitor if they have reduced or created the values
in the past year. This approach helps the company to go beyond their financial values which
are generated through the strategies of the business and comprises of social and socio-
economic to locate entire picture of the value created by the company. The below figure
shows the sustainability management value of the Samsung:
(Samsung, 2019)
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Conclusion
It can be scrutinized from this report that Samsung focuses on the Six Sigma in order to
manage their manufacturing processes. The main idea of Samsung behind utilising the Six
Sigma is minimising the defect rate modelling. For the operation management, the Samsung
utilizes the supply chain management as the company have more complex system. The
supply chain management helps the Samsung in monitoring products or services of the
Samsung from its creation to the meeting the demands of the customer while analysing the
important factors to manage the operations which impact the cost, efficiency, and profits. It
has also been studied that Samsung not only creates the economic values by increasing and
improving the shareholder values and the profits but also takes a greater accountability to
build the social values as a global citizen.
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References
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