OPERATION MANAGEMENT IN A MANUFACTURING COMPANY

Running head: OPERATION MANAGEMENT
Operation Management
Name of the Student
Name of the University
Author Note

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Operations Strategy at Galanz
Introduction
Galanz is a microwave manufacturing organization based in China. This organization
gained a modest start and after that, there was a supply-related issue that is faced by Galanz. To
solve the issue, the owner of the organization decided to invest in the development and
manufacturing of the microwave ovens for the Chinese market (Ng et al., 2010). Regarding this,
in this paper, some important business aspects of Galanz will be discussed briefly.
Case Analysis
Galanz was established by Liang Senior who was an entrepreneur in China. He
successfully determined potential business growth for microwave oven business in China. By
2002 Galanz saw a huge growth in the Chinese market as they were able to sell the microwaves
at a very competitive price. After getting appropriate brand recognition, Galanz also gained the
opportunity to start a business in the international market (Ng et al., 2010). Here, they also
started their business as OEM manufacturers and got the opportunity to become an OBM in the
international market.
Order Winners/Order Qualifiers for Galanz
At the early stage of development, it was important for Galanz to represent themselves as
potential microwave oven suppliers. In this aspect, it was crucial for Galanz to show the order
qualifier attribute. The order-qualifier is considered as some specific criteria that a vendor must
be having, so they qualify for consideration from the perspective of customers (Ng et al., 2010).
For the Galanz, it was the quality of their products and the capability of high volume production.

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A competitive cost can be also effective in becoming an order qualifier from the viewpoint of the
customers. Thus, it was also important for Galanz to offer an affordable range of prices.
While considering the order winner, it is a specific type of criteria which will be putting
Galanz above the market competitors. The order winner attribute will provide the reason due to
which Galanz will be able to win the order of the customers. One order winning attribute that
Galanz was having is the capabilities of low-cost production. Also, Galanz consisting cost
leadership above the potential market competitors (Ng et al., 2010). For this reason, Galanz was
eligible to sell the microwave at a very low price compared with the market competitors. Galanz
also identified that the Chinese market always seeks affordable products, and following that, they
developed cost leadership which assisted them in improving the percentage of the overall sales
and in gaining the market share.
Importance of Galanz’s operations objectives of Cost, Quality, Flexibility,
Delivery, Service and Innovations
In the current aspect, all the operations of Galanz are vital for them to keep the business
running smoothly. There is a total of six operational objectives of Galanz, which include cost,
flexibility, quality, service, delivery and innovation. While ranking these operation objectives,
the cost sits at the top. The cost is at the top rank due to the fact that when Galanz entered in the
market of the microwave oven, the first competitive strategy of them was maintaining a low-cost
line over the other market rivals. Galanz got a competitive advantage in this sector as they were
getting the facility of low-cost laborers in China. As Galanz was having low-cost labour, it was
not necessary for them to compromise the product quality to remain competitive in the market.
Their supply chain also helped them to improve the quality of the product. In this way, Galanz

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was offering high-quality products at a very competitive price range. For this reason, the quality
operation of Galaz is given the second rank (Ng et al., 2010). Also, to outperform the market
competitors, Galanz used a very smart strategy. Here, Galanz transferred the production line
from other manufacturers for gaining extra capacity and through this, they achieved economies
of scale. By the implementation of these strategies, Galanz becomes an OEM for various of well-
reputed kitchen organization and gained proper access to the international markets. In this stage,
quality operations also helped Galanz to become a well-known brand in the international market.
As Galanz become a well-known brand in the market, their businesses were expanding
with the time, and as more customers were added with their organization, it becomes important
for Galanz to provide priority to flexibility so that they can keep up their market share. Also, for
maintaining the existing market share, it was important for Galanz to create a strong distribution
network. The Galanz becomes also matured in the development process which showed them the
importance of innovation for expansion of the OBM and ODM businesses (Ng et al., 2010).
After developing their own magnetrons, Galanz again understood the importance of innovation
and they invested in the research and development. From the research and development, Galanz
successfully introduced more functions related to cooking and also improved their existing
products which helped them to gain access to the high-end kitchen appliance market.
Over the years, quality factors and the service and innovation factor of Galanz become
more important for them as they need to access the international market. So, over the years,
Galanz has given more importance to quality, service, and innovation, but the cost factor still
remains in the first rank.

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The Role of Technology in the Success of Galanz
Initially, the microwave business of Galanz was going good, but very quickly, the CEO
realized that the current business opportunity was lacking proper technology and expertise within
China. The Galanz was very much dependent on the overseas technologies for the manufacturing
of the microwave ovens. They lacked their own technology and for that, they need to important
those technologies outside of China. Even their production blueprint was also purchased from
Toshiba. The lack of technology became a vital issue for Galanz when they faced magnetron
shortage from their suppliers as most of them stopped the business process with Galanz. There
were two important reasons that magnetrons suppliers stopped the business with Galanz (Ng et
al., 2010). First, all the suppliers were failing to meet the component demand of Galanz and
secondly, Galanz was having excellent growth, which the magnetron suppliers considered as a
big threat. In this scenario, it was important for Galanz to develop its own technology to survive
in the market. So, Galanz decided to invest in creating their own technology for the development
of microwave ovens.
This investment of Galanz was positive for them. Through the investment the research
and development team of Galanz developed its own technology that allowed the organization to
expand its product variation and also introduced several new features. By performing the
research, Galanz developed new cooking functions and they also developed light wave ovens.
This research again helped Galanz to reduce the manufacturing cost of their products which
increased the market share of Galanz more (Ng et al., 2010). The new technology also enabled
Galanz to start the ODM services to the OEM customers. This process helped them to design
products so that it can fulfill some specific needs of the market. In this way, technology played a
major role in the success of Galanz.

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Competitive and Operations Strategies of Galanz
The main competitive strategy that followed by Galanz was creating distance from any
type of market competition, which was offering an affordable and high-quality product to the
customers. The main business strategy of Galanz was to develop microwave ovens in China at a
very low manufacturing cost. In this way, Galanz successfully saved any type of importing costs
and offered a valued product to the customers compared with other market competitors who were
importing the products outside of China. Galanz successfully introduced products in different
kinds of price segments. Means, high price range to low price range, products of Galanz were
everywhere (Ng et al., 2010). Also, they saturated the market by overproducing the total market
demand. In this way, Galanz assured that there are no shortages of their product in the market.
By using these two competitive tactics, Galanz achieved a cost leadership advantage over its
market rivals.
The main operational strategy of Galanz was gaining economies of scales, which they
achieved by producing the products in high volume while having moderate product variety (Ng
et al., 2010). The production line of Galanz was operating in three shifts by which they achieved
24/7 production and, in this way, they utilized full production capacity of them. As there were
not so many variations in the products, Galanz was able to keep the line changeovers at a
minimal rate. The production line of Galanz was running quite faster and in an efficient way
while they were able to provide large manufacturing output while keeping the overall cost low.
In this way, the profit margin of Galanz was increased.
The main competitive strategy of Galanz was oversaturating the current market demands
so that their products are always available to the customer while keeping the cost of the products
quite low. Here, the competitive strategy of Galanz got support from the operational strategy.

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The main operational strategy of Galanz was creating a 24/7 working environment through
which they were able to fully utilize their production line. This helped Galanz to oversaturate the
market demands (Ng et al., 2010). The operational strategy of Galanz also described that they
were having a low amount of product variation, which resulted in a minimal rate of line
changing. In this way, they were able to save a high amount of production-related costs which
enabled Galanz to offer microwaves at a quite low price tag. In this way, both the competitive
strategy of Galanz got support from the operational strategy.
Differences between OEM/ODM versus OBM
The OEM and ODM business model operated by Galanz assisted them in investing in
production operations of them while having zero investment to the overseas customers services
and distribution markets. While working as an OEM/ODM brand to other major brands, the end-
consumer marketing strategy is not required as the OEM brand does not sell the product directly
to the customers. While Galanz focused on the OEM business strategy, they need to only
concentrate on their resources for designing the product and the production line as these two
aspects of the business were most important for the Galanz’s OEM customers. Another important
advantage of having an OEM/ODM business is that it is not required to develop any type of sales
forecast as their customers will be providing the required number of products by analyzing the
market conditions and by using their own sales forecasting mechanisms.
To have an OBM business model, it is important for them to invest and transfer the
resources production lineup. With that Galanz was also need to forecast the business and
designing future planning for the business (Ng et al., 2010). Also, in the OBM business model, it
is important to manage the customer service, distribution networks and marketing segments.
Galanz was not so popular brand outside of China so, in this aspect, it was important for Galanz

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to spend a huge amount of capital for only the purpose of brand recognition. Also, it was
important for Galanz to implement high-quality sales and service for achieving the international
market share. Also, to deal with the final customers directly, it is important to implement a high
amount of product variation and lower volume batches. This process can add a huge amount of
cost to their operational strategy of low-cost manufacturing. In this aspect, it is also important to
invest in the sales and forecasting section so that it can be ensured that market demand can be
fulfilled without excessing the inventory.
OBM Business in International Market
If Galanz wants to implement an OBM business strategy in the international market, there
are various risks that are associated with it. The main risk is the conflict of interest among their
OEM and ODM customers. Also, another risk that is associated with the OBM business strategy
is poor performance regarding sales while having a higher cost of production. Though these
kinds of risks are associated with the OBM business strategy of Galanz, by proper
implementation of forecasting techniques and appropriate investments in the marketing, it can be
mitigated. Galanz was already having a good amount of international market share through their
OEM/ODM business procedures (Ng et al., 2010). While Galanz will adapt OBM business
procedures and will be investing in the international market, they will be able to penetrate
various developing countries. In this way, by the adaption of the OBM business strategy in the
international market, Galanz will be able to increase its international market share more. Also,
the R&D department of Galanz will be also helping them to continuously innovate their product
lineup and will be helping in further growth of the Galanz even more. Also, proper investing in
marketing can also help to create awareness among the customers in the international market,
which will surely increase the percentage of the overall sale of Galanz as OBM business. So, it is

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quite possible for Galanz to develop its own OBM business and they can also continue their
OEM and ODM business.
Greater Success for Galanz
Future success of Galanz is very much dependent on the business management of them.
If they can balance all the OEM, ODM and OBM business, they will surely achieve business
success in the future (Ng et al., 2010). Also, Galanz can implement a joint branding strategy to
achieve more brand awareness.
The cost leadership strategy of Galanz should not be changed. This strategy is important
for Galanz to remain at the top of the market. Also, continuous investment in R&D will help
them to produce more high-quality products.
For the prioritization of capabilities and resources of Galanz, they need to analyze their
own weaknesses and strengths. For that, Galanz can utilize a SWOT analysis. From this, they
will also be able to identify the external opportunities and which will help them to establish a
presence in the international market.
Recommendation
From the above case analysis of Galanz, it is recommended to them to start OBM
business in the international market while operating the OEM business also. In this way, Galanz
will be able to achieve greater brand recognition which will help to increase the overall sales.
Conclusion
From the above discussion, it can be concluded that Galanz is one of the market-leading
organizations for the microwave section. In this report, case analysis for Galanz has been done.

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Also, some important business cases of Galanz has been evaluated in this report. A
recommendation has been also provided to Galanz regarding the business process where it is
recommended to start the OBM business in the international market.

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References
Ng, S. C. H., Li, B., Zhao, X., Xu, X., & Lei, Y. (2010). Operations Strategy at Galanz. London,
ON: Richard Ivey School of Business.