MAN308 Operations Management: Samsung's Business Success

This essay examines the impact of various challenges on Samsung Electronics' operations management, including changing technologies, globalization, customer expectations, job designs, quality management, and global manufacturing. It discusses how these factors influence Samsung's strategies and explores key areas of operations management, such as goods and service design, supply chain design, and inventory management. The essay analyzes Samsung's approach to innovation, supply chain collaboration, and quality control, emphasizing the importance of agility and adaptability in a rapidly evolving market. It also highlights the significance of effective supply chain design and inventory management in mitigating risks and ensuring timely product delivery. The document is available on Desklib, a platform offering a wide range of study resources for students.

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
Operations Management at Samsung
Student’s name
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OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
Table of Contents
1. Introduction.................................................................................................................................. 3
2. Task 1.............................................................................................................................................. 3
2.1 Changing Technologies.................................................................................................................. 3
2.2 Continued Globalization of markets including 1st and 2nd world entrants.................4
2.3 Changing customer expectations............................................................................................... 4
2.4 Changing job designs...................................................................................................................... 5
2.5 Quality management...................................................................................................................... 5
2.6 Global manufacturing.................................................................................................................... 6
3. Task 2.............................................................................................................................................. 6
3.1 Goods and Service design............................................................................................................. 6
3.2 Supply Chain Design....................................................................................................................... 7
3.3 Managing inventories.................................................................................................................... 9
4. Conclusion...................................................................................................................................... 9
References............................................................................................................................................ 11

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
1. Introduction
Samsung is a south Korean multinational company comprise of multiple affiliated companies
under it like Samsung electronics, Samsung Insurance, Samsung engineering, Samsung Heavy
industries to name a few. Out of all these, Samsung electronics has the largest contribution in the
revenue in the Samsung group. Few years back, it has lost a high profile case to Apple where the
company is found guilty of copying large number of patents in its product. Apart from it, its
Galaxy note 7 also received huge complaints and there were even cases of battery explosion. All
this has impacted the reputation as well as revenue of the brand to a huge level and Apple in
mobile phone and other companies is household appliances have seen higher sales. Apart from
this, there are large number of external factors also like changing technologies, short product
lifecycle, changing consumer preferences, globalization, changing job designs, global
manufacturing that have impact on the operations of the company. Samsung has defined its
vision has “Inspire the world, create the future” in its 2020 vision booklet and is redefining its
strategy to regains its lost glory back. The purpose of this paper is to evaluate the impact of latest
trends on the future of Samsung and what should company can do to respond to the trend
effectively.
2. Task 1
2.1 Changing Technologies
Samsung also deals in electronics and supplies semi-conductors and chips to large number of
companies. As the technology is changing at a rapid pace, instead of a follower, it has to lead the
innovation. It must spent enough on research and development. Apart from it, it should also be

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
ready to response to any disruptive technology that can impact it. For instance, 3D printer is a
technology that can be a threat to its manufacturing business and thus it must consider alternative
options and should promote a culture of change and innovation in the organization (Brown,
2014). Take for example, its camera business has been impacted largely because of the high
quality of the cameras in the mobile phone. Thus, it has to be adaptable and agile and constantly
keep a watch on changing trends and consumer preferences.
2.2 Continued Globalization of markets including 1st and 2nd world entrants.
With the increase in digitalization and automation, globalization has on the rise. Small
companies and startups are giving tough competition to the leaders through the use of
globalization. For instance, Company is competing with Apple and Google but now there are
large number of Chinese companies like Xiami, Oppo that are providing large number of
features in their mobile phones at a very low price compared to top brands. Though the
penetration of these players is quite small but they should be taken seriously because they will
make the consumers demanding. At the same time, big brands also has to leverage their huge
network, after sales service, marketing as well as high quality to tackle the challenges of
globalization of markets.
2.3 Changing customer expectations
Social media has really empowered the customer. Customers are looking for good service across
multi channels otherwise they will not shy away from posting negative reviews or post in public.
The definition of agility is also changing. Each consumer is also expecting a personalized service
and various big organizations are also focusing on the individual marketing and this is made
possible by use of technologies like Big Data and Analytics that identifies the patters in the data
to generate insights. Thus, Organizations must have a dedicated social media strategy, Omni

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
channel presence, and excellent service and personalized marketing. With the new players
coming in, rise of cash rich e-commerce players, discounts, cash backs have become common
and thus it is getting difficult for the organizations to match their prices across all the channels.
Customers also expects lowest price and that too with a high degree of service.
2.4 Changing job designs
Job designs are changing with rapid development in technology. Today, most of the mundane
tasks can easily be performed by the software and thus employees can focus on the critical work
that can’t be automated. Apart from this, with reduction in monotonous jobs, there is higher
demand of skilled workers called as knowledge workers in today’s context. The impact of
changing job designs will be favorable for the organization like Samsung whose core
competency lies in innovation. Telecommuting is also a gift of today’s technology and it will
also open large pool of talents for the company as location is not a constraint in hiring when
people can work from any location (Oldham, & Fried, 2016).
2.5 Quality management
Quality Management has always been important in the history. There are numerous cases of
product recalls by Toyota, Ford and many other biggies that have dented their reputation and it
took huge effort for them to get the consumer confidence again (He Rong, & Shen, 2017).
Samsung also faced a similar issue when Galaxy note 7 has complain of battery problem
worldwide. Though Samsung do not name the suppliers but said there were 3,4 battery vendors.
In future, importance of quality management cannot be discounted even it if comes at a price
because consumers has a lot of choices today and they will not shy away change their loyalty if
they get a similar quality product at low price. It has to evaluate its supplier performance strictly

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
and also put multiple checkpoints for quality before products are finally shipped to retailers or
consumers.
2.6 Global manufacturing
Organizations are increasing their manufacturing locations as it will not only help them to get a
raw materials at a competitive price but also help in serving the local customers in a better way.
This has become a trend since the product life cycles have been reduced. It is because if the
products are manufactured at 1 location and demand is fulfilled from there, lead time will be
higher and it is possible that large number of inventory may become obsolete in a short period of
time. Thus, it is advisable to have global manufacturing location or at least in the key markets to
serve the customers better. Apart from it, organizations can also consider the locations like India
and China that offers large number of incentives and have cheap labors also. Samsung has 2
plants in China, 4 in Korea and 1 in USA ("Manufacturing Centers Locations | Samsung
Semiconductor | Samsung Semiconductor Global Website", 2018).
3. Task 2
3.1 Goods and Service design
Goods and service design is one of the most important operation management areas that can
impact the success of Samsung going forward. In this world of constant and rapid change, it
becomes increasingly critical for the businesses to continuously upgrade their products and
release new products by studying the market requirements and trends. Goods and services
designs serves many purposes like company will not only be able to provide the latest
functionalities in their products to customers but also will be able to cut their costs (Bocken, et
al., 2016). For instance, early supplier involvement during the design phase has become an

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
important trend for the organizations to cut their costs and comes with a design that is easy to
manufacture (Merilainen, 2018). Apart from it, suppliers can also be consulted so that the design
should be loosely coupled, easy to assembly and also provide the better product. Innovation has
become the key for the success for organizations like Apple that has released its iPhone version
every year to provide improved design and more functionalities (Chen, & Ann, 2016). Nokia and
Blackberry were out of smart mobile market due to lack of new product development that can
serve the latest consumer needs (Van Alstyne, & Parker, 2017). Thus, in order to remain
competitive, goods and service design is one of the most important area. Apart from this,
organizations also has to make their new product development process very agile. For instance, if
a competitor has released new product with innovative features, it will soon become trend and
raises the customer expectations and other companies also have to come up with s similar or
better features quickly to compete. Thus, organization should have good relationship with
suppliers, contract manufacturers and other players in the overall process so as to quickly come
up with a product.
3.2 Supply Chain Design
Supply chain design is another important area of operation management. It consists of buying,
manufacturing, order booking, transportation and all other aspects till the product reaches to the
customer. The objectives of supply chain management is to deliver the right product at a right
place in a right quantity in a right time. Thus, it is not a matter of just 1 organization but all the
partners have to work with a common vision to achieve the goals. It is possible that the Samsung
has shipped the product at the right time but due to challenges of logistics partner, things got
delayed resulting in excessive inventory in a system. Sometimes, there is also a delay in
obtaining the right raw material at the right time that will delay all the downstream processes.

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
Thus, effective supply chain design requires that all the partners’ work with a collaborative
mindset. There are numerous techniques like vertical integration i.e. to acquire suppliers that
supplies critical product, sharing the forecasts and other important information across all the
partners, sharing point of sales by retailers with all the partners in real time. Technology has
made this collaboration possible and there are supply chain leaders like Zara, Walmart, Cisco,
McDonalds, Unilever, amazon that has changed the entire business dynamics and has huge
competitive advantage due to their strong supply chains. If the supply chain is robust, it becomes
easy for the company to deal with uncertainties in demand and supply and provides higher
fulfillment and on time delivery of the products. There are also some supply chain strategies like
postponement, cross docking, vendor managed inventory (Waters, 2018) that can be leveraged to
make the supply chain more adaptable, agile and aligned (Dubey, & Gunasekaran, 2016).
Samsung should also revisit its supply chain like procurement process, supplier relationships,
logistics partner, strategies and ensure that there should be key performance indicators that are
holistic in nature i.e. Key performance indicators should not at the department level or at a single
company level but at the overall level so that all the partners collaborate to achieve the goal
(Stevens, & Johnson, 2016). With globalization, organization deals with large number of
suppliers and customers at multiple geographies and also high lead time of products, thus it
becomes important for them to analyze and improve their supply chain.
3.3 Managing inventories
Samsung has announced in 2016 that it is stopping the production of its galaxy note 7 due to
issues. At this point of time, if the organization has large inventory of galaxy note 7 in
warehouse, retail shops, in transit, all will become obsolete and converted to a huge loss for the
company (Ambrose, 2018). Similarly, product lifecycle has also been reduced considerably in

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
last few years with newer versions and product launches coming every few days. If there is some
game changer mobile launched by any company which has become instant hit, competitive will
suffer if their products have large inventories. As a result, managing inventories has become a
quite critical topic because organizations can’t produce less goods because that will an
opportunity loss and too much production can also be risky (Kortmann, & Piller, 2016). One way
to reduce is that companies should reduce the lead time of the product so that they should spent
minimal time in transit. Apart from it, organization can also look to setup global manufacturing
facilities or at key locations. Easy to assemble, loose coupled products and flexible
manufacturing are some other techniques. There are also advanced software to manage the
demand forecasts very well with minimal amount of error. Agility and visibility are other
important aspects to better manage the inventories. In fact, effective management of inventories
is a subset of supply chain design and the output of company’s supply chain management
strategy. This single are of operation management can provide a huge competitive advantage.
There are leaders like Zara that are known for managing their inventory very well.
4. Conclusion
This report looks at some of the important areas of the operation management like product and
services design, supply chain design and inventory management and how and why they can have
huge impact on any organization including Samsung Electronics which has been chosen for this
report. It also analyzes some latest challenges and trends like globalization, changing job design,
rising customer expectations, changing technologies and how each of them might impact the
Samsung and what Samsung should do to overcome those challenges briefly.

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
References
Ambrose, K. L. (2018). Keeping it all together: the challenge of complexity, reputation, and
supply chain crises.
Bocken, N. M., de Pauw, I., Bakker, C., & van der Grinten, B. (2016). Product design and
business model strategies for a circular economy. Journal of Industrial and Production
Engineering, 33(5), 308-320.
Brown, A. (2014). Organisational paradigms and sustainability in excellence: from mechanistic
approaches to learning and innovation. International Journal of Quality and Service
Sciences, 6(2/3), 181-190.
Chen, C. M., & Ann, B. Y. (2016). Efficiencies vs. importance-performance analysis for the
leading smartphone brands of Apple, Samsung and HTC. Total Quality Management & Business
Excellence, 27(3-4), 227-249.
Dubey, R., & Gunasekaran, A. (2016). The sustainable humanitarian supply chain design:
agility, adaptability and alignment. International Journal of Logistics Research and
Applications, 19(1), 62-82.
He, L., Rong, Y., & Shen, Z. J. M. (2017). Product Geographical Distribution under Recall Risk.
Kortmann, S., & Piller, F. (2016). Open business models and closed-loop value chains:
Redefining the firm-consumer relationship. California Management Review, 58(3), 88-108.

OPERATIONS MANAGEMENT AT SAMSUNG ELECTRONICS
Manufacturing Centers Locations | Samsung Semiconductor | Samsung Semiconductor Global
Website. (2018). Samsung.com.
Meriläinen, S. (2018). Development of Early Supplier Involvement (ESI) Process–Study for a
Case Company.
Oldham, G. R., & Fried, Y. (2016). Job design research and theory: Past, present and
future. Organizational Behavior and Human Decision Processes, 136, 20-35.
Stevens, G. C., & Johnson, M. (2016). Integrating the supply chain… 25 years on. International
Journal of Physical Distribution & Logistics Management, 46(1), 19-42.
Van Alstyne, M., & Parker, G. (2017). Platform Business: From Resources to
Relationships. GfK Marketing Intelligence Review, 9(1), 24-29.
Waters, D. (2018). Towards a Strategic View of Supply Chain Management. Global Logistics
And Distribution Planning: Strategies for Management.