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Samsung Electronics, is a South Korean multinational information technology and electronics information technology company, with headquarter in Seoul. Lee Byung chulin founded Samsung in 1938 in the form of a trading company. In the late 1960s Samsung entered the electronics industry and in the mid-1970s the construction and ship building industries, where it succeeded as a company. Samsung went into many sectors in the next three decades, sectors such as clothing, insurance agencies, food processing, securities and retail. After the passing of Lee in the year 1987, the company was divided into 4 groups– Shinsegae Group, Samsung Group, CJ Group and Hansol Group. In 61 countries, all over the world, Samsung owns assembly plants and sales systems and employs about 160,000 people. The backbone of the company is mostly electronics, especially semi-conductors and cell phones. Sales income of Samsung in the area of LCD and LED screens as well as memory chips has risen to the number one spot in the world.
The main unit, Samsung Electronics Company (SEC), was one of the two unique manufacturing companies in the world in year 2004 with a surplus above the value of $10bn. Many look upon these achievements as reflecting an ongoing and persistent effort at Samsung to change its way of conducting business to a positive way. In recent years, business innovation at Samsung has been supported by SCM and six sigma. Samsung Group of companies owns big, complex, worldwide supply chains when it comes to the goods it makes and makes mass use of SCM remedies and process innovations to support and enhance its operations. Advance planning and scheduling (APS) systems have been used by SEC since the 1990s and have the company’s success have been rewarded via multiple achievements in the domain of operational excellence.
Recently, Samsung Electronics was ranked 7th in a respected analyst’s ranking of the global top 25 companies in supply chain excellence. Samsung maintain the top position in the international smartphone industry in the 4th quarter, but with only a small lead of 0.2% ahead of Apple Inc. Samsung owns 32% of the international smartphone market in front of its rival Apple Inc., which owns 12%, according to the latest research report from Gatner .(Business Insider 2013)
Competitive Priorities of Samsung
Competitive priorities denote a strategic emphasis on developing certain manufacturing capabilities that may enhance a plant’s position on the market and they are key decisions variable for operations managers and researchers. This affects decision on the production process in terms of capacity, control, technology and planning (Skinner 19)
Consequently, cutting-edge companies are dumping ambitious five-year plans in favour of introducing new initiatives on a continuing basis. The challenge lies in putting your faith in suppleness. (Business Digest, 2013)
- Think transitory competitive advantage
- Design projects in an open atmosphere
- The strategy is based on innovation
Innovation is vital for evolution and survival of a company. They lay emphasis, management, selectivity, project initiation and mobilisation at different levels and based themselves on three priorities which are:
- Making an environment to enhance innovation
- Sensible innovation: Build on the most appealing ideas that meet the recommendations.
- Assessing all the stages of the innovation process:Before the introduction of the product, the issues are assessed instead of just looking for facts about the products.
- Goals to reduce GHG emissions
Samsung Electronics acknowledges that fight against climate change and other international issues are the responsibilities for the companies and the government.
- Financial Strategy
In order for the company to stay on the right way financially, the financial strategy which covers many aspects was given a careful consideration and was well monitored.
Explain why operations management is important to the company and how it supports the company in achieving its priorities
Production management is defined as the application of management principles to the production function. In other terms, it involves treatment of organising, controlling, planning and leading to the production process, in which resources are transform into more valuable stuffs. Production and operations management are distinguished based on tangibility of finished goods and services.
Operation managers are responsible to take multiple decisions when it comes to the production process.
Decisions and actions taken by these managers concerning the functions of production systems can be separated into 3 categories namely the operating decisions, control decisions, and strategic decisions.
Operation Managers of Samsung electronics perform these three functions:
- They have the responsibility for managing the plans, the quantity or number of goods or raw materials levels and offer through the stock to distinctive records.
- They are additionally responsible for the direct utilization of financing and acquisition.
- They are accountable for controlling the business everyday with the supply chain, sales and marketing department.
Through operation management the company is able to take better decisions that will help differentiate itsself from its competitors in the market.As shown below the three categories of decision making can proved to be really very useful to samsung (R.Sendamiztchelvan)
Significance of Production Purpose to Samsung
Production function may present competitive advantageto a company in the following ways (Thamizt)
- Shorter new-product-lead time
- More inventory turns
- Shorter manufacturing lead time
- Higher quality
- Greater flexibility
- Better customer service
- Reduced wastage
Describe the features of the company’s operation which reflects common operation management practices.
Samsung is regarded as one of the globe’s principal providers of digital technologies and digital media so, as a result, anywhere the term Samsung will be heard or anywhere there is a promotion that are being projected by the Samsung, many people will instantaneously be interested and switch their attention to see with what Samsung is coming as an innovative product since theirs advertisements are normally about new product that will be launched in the marketplace. This type of product that will certainly be interesting to many different customers as they are accustom to the idea that Samsung brand advertise about high quality and innovative gadgets and products.
Samsung Company strategy is to form plans in products productions that will attract the attention of the public and then by announcing a never seen before product line, they are work on marketing the product in such a way to encourage sales by creating an absorption of attention and interest of the public towards the product. The step that Samsung has to undertake is that of keep its standard constant so that the loyal customers that they gathered over the years do not drop them and keep the sales up. (Procter and Gamble)
One of Samsung’s top targets of the operations management is to keep the company stable and reliable as the goal of Samsung is to give high quality products which has a flexibility when it comes to its functions and usages thus keeping the clients satisfied when they are using the product. The moment this target is reached, it goes without saying that Samsung’s sales and revenues will rise. Samsung is not only successful in only a specific field but also in many other fields such as the manufacturing of LCD, semi-conductors, telecommunications, globalisation and so on.
Samsung did not just developed its Research and Development aspect in order to keep the company’s stability in the digital media business, the operations management, have also used various technologies and tools in order to keep the focus on the business production and product management. Thanks to this, nowadays, Samsung is known as one of the companies which is very powerful and has high standards when it comes for the designing and quality of its products.
Highlight some of the issues experienced by the company and how operation management can help in resolving these issues.
Research shows the sad list of accidents in the workplace at Samsung’s facilities and this is a big negative for the company. The company has always mandated and asked for improved operations when it comes to its suppliers and asked for the employees to be trained in case of an emergency and the provision of safety equipment’s such as evacuation maps and fire extinguishers to be made. In recent years, Samsung has fixed 1,934 work-threat issues which were found in its manufacturing facility that were pinpointed by the Ministry of Environment. Samsung has owns 2000 well trained safety inspectors who are responsible for the safety of the workplace at the companies’ manufacturing plants which consists of a leak-response unit and specialists on dangerous chemicals. (The Verge)
Samsung has a does not tolerate inhumane working environments for its employee and its suppliers are believed to have the same policies and correct any issues regarding this matter before dealing with Samsung if not, Samsung threats to stop dealing with them. The CEO Oh-Hyun Kwon brings the Sustainability report by stating the company will be using it as a guidance for any ventures that Samsung will be going or to rectify issues it may face such as workforce issues in areas such as Brazil.
Samsung provide online shopping as well for its customers to be able to shop online. The company also People can buy goods on internet as well. They may also maintain negative conversation cash cycle of the particular brand. The firm must receive payment before they have to pay for new resources. They can use time management. They must be able to provide their products (electronic goods) in the right time, right and acceptable prices on track locations. (Practitioner’s corner, 2007)
The company should increase its financial shareholders by marketing theirs shares at a constant value and must keep the focus on keeping the standard of the technology that its customers and clients are looking for. Samsung provides aftersales services and offer warranties on its products and customer insurance on the products it sells.
For Samsung be the world best they have to diversify their marketing strategies that is they have to change the way they advertise theirs products based on the demographic, culture and so on of specific countries with new designs, additional features or lower prices.
With performances and level of skills of its employees being one of the best in the world, Samsung shows that they can become the leaders in electronics with unique designs and innovative products. Samsung makes the same product by with different designs and colour such as for the Samsung S3 which came in 3 colours and two models and all the information of these products can be found on theirs website which is very convenient .(The Verge, Sustainability Report )
Process Map of Samsung
Managers of manufacturing companies tend to choose bureaucracy as the basic strategy when it comes to structure they want for minimising the cost of production. This type of strategy is preferred mostly when the same product is being produced on an everyday basics in huge amounts as a bureaucratic organisational structure gives an effective production strategy with high formalisation and regulated operations. Similar in large production companies it is the separation of work activities into specific departments that brings lower cost for labours as they are well trained in a specific domain or department and need less general knowledge and talent to do the work properly thus the cost for both lower and middle level managers are also reduced as the decision making process is centralized..(RITM, 2013)
Samsung is a well-known brand for the service and design it provides all around the globe. They have a well-trained and well-kept army of employees, good and countable R&D team to ensure product innovation. A liable and answerable slant to enterprise, international citizenship and globalisation with partners and customers. Samsung will surely be taking the world in an enlightened direction for the next generation.
Samsung’s main objective is to be the only best ‘digital electronics company’. It obeys with the low and ethical care standard environmental including health and safety. Known as an eigenvalue organised culture and for the shareholders of client, other stakeholders, employees, citizens of socially responsible co device. It consistently tries as best marks in the sphere of electronic materials over the world with the aim of improving its size, price quality, capacity or power devices.
- Mehdi Ramdani (2013) ‘Leading with transitory competitive advantages’,Business Digest,17 September,
- ThamitzOperations Management ,Available at:http://www.scribd.com/doc/41669480/Operation-Management-Notes(Accessed: 30 March).
- Renee Kim (2007) ‘Practitioner’s Corner- Problems and Perspectives in Management ‘,Samsung’s Competitive Innovation and Strategic Intent for Global Expansion,5(3), pp. 131 -136.
- Companies structure 2015 [ONLINE] Available at: http://www.slideshare.net/agrawall/companies-structure. [Accessed 28 March 2015].
- Vlad Savov ( July 1, 2014 )Samsung finds widespread labor issues among Chinese suppliers,| The Verge. Operations Management and Operations Strategy at Samsung | HR and Marketing Ideas. 2015
- Management and operations of Samsung electronics,Available at:http://www.ukessays.com/essays/marketing/management-and-operations-of-samsung-electronics-marketing-essay.php#ixzz3VecJpTfb(Accessed: 28 March).
- Proctor and Gamble (2013)Operations Management and Operations Strategy at Samsung – Available at: http://marketinghrdpresentation.com/apps25/2013/07/30/operations-management-and-operations-strategy-at-samsung/#sthash.lD1YmAHH.dpuf (Accessed: 29 March).
- Financial Strategy of Samsung,Available at:http://sales-management-slides.com/financial-strategy-of-samsung/#sthash.HSrlTs6X.dpuf(Accessed: 30 March).
- Pearson Education (2007)Supply Chain Management, 3 edn., Singapore: 1
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