LG Electronics - Total Quality Management

LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics, mobile communications and home appliances, employing more than 84,000 people working in 115 operations including 84 subsidiaries around the world. With 2008 global sales of $44.7 billion, LG comprises of five business units – Home Entertainment, Mobile Communications, Home Appliance, Air Conditioning and Business Solutions. LG is one of the world’s leading producers of flat panel TVs, audio and video products, mobile handsets, air conditioners and washing machines. LG has signed a long-term agreement to become both A Global Partner of Formula 1(TM) and A Technology Partner of Formula 1(TM). As part of this top-level association, LG acquires exclusive designations and marketing rights as the official consumer electronics, mobile phone and data processor of this global sporting event.

According to organization leadership structure LG fallow Team Management techniques they are job centered as well as employee consideration (9, 9). According to the organization structure, LG Company Quality management is not the task of the senior management only but all the people from top to bottom level should be involved in it. In this regard, LG trains its employees regarding quality management, maintains a positive work environment in which everyone is respected and innovation is appreciated as this is the main thing that will give the company an edge over others.

By 2005, LG was a Top 100 global brand, and in 2006, LG recorded a brand growth of 14% now the world’s largest plasma panel manufacturer its affiliate, LG Display, is one of the largest manufacturers of liquid crystal displays. Also in 2006, the company’s mobile phone division, LG Mobile, marketed the LG Chocolate phone, changing the company’s image of the maker of thick 3G phones. It now focuses on the design and marketing of phones such as the LG Shine, the LG Glimmer and LG Pride (KE850). As a result, the company was picked as “The Design Team of the Year” by the red dot design award in 2006~2007 and is often called the “New Apple” in the industry and online communities.

COMPANY IDENTITY

SYMBOL MARK

The letters “L” and “G” in a circle symbolize the World, Future, Youth,

Humanity and Technology. Our philosophy is based on Humanity. Also, it

Represents LG’s efforts to keep close relationships with our customers in

The world

INTRODUCTION

The LG Group is a South Korean multinational, third largest Corporation that produces electronics, chemicals, and telecommunications products and operates subsidiaries like LG Electronics, LG Telecom and LG Chem. in over 80 countries. LG is the world’s leading producer of mobile handsets, flat panel TVs, air conditioners, front-loading washing machines, optical storage products, DVD players and home theater systems. LG Electronics Mobile Communication Company (LG) is a leading producer of mobile handsets. LG creates handsets that provide optimized mobile experience to customers around the world with its cutting-edge technology and innovative handset design capabilities. With advanced wireless solutions, LG is rapidly expanding its presence and market share globally.

Group founder Koo In-Hwoi established Lak-Hui Chemical Industrial Corp. in 1947.In 1952, Lak-Hui (pronounced “Lucky”, currently LG Chem) became the first Korean company to enter the plastics industry.

LG is one of today’s leading brands in electronics, from personal to home entertainment audio and video system, communications gadget, broadcasting and other professional electronic devices, personal computer, digital camera, to robots.

MISSION STATEMENT

Our mission is to be recognized as the leader in development of global communications products, and to sustain our leadership position in Korea’s telecommunications market. We lead this market through innovation and outstanding passion for excellence and product performance to deliver on our promise to keep ‘Accelerating Opportunity’ by providing the best communication products to enrich the human experience

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VISION

A company providing the best communication products to enrich the human experience LG Electronics continues to pursue its 21st century vision of becoming a worldwide leader in digital-ensuring customer satisfaction through innovative products and superior service while aiming to rank among the world’s top three electronics, information, and telecommunications firms by 2010

On our way, we hold tight to a philosophy of “Great Company, Great People,” underscoring our belief that only great people can create a great company.

LG strives for greatness in what we’ve identified as our three core capabilities:

Product Leadership, Market Leadership, and People Leadership-each strength a key part of realizing our growth striate

CORE CAPABILITIES

Product leadership refers to the ability to develop creative, top-quality products, using specialized new technologies.

Market leadership refers to the ability to achieve top ranking, worldwide, thanks to a formidable market presence in countries across the globe.

People leadership refers to the market dominance achieved by selecting and nurturing talented team players able to internalize and execute innovation across the board.

GROWTH STRATEGIES

Fast innovation calls for securing a competitive edge over the competition by setting-and meeting-the highest of goals in all realms of innovation, by at least 30%. This applies to new-product development and unveiling, innovation in design and technology-as well as product sales, market share, and corporate value.

Fast growth is the result of implementing strategies designed to swiftly expand market size and earnings, with and eye toward monetary growth.

CORPORATE CULTURE

Though a company can boast stellar management strategies and an outstanding and talented pool of employees, it is still necessary to adopt a corporate culture that can fully unleash the power of these capabilities.

VALUES

Integrity

We behave with integrity and in an ethical manner in everything we do and say, thereby earning and maintaining the trust and respect of customers, shareholders, suppliers, colleagues and partners. With achieve this through transparency and accountability of each action taken by the management and our skilled employees.

Excellence

Our commitment is to demonstrate excellence in all spheres of our work and in our interactions with customers, shareholders, suppliers, colleagues, partners and communities. In addition, we commit to exercising judgment, professionalism, rigor, self-discipline, perseverance and team spirit.

Customer First

We promote a customer-centered culture that emphasizes outstanding service and supports our commitments at every level of our organization.

Innovation

With 70% of our talent dedicated to R&D, we’ve created a bright culture of innovation. This culture, fed by our inclusion in the fast-paced macro environment of the Korea Technological Incubator and our early adopters’ mentality, has helped us foster an environment of R&D leadership.

Leadership

We’ve aligned our strategy to develop profitable products and projects to benefit and enrich people’s life. Our rapid transfer from innovation to commercialized products gives us a market advantage. We will continue to achieve leadership through our differentiation strategy, our ability to continually reinvent

Ourselves and our passion for innovation. We will build on this passion to continue our market leadership as a company, benefiting both our customers and channel partners.

Respect

Getting and keeping the right talent is vital for us, since our people are the lifeblood of our success. To remain a competitive and fair employer, we encourage freedom of opinion and expression, and foster intensive dialogues between the different levels of the company to eradicate artificial barriers that might otherwise impede equal employment opportunities. We do our best in providing an enjoyable and safe working place, and continuously update action roadmaps to continuously motivate and develop our valued employees. Together, we help our people realize their potential for passion, creativity and a global mind.

MANAGEMENT AT LG COMPANY

Management at LG Company as fallow

Executive Committee

LG Inc Executive Committee includes nine senior leaders representing the Company divisions and corporate functions. The Executive Committee is responsible for reviewing LG Corporate Responsibility (CR) approach and related company performance, for approving the CR report, and for ensuring that CR matters are considered in business decisions

Social Responsibility

The most important phase for every company related to continuance improvement in quality the company must be have a committee to seek the social responsibility. Committee is responsible to control those activities which is against law of the country and human life protection

LG Inc has eight independent directors comprise LG Board Committee on Public Policy and Social Responsibility. The group is responsible for advising the Board of Directors and management on Company policies and practices that related to the Company’s responsibilities as a global corporate citizen.

The Board

The Board meets four times a year or as needed to review Company progress on a wide variety and quality improvement. The Board has established several committees to enable it to fulfill the obligations to corporation stockholders.

Corporate Management

LG Inc Chairman, President and CEO are accountable and answerable to the LG Board. Executive Committee meets monthly and as needed to review Company progress and activities in the company

GOVERNANCE AND RESEARCH AGENDA

The Research Management Committee, chaired by the Executive Vice President and President, they reviews and approves the Company’s research relayed to new technology and innovation in electronic world and the objectives and strategy of new technology and innovation, such committees are together annually.

TOTAL QUALITY MANAGEMENT

Is a management philosophy that seeks to integrate all organizational functions it focus on customer needs, wants, and organizational objectives? TQM empowers the Total organization, from the employee to the CEO, with the responsibility of ensuring Quality in their respective products and services, and Management of their processes through the appropriate process improvement channels. All types of organizations have deployed TQM, from small businesses to government agencies like NASA, from schools to construction firms, from manufacturing centers to call centers, and from dance sequence to hospitals. (Copied from LG site)

BENEFITS OF TQM

After many research and book study I have realized that TQM is base upon continuous Quality improvement, employee participation and involvement network, customer satisfaction, workforce (employee) satisfaction, on time delivery, productivity, communication, profitability, and market share

These are the benefits of Total Quality Management (TQM)

PURPOSE OF TOTAL QUALITY MANAGEMENT

The main purpose of TQM is to provide a quality product and service to customers, for the purpose to increase productivity level and lower cost

The other purpose of TQM is to provide higher quality product and lower price and to achieve the objective of the profit and growth with greater case. In addition the work force will have job security which will create a satisfying place to work.

LG electronic TQM based upon as fallow

Quality Standards

LG Inc. establishes and maintains a set of systems, encompassing policies, processes and procedures, required for the effective planning and execution of business activities to ensure product quality. They continuously work to enhance and integrate the systems to identify measure, control and sustain excellence in quality of the product. Continuous improvements in quality are achieved through auditing of their quality practices and establishment of goals, programs and procedures that enhance brand quality and ensure current production Practice compliance. Progress against these goals is regularly reviewed by divisional and corporate management.

Education and Training at LG Company

Employees are provided with ongoing educations and training programs on quality so that they can perform their duties effectively. Furthermore, the effectiveness of the training programs is also monitored.

Management

The Senior Vice President, of LG Quality, is the senior production manager official who provides direction to manufacturing managers on programs to ensure consistent and reliable product quality and global supply.

Innovation

LG determine and develops new Electronic products to capture market share and high profit it the main focus area for LG company

Valuing Employees

Merck values its employees as their greatest asset because they are the ones who discover, develop and manufacture innovative electronic product and delivering it to

Those who need them This gives LG a competitive advantage and so the company strives to ensure that it attracts and retains the best workforce and also creates an environment that helps the employees to recognize their full potentials. Their main focus is on

9. Human Rights of Employees

LG promotes the human rights of its employees. The main focus is to encourage justice, equal opportunity and dignity without discrimination. This is a step towards promoting economic development and their philosophy is also based on humanity

TQM PRACTICES OF LG

Due to the study of different companies TQM practices I have realized that all the international and national level companies struggling to achieve target market with providing high quality and standard products.

The TQM practices which adopt by LG Company is as fallow

Benchmarking

Kaizen approach

Employee involvement

Continuous improvement:

Reengineering approach:

Customer Focus:

BENCHMARKING:

Benchmarking is the systematic search for best practices, innovation ideas and highly effective operating procedures and its considers the experiences of others (COPIED FROM BOOK)

Benchmarking is the identifying process of the best practices by competitor and market leader in different industries and then adopts those best practices OR

Benchmarking is a systematic method by which organization measure them solves against the best industry practices. It promotes superior performances by providing an organized framework. (COPIED FROM BOOK)

Benchmarking is an increasingly popular tool and it is used widely by both manufacturing and organizations and it is a common element for quality standards.

LG Inc is very active in identification and implementation of best practices of electronic industry that is why LG achieved that competitive age in the global market this time LG Inc is the third largest electronic company in the world.

KAIZEN APPROACH: (Kaizen highlites the daily activity improvement)

The term kaizen is a Japanese word adopted into English referring to a philosophy or practices which totally focusing on continuous improvement in

Manufacturing activities, kaizen typically refers to activities that continually improve all functions of a business, kaizen aims to eliminate waste OR

The Japanese word “kaizen” means simply “improvement,” with no inherent meaning of either “continuous” or “Japanese philosophy”; the word refers to any improvement, one-time or continuous, large or small, in the same sense as the mundane English word, “improvement (Google Defination)

LG is extremely customer focus and continuous improvement organization they tries to produce products which can satisfy customer’s needs and want.

LG quality control council is working to eliminate daily base weaknesses in the production processes of the organization and this is the purpose of Kaizen approach also.

They think that customer is the main pillar for the company and this is the company mission to provide quality and standard product

EMPLOYEE INVOLVEMENT:

Employee involvement is the anther important approach for quality improvement and productivity, it means empowering the employees, bring them or call them in decision making, give extreme value to them, do their respect and consider them main resources for the organization. If the employees are not satisfied and they are not putting their full effort how improvement is possible? Employee involvement is very important for the organization to meet organization goal and objectives, this techniques increase motivation level of employees. LG Inc adopting the employee involvement techniques, as described up that LG adopting

The team management techniques both job consideration and employee consideration strategy (9, 9) which employees play important roles

Benefits of Employee Involvement

As discussed up that employee involvement increase productivity level and quality improve there are some points related.

Employee can make better decision when use knowledge and experiences

Employees are more desirable to implement and support their made decision

Elimination of communication gap between decision maker (top management) and employees of the organization

Employees are better knows the improvement are Because they deal with problems daily wise

Employee involvement increase their level of motivation can utilize them efficiently

Employee better able to accept change because they control work enlivenment

Employees are frankly accept responsibility and performing their job very well

CONTINUOUS IMPROVEMENT:

Continues improvement is an effort to improve products, services, and production processes. Continuous improvement in production and services processes seek incremental improvement over the time

The purpose of Continuous Improvement Process is the identification, reduction, and elimination of suboptimal processes. (Efficiency)

The most important element of continous improvemetn is that it deciding that how to increase the velue of the delivery process output to the customere ffectively and efficiently and we can find that how much flexibility is available in the process to bring change

LG electronic company also continuous improvement based organization, they strive to achieve perfection by continuous improvement in the business and production processes.

For continuous improvement and achieve perfection they use different techniques like adopting Benchmarking, Kaizen Approach, making all process effectively, efficiently and adoptable and anticipating changing customer needs and wants.

LG Inc tries to bring change and introduce now technology.

Importance of Continuous Improvement

It emphasis of Continuous Improvement Process (CIP) is on incremental, continuous steps, avoiding quantum leaps. (Evolution)

The purpose of CIP is the identification, reduction, and elimination of weaknesses useless point in the process

The core principle of CIP is to receive response ans feedback from the customer

REENGINEERING APPROACH:

Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvement in production process and measure performance of the organization. (COPIED FROM BOOK)

The process reengineering is one approach for redesigning the way work is done to better support the organization’s mission and reduce costs. Reengineering starts with a high-level assessment of the organization’s mission, strategic goals, and customer needs.

The word of reengineering an approach aiming at improvements by means of elevating efficiency and effectiveness of the business process The word of reeingeering is for organizations to look at their business processes from a “clean

slate” perspective and determine how they can best construct these processes to improve how they conduct business.

Business Process Reengineering Cycle

Business process reengineering is also known as BPR, Business Process Redesign, Business Transformation, or Business Process Change Management. Reengineering is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, speed, and service. BPR combines a strategy of promoting business innovation with a strategy of making major improvements to business processes so that a company can become a much stronger and more successful competitor in the marketplace.

Reengineering guidance and relationship of Mission and Work Processes to Information Technology

LG electronic is also one of the reengineering preferable organization they always strive to bring change and redesign their business process and they have a special committee to reviews the whole process quarterly and bring change in whole business process.

LG has the committee which is specially working for introducing new innovation and new technology and it is organization aims and objectives to introduce new technology.

CUSTOMER FOCUS:

Customer is the other most important asset for every organization as I discussed that LG electronic company is also customer focus organization they believe that only through customers they can achieve their goals and objectives

And they give value to customers needs and wants and more prefer customer focus strategy

Customer focus means customer satisfaction, if customers are satisfied will increase buy more and frequently and it increase cash flow.

Customers are also called lifeblood of any organization

Who is Customer

Two types of customer we have normally, a) External Customer, b) Internal Customer

An external customer can defined in many ways like some one who purchase product or the one who uses the product or service, the one who influences the sale of the product and service.

An external customer is exists outside the organization is called external customer

An internal customer each worker should make sure that is quality of the product will meet the expectation of the next person or not

RECOMMENDATION

Due to my idea LG Company should add fallowing two practices also for more improvement on quality and customer satisfaction

Six Sigma

Statistical process Control

1. SIX SIGMA APPROACH: ­(The term “Six Sigma” comes from a field of statistics known as process capability studies)

Six Sigma is a business management strategy introduced by Motorola, USA in 1981

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods Six Sigma originated as a set of practices designed to improve manufacturing processes and eliminate defects. In Six Sigma, a defect is defined as any process output that does not meet customer specifications, or that could lead to creating an output that does not meet customer specification. Six Sigma’s implicit goal is to improve all processes to that level of quality or better.

Allthough Six Sigma is a registered service mark and trademark of Motorola Inc. in year of 2006 Motorola reported over US$17 billion in savings from Six Sigma.

Six Sigma Approach based upon Continuous efforts to achieve stable and predictable process results

I desire to recommend six sigma approaches for better improvement and gain profit in the competitive market

STATISTICAL PROCESS CONTROL:

Statistical process control (SPC) is an effective method of monitoring a process through the use of control charts. Control charts enable the use of objective criteria

For distinguishing background variation from events of significance based on statistical techniques

Statistical process control (SPC) is an effective method of monitoring a process … from events of significance based on statistical techniques

In addition to reducing waste, SPC can lead to a reduction in the time required to produce the product or service from end to end.

I prefer statistical process control approach for LG electronic company for more improvement, briing more change and achive their goal and objective

CONCLUSION

Keeping in view today’s complex environment and increasing competition, the need for Total Quality Management cannot be ignored. Increasing competition has made it necessary for companies to focus on customer needs and give their best shot to meet those needs. Nowadays it is more important to retain customers in addition to attracting new ones because the cost of attracting new customers is more than that of retaining the old ones. The need to maintain quality is of particular importance in case of the electronic technology industry because even a small mistake can cause the loss the whole image of the company and serious legal penalties. LG recognizes this thing and therefore is making every possible effort to ensure high technology and product quality and at reasonable prices. Furthermore, there has been an increased emphasis on conducting the business practices ethically and we can see that LG is striving to be a responsible corporate citizen through its environmental warden ship program. In order to successfully implement of TQM program all the people of the organization should be involved since quality management is not the job of a single individual but rather everyone should be responsible for it which already existing in LG electronic company.