Design and development of an improved operations strategy

Introduction

Operations management refers to the practice of designing and controlling the process of production and business operations in order to serve the customers with the best quality products and services (Hemmert, 2017). It is one of the major factors in the organisations along with the supply chain management, marketing, finance and human resource. The major functions of Operations management are such as managing the operational process, embracing product design, planning and control as well as performance improvement, supply chain management and procurement management, through which the organisations can develop their operational activities efficiently and run the business successfully. Through this study, it is possible to analyse the Operations management process in the famous organisation Samsung, which is running their business internationally with their quality products and services. The study provides a scope to overview the operational strategy, evaluating operational process and planning, exploring the functions related to supply chain management, procurement and total quality management in the company. After critical analysis, it would be possible to recommend some suitable suggestions to Samsung for overcoming the existing issues and run the operations smoothly across the world. If you require assistance with a business dissertation help, considering Samsung's operations can provide the most valuable insights.

Company Background

Samsung is group is the South Korean multinational conglomerates and in the previous year it becomes the 8th largest global brand values. It has been founded in the year of 1938, and the organisation is efficient to serve the customers across the international markets. The major products of the organisation include automotive, consumer electronics, electronic components, medical equipment, telecommunications equipment, home appliances etc., and on the other hand the organisation is also efficient to provide diverse services to the customers which are such as communication technology, health care and medical services, financial services, retail and shipbuilding services. The total revenue of the firm in the last year 2020 was up 2.8% to 212.3 billion US Dollars and net income has also been increased by 21.5% to 23.7 Billion US Dollars. Samsung has a market capitalization worth $326 billion. The organisation is hereby successful to stabilise their financial position and run their business worldwide with the best quality products and services. The organisation focuses on product design, process generation and total quality management in order to run their operations efficiently to meet the organisational vision of devoting its talent and technology by creating superior products and services that contribute to a better global society (Samsung, 2021a).

Operations Strategy Overview

Transformation process

Transformation process is the activities that transform the inputs to the final outputs. Samsung is efficient to manage the raw materials and strengthen their supply chain in order to transform the materials to produce the final goods. The presence of the brand Samsung NPD (new product development) has been initiated with the capability to manufacture the innovative electronic gadgets like television, smartphones, DVD, music systems. The company is efficient to create good operational strategy in a systematic process which includes strategic objectives, creating god corporate culture, continuous improvement through human resource management, arranging training and development programs, research and development, process of NPD, managing warehouse and controlling the production procedures withy latest design, creativity and technical innovation (Hemmert, 2017).

4V’s – operational process characteristics

As per the 4V’s, the dimensions are volume, variety, variations and visibility, which transform the resources into the outputs. The volume of the product is mandatory to produce with effective economies of scale and cost effective way. The variety of outputs and variations ion demand for their outputs is also mandatory in order to review the operational activities of the brand. The degree of visibility which the customers can acknowledge is also essential for the firm to be successful and generate revenue by delivering the best quality products and services. Samsung divides into batch wise production scheduling process for maintaining volume in the production sites, and as per the variety, Samsung is also efficient to provide diverse products to their customers. There are different software and hardware systems, as well as diverse consumer electronics products for attracting old as well as new clients across the market. The agility in output variety is facilitated by IT, latest design and sustainable raw materials. Variations are managed through mobile technology, ERP and ICT in order to ensure digital transformation and meet the market demand (Samsung, 2021b).

5 performance parameters

The 5 performance parameters are such as revenue, average class attendance, client retention rate, profit margin and average daily attendance, through which it is possible to analyse the operational efficacy of the firm. Revenue gained by the organisation was 2.8% over the year to 212.3 billion U.S. dollars and the net income has been raise by 21.5% to 23.7 billion U.S. dollars. In addition to this, in 2019, 48.5% users had revealed that, they are satisfied with their Samsung phone that number stands at 58.1% in 2020 (Samsung, 2021d). Gross profit margin of the company Samsung in the previous year was 37.24%. Through the performance indicators, it has been explored that, the company is efficient to maximise its profitability and generate revenue by satisfying its clients across the globe (Samsung, 2021d).

Optimum Process and Layout Types; Planning & Control

Process Maps and Process Types

The process maps and process types depend on the production activities and the product quality. Samsung maintains the value stream making in order to identify the raw materials and design the transformation process to develop the final output. Through this, it is possible to develop product flow, where Samsung aims at arranging raw materials, different components and parts of the products and choose the production process for manufacturing the final output. In addition to this, product flow with customer’s centred process by mobile technology is also beneficial for Samsung to track the market demand, prepare the product and deliver the best quality products to the clients within effective time (Samsung, 2021c).

Layout Types & Flow

There are several process layout and types in order to maintain the operational flow in the organisation. The operational flows are such as process layout, product layout, fixed position, group technology and cellular layout. Process Layout is related to low investment in equipment and machines and on the other hand, product layout enhances production flows and maintain the operations in a systematic way (Tian et al., 2019). The organisation Samsung focuses on customers demand and recent market flow in order to manage the product quality and operations innovatively. In this regard, Samsung focuses on product layout in order to develop diverse products and gain high competitive advantage in the electronics and communication industry across the international markets. The organisation is successful to develop diver product range and also maintain product life cycle with latest design, innovative technology and android software to meet the client expectations and provide huge range of consumer electronics products to the customers.

Planning, Control and Capacity Management

It is important to develop suitable planning, control the whole operational activities and ensure capacity management practice in the organisation to meet the strategic aim. Human resource management at Samsung is effective with ethical practice and employment rules. The organisation handles more than 287,439 employees efficiently across the globe. There are also many suppliers who handle the transformation of the products and raw materials which are required at Samsung to manufacture the final output (Tien, Van Dat and Chi, 2019). The organisational research and developmental team is efficient to instruct and guide the employees for working proficiently. Apart from that, internal training and workplace support are also beneficial to improve employee’s capabilities to perform better and meet individual responsibility. Hence, Samsung strives for innovation in its facilities to optimise capacity and process efficiency. Continuous improvement and operational planning through digital transformation further guide the employees to meet the operational planning and produce the best quality products for the ultimate users (Samsung, 2021b).

Operations Functions

Inventory Management

Inventory management is the process of ordering, storing, using and selling the company’s inventory that incudes management of raw materials, components and finished products as well as warehousing and processing. Managing inventory is important for Samsung to increase its efficacy and fulfil the demand of the customers. It further helps to maximise profitability of the business by managing their raw materials, different product parts and final goods in warehouse. Samsung utilises Just in Time (JIT) inventory management process in order to maintain the parts of the products and also final goods. It is an inventory management process for cost cutting and increasing efficacy of the production and manufacturing the final goods. For waste management and maximising proficiency of the brand to meet the client’s orders, the organisation Samsung focuses on utilising JIT technique (Samsung, 2021c).

Through mobile inventory management, the organisation also tracks the availability of the product parts for assembling the final product as per the market demand. Reducing cycle time is essential for the company, and for this Samsung utilises the SLIM model to reduce unproductive time. It also manages the product availability as per the market demand, where Samsung increases their warehouse in the 3rd quarter of financial year due to increase in customers demand (Haizar et al., 2020). Hence, research and development team is cooperative to manage the inventory process of Samsung as well as the JIT system, provides a scope to manage their stock of the products and meet the client orders within effective time. They also scan the barcodes and RFID tags to monitor the flow of raw materials and components, work in progress and finished goods. It is also beneficial for managing the inventory and ensuring an agile smart factory to serve the customers with the best quality products within effective time.

Lean Production

Lean Production is an approach of cutting the waste and maximising the quality of the organisation in order to manage the organisational activities in a sustainable way. Lean production mainly aims at cutting the cost of the operations and increasing the efficacy of production and manufacturing by waste management principles (Gholizadeh et al., 2019). RAM Mount Spur manufacturing with digital transformation as well as ensuring paperless activities through mobile device task operations, automation progress towards robotics and smart factory efficacy through mobile technology are there to reduce waste and maximise efficiency of the organisation to ensure lean management. For example, Drop-safe, shatter-resistant devices, like Samsung's Galaxy XCover Pro is another innovation to maintain lean system and produce the products in a cost effective way. Samsung also focuses on total quality management which helps in lean management. The innovation through mobile technology and developing sustainable products are effective for maintaining lean and develop creative solution for securing future sustainable development (Samsung, 2021d).

Supply Chain & Project Management

Supply Chain management is the maintenance of the flow of goods and services that includes all the processes that transforms the raw materials into the final products. It is important for the multinational corporations to handle global Supply Chain in order to gain competitive advantage by running their operations proficiently (Bazmohammadi et al., 2018). Samsung enjoys the global Supply Chain network in order to arrange the raw materials and manage the suppliers with continuous cooperation and partnership. Hence, the organisation focuses on Collaborative Planning Foreseeing and Replenishment (CPFR) strategy to create strong supply chain network. The countries like US, China, Korea, Japan, and Taiwan, as well as Vietnam, are the major leading countries where the Samsung suppliers are located. The raw materials that the brand uses are copper, gold, silver, and platinum. For developing sustainable supply chain, Samsung focuses on major three components; economic, social and environmental, where collaborative partnership model is beneficial for Samsung to manage the suppliers across America, China and other countries around the globe.

Crating safe working environment, operational strategy to support the global suppliers, collaboration, and conflict mineral management are also beneficial to retain the experienced suppliers. Samsung also work with the Eco Partner-certified suppliers in order to manage the environmental impacts to enhance the manufacturing process. Moreover, the international standards and regulations are maintained well by the human rights management work environment, ethics and values creation through which Samsung aims at developing transparent and accountable system, for engaging with the suppliers across the international supply chain network. Samsung is also efficient to maintain the cost of operations, delivery and quality of the products which is helpful to maintain global supply chain and maximise the synergy, speed and efficiency with the suppliers in order to create a corporate eco system that enables sustainable growth (Samsung, 2021d).

Recommendations for improvement

Due to lack of time management practices and the influence of social and environmental sustainability, the organisation must focus on JIT technique for warehouse and lean management. It would be possible for Samsung to deliver the products in a cost effective way within specific time through track locations.

The brand must redesign their marketing and promotional activities to promote their digital transformation and latest product innovation. There is lack of marketing tactics, for which the company may suffer in retaining the clients worldwide through utilising mobile application and organisational website, it is mandatory to promote the products in the international electronics and communication industry.

Samsung must focus on utilising the electric cars for green supply chain management, as well as utilise renewable energy resources so that the sustainable solutions can be developed. Samsung needs to meet the 100% renewable energy through reducing greenhouse gas emission, energy saving principles, reducing the paper in the production and manufacturing units and waste management.

There is requirement to run shorter and tighter batch of Samsung mobile phones in the assembly line operations. It is essential to manage capital and maintain the warehouse and operations smoothly. Samsung must focus on product diversification strategy for providing diverse range of consumer electronics products, television and DVD and there so that the customers can acknowledge the product range and choose the right product as per their choice and preferences. In this regard, the batch production method and NPD technique would be beneficial for Samsung in near future.

Conclusions

It can be concluded that, Samsung is a worldwide famous brand with its innovative product and service design, reliable product innovation, responsible approach towards the stakeholders, effective human resource management and digital transformation. These strategies are beneficial for Samsung to develop strong corporate bonding with the customers, employees, suppliers and other stakeholders of the company. Through the strategies, the mission of Samsung to be the best digital electronics company would be successful with sustainable solution and ethical practice. Through the above mentioned strategic recommendations, it is possible for the organisation to increase its visibility and gain high competitive advantage in the global electronics and communication industry. Through digital transformation, mobile technology, product diversification, choosing the operational software would be the best strategic recommendations for Samsung to gain market share. Additionally, 100% renewable energy is the aim of the organisation, and choosing electric cars for supply chain management, waste management, utilising renewable resources, developing the products with renewable battery and raw materials would be the best strategic planning for Samsung to secure future sustainable development.

Reference List

Bazmohammadi, N., Tahsiri, A., Anvari-Moghaddam, A. and Guerrero, J.M., 2018. Optimal operation management of a regional network of microgrids based on chance-constrained model predictive control. IET Generation, Transmission & Distribution, 12(15), pp.3772-3779.

Gholizadeh, N., Gharehpetian, G.B., Abedi, M., Nafisi, H. and Marzband, M., 2019. An innovative energy management framework for cooperative operation management of electricity and natural gas demands. Energy Conversion and Management, 200, p.112069.

Haizar, N.F.B.M., Kee, D.M.H., Chong, L.M. and Chong, J.H., 2020. The impact of innovation strategy on organizational success: A study of Samsung. Asia Pacific Journal of Management and Education (APJME), 3(2), pp.93-104.

Hemmert, M., 2017. The evolution of tiger management: Korean companies in global competition. London: Routledge.

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Tian, D., Li, H., Xu, L. and Li, Y., 2019, July. Technological Change and its Impacts on Supply Chain Evolution: The Case of Samsung Group. In 2019 16th International Conference on Service Systems and Service Management (ICSSSM) (pp. 1-6). IEEE.

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