Executive Summary 3
Introduction 4
Process Design 4
Samsung Overview 4
Why Lean Strategies May be Useful to Samsung Managers 6
Conclusion 8
References List 9
Executive Summary
Samsung Electronics is an international company that deals in several electronic appliances as well as state- of -the art IT solutions. As a subsidiary of Samsung Electronics Group, the company was established in 1969. It has presence and operations in over 60 countries across the globe. With over 200,000 dedicated employees, the company has managed to serve its clientele with dedication.
Samsung Electronics is headquartered in Suwon area of South Korea. Electronics its many quality appliances marked its pioneer products. The appliances include washing machines, television sets and refrigerators. The company has further interests in other products such as semi-conductors, telecoms, mobile phones as well as personal computers.
Samsung has acquired several other concerns over time. It has, for instance, successfully acquired Rollei watch making company, Fokker Dutch, AST Research and even ventured into fashion industry by acquiring FUBU line of clothing and apparel, among others. Reaching this level has not been without challenges. The company, for example, rose above its erstwhile competitor, Nokia, to become the leading global manufacturer of mobile phones by unit sales.
Samsung Electronics has remained profitable through innovation and constant restructuring. Its workers as well as managers are well motivated to work towards achieving results in line with the company’s mission statement.
The company’s future outlook is bright as it seeks to further increase customer loyalty. This will have to be achieved through aggressive marketing and promotion. Discounts offered as well as lower prices, will cater for all segments of society.
Introduction
Process Design
According to Slack et al (2004, p. 69) design is the process of developing a product, service or process plan. In addition, process is the part of an organization that takes input resources and transforms them into a product or service. Design is unavoidable as the processes, services and products which produce them should be designed. Product design affects the process design according to Slack et al (2004, p. 58). The decisions made when designing a product will affect the decisions made when designing the process that produces the products and vice versa. Product/service designs and process designs are interrelated. The products and services ought to be designed in a manner that they can be created successfully. Processes should be designed to create the services and products which the operation is supposed to produce. Companies are supposed to consider how the design should be produced when committing to comprehensive design of services and product. The design of processes can hinder the design of services and products (Das, 2015, p.20). The overlap is evident more in the service sector instead of the manufacturing sector. In the service industry, it is hard to differentiate between service design and process design as they are the same. In the manufacturing business, it is easy to distinguish product design and process design, but it is important to consider the two as one. This is because product design affects the cost of making the products. Process design is aimed at making sure the process performance is suitable for whatever the organization is attempting to achieve (Chase and Nicholas, 1991, p.59). Hence, the operations performance objectives are translated to process design objectives. A process is a technique of doing something and entails several steps or operations (Chase and Nicholas, 1991, p.59). Process design is critical in designing products such as mobile phones, as it influences the product design.
Samsung Overview
Samsung is a world leader in the manufacture of electronics. Founded by Lee Byung-chull in 1938 as a minor business, the company has grown to be a multi-national corporation (Chang, 2011, p. 113). Headquartered in Seoul, Samsung has strong presence across the globe through ancillary firms. In fact, the company is an umbrella to other subsidiary companies. Famous subsidiaries for Samsung include Samsung Heavy Industries, Samsung Engineering, Samsung Electronics and Samsung C and T. Samsung deals in consumer appliances and markets a range of electronics. These products include Mobile Phones, washing machines and TV’s among others.
Chang (2011, p. 143) mentions that innovation is among one of the driving factors that Samsung uses to come up with a new product design or improve on the existing product. For example, Samsung has continuously used this strategy to change the design of their mobile phones by adding new features as well as improving its production processes. For instance, when Apple released its iPhone 6 Smartphone, Samsung responded by designing sleek Galaxy series Smartphones. The phones were trendy in design. The series included Samsung Galaxy S6, Samsung Galaxy S6 Edge and Samsung Galaxy Note Edge, among other designs (Samsung, 2016). These Smartphones had superior features compared to previous designs it had manufactured before. Similarly, through innovation, Samsung is steady on online marketing. They use the platform to reach more customer base. The company uses technologies such as bar cording and computer aided design in manufacturing new mobile phones.
Samsung embraces a technique known as the intermittent. Intermittent is an operation that is used to produce a wide range of products with different processing requirements in lower volumes. Samsung does not use a single route to process its products. Different products use different routes to encourage diverse processing needs. Similarly, resources are grouped. They are grouped based on the function, and the product is routed to the resource required. Despite widely being used by Samsung, intermittent operations are labor intensive instead of capital intensive because different products demand various processing needs. Also, employees have the capability to perform various risks depending on the processing needs of the product being manufactured. Additionally, equipment in this kind of environment is general purpose. The equipment is made that way to meet the diverse processing requirements. This is why Samsung does not invest in the automation of a single product type as the products manufactured have different processing requirements. The volume of products manufactured is connected to the number of orders consumers place.
Chang (2011, p. 116) asserts that the continuous and intermittent operations categories used by Samsung can be divided further, based on the volume of product and product standardization. Intermittent operations are grouped into batch processes and project processes. Continuous operations are grouped into continuous processes and line processes (Chase and Nicholas, 1991, p.54). Project processes are utilized to manufacture goods that meet customer specifications. These processes are utilized when there is high customization and low volume as every product is different (Mahadevan, 2009, p.36). The consumer is also involved in the design. Conversely, batch processes are utilized to produce small quantities of goods in batches based on the orders given by customers or product specifications. The volume of the goods manufactured is small, and there is high customization. Line processes are aimed at producing a huge volume of standardized goods for mass production (Chase and Nicholas, 1991, p.54). The goods are produced in high volume and there is no customization. For instance, Samsung produces a large volume of standardized mobile phones for mass production. The phones are not customized, but rather, the company focuses on producing bulk quantities of the goods. Continuous processes operate continuously to produce a very huge number of standardized products (Mahadevan, 2009, p.36).
According to Pycraft et al (2000, p. 123) vertical integration impacts the process design as the amount of integration influences process selection and strategic decisions at Samsung. Vertical integration is the section in the supply chain from the acquisition of raw materials to the delivery of the final products (Chase and Nicholas, 1991, p.55). Samsung is highly vertically integrated as they have their own facilities that provide raw materials, manufacturing plants and a fleet of vehicles used to deliver products to consumers. They also use external sub-assemblies and distributors to distribute the products. Chase and Nicholas (1991, p.115) explain that there are different kinds of vertical integration strategies including backward and forward integration. In backward integration, companies own or acquire the supply sources, raw materials and sub-assemblies. In forward integration, companies own facilities near consumers, including distribution channels, retail location, and warehouse usage. This form of integration has helped Samsung control the quality, consistency, and delivery of raw materials and finished goods.
Most businesses embrace cost cutting techniques in order to maximize on the profits. Through massive deployment of cutting edge technologies, Samsung has significantly reduced production costs of their mobile phones while providing the best quality. Samsung has deployed technology right from design, manufacturing and marketing of its mobile phones. Chang (2011, p. 153) illustrates that the fact that Samsung continues to dominate the market for consumer appliances such as electronics, it is its ability to embrace technology in its entire product manufacturing cycles that makes it even more successful.
Riding on its own brand name, Samsung has endeared itself to the consumers by constantly producing products of the highest quality. Chang (2011, p. 161) notes that Samsung products are of high quality and exceed customer expectations. The company achieves this objective by leveraging on the process design and product design to improve the quality of the product. The company designs products by factoring in what they consumer wants. Also, Samsung (2016) points out that closely related to quality is the price. Samsung is wholly into the consumer market and hence, the price of the final product plays an important role in the design and manufacture of a new mobile phone.
Viardot (2004, p. 73) points out that logistics and warehousing play a major role in Samsung. Through logistics and warehousing, Samsung ensures its mobile phones reach the prospective customers without delay. Samsung logistics are put into place right from the flow of the products; up to the point the product is delivered. To improve efficiency in the logistics, Samsung embraces forecasting and planning. This is a unique feature connected with supply chain. With this feature, Samsung can precisely forecast customer demand, and strategically plan procurement and production practices accordingly. This reduces unplanned purchases of raw materials, minimizes manufacturing overruns and decreases the need of storing excess completed goods.
Samsung processes are organized in different ways based on the flow of material. This includes line-flow, intermittent, continuous and project fixed position. In line flow processes, workstations are grouped into a single department and laid out in the sequence required to manufacture the product. Work flows from one station to another station at a constant rate and without delays. According to Viardot (2004, p. 79) the systems are employed by Samsung to produce goods that are made, and assembled in the same way. Thus, the system cannot be used to manufacture a variety of products as the stations are arranged in a sequence (Viardot (2004, p. 79).
Diversification of products assists companies to spread their risks and continue with business when one brand does not perform well in the market. According to Michell (2010, p. 32) manufacturing has enabled Samsung to develop the capability to produce a wide range of product lines. These products include mobile phones, washing machines, TV’s Laptops and Hi-Tech stereos among other products (Samsung, 2016). Samsung views that as demand for a given product changes, it can rely on other products to stay in business. Thus, Samsung has managed to adapt to meeting the demand by producing different product lines, hence, avoiding the risk of overproducing in a single line.
Also, Samsung’s position in the industry leverages its process design. Samsung’s product design is strategically essential to the success. The company uses massive resources to sustain its leadership standing in the design and manufacture of mobile phones and other electronic products. The products provided by Samsung define its image, competition, growth and position in the industry (Chase and Nicholas, 1991, p.59). Thus, product design and process design are critical factors in the Samsung’s capability to keep and increase the consumer base. Consequently, Samsung makes certain the process design. Similarly, its product designs are distinct and cannot be imitated by competitors. This is to wade off stiff competition and command the niche electronic market. The design matches the needs and preferences of the target consumers and this prevents the company from losing the customer base and market position.
Why Lean Strategies May be Useful to Samsung Managers
Lean is a manufacturing technique that refers to the elimination of waste within the manufacturing system. Lean considers the waste created via overburdening and unevenness in workload (Mahadevan, 2009, p. 87). Lean strategies may assist Samsung managers to optimize efficiencies while reducing cost, thereby improving customer satisfaction.
One way in which lean strategies may help Samsung managers is minimizing the proportion of non-value adding activities (Bryan, 2015, p. 56). By embracing lean principle, the managers will be able to analyze the company so as to identify activities that do not add value and eliminate them. Samsung managers may use technique such as Just-In-Time, JIT to eliminate waste. Using this technique, the managers will eliminate aspects such as warehousing process, thus minimizing on the storage cost. Also, by embracing JIT system, time wastage is eliminated and the product undergoes a short product life cycle which facilitates faster delivery to the final consumer.
Moreover, the Samsung managers may increase the output value via systematic consideration of consumer requirements. Considering customer requirements involves applying the pull system such as the one developed by Toyota (Bryan, 2015, p. 95). Thus, Samsung managers can implement the push system as they plan what should be produced and move it through the production facility. By using this model, every workstation in a production process will be considered a customer. In systems where consumer requirements are systematically considered, the requirements will flow backwards via the process and the products as materials flow in the other direction. Managers play a key role in the organization; and as such, they are supposed to understand the needs and wants of their customers and design processes that meet the requirements and expectations. Thus, by understanding consumer requirements, Samsung managers will be able to make the rightful decision in regard to consumer needs.
The other benefit Samsung managers will accrue from lean principles is the decreasing variability. Managers will learn that variability reduces the deviation from the desired value in the production process. The variability in the time of activities increases the number of activities that do not add value. Thus, minimizing variability will ensure Samsung complies with the first two philosophies.
Reducing the cycle time is a hallmark associated with lean principles (Mahadevan, 2009, p. 48). The cycle time refers to the processing time plus the inspection time, move time and wait time. Inspection, wait and move times are deemed a waste of activities that do not add value. By embracing this principle, the Samsung managers will be able to decrease the cycle time by getting rid of the activities that add no value for the purpose of attaining continuous quality improvement.
Since Samsung deals with fast moving products, lean manufacturing will help managers to reduce the steps and parts, increasing output flexibility and process transparency. This aspect will create an environment where JIT production will be attained with minimum interruption to the job flow. JIT will assist the managers to improve product’s quality, promote quality levels through total lean production ensuring mobile phones being manufactured is of standardized quality (Pycraft et al, 2000, p. 73). Besides, JIT will also facilitate integrity and cohesiveness by promoting team works and spirits which in turn will lead to work satisfaction.
Lastly, the lean strategies will enable Samsung managers control the whole process of mobile phone design. Controlling the whole design process is important in achieving desired quality. Managers will know that disruption in the process disrupts the whole process of making products, hence, they will therefore be able to develop a lasting collaborative relationship with suppliers to make sure products are developed using first-rate materials (Michell, 2010, p. 56).
Conclusion
Samsung electronics has process design which is based on its nature of business, products and market place. The company has had change its products to match customer needs. The smart phones have undergone various transformations to match both customer and market dynamics. Thus the company has employed computer aided design among other strategies to achieve its leading role in the market. The company’s lean strategy has been quite useful in waste reduction. It has further incorporated intermittent process to produce a wide range of products with varied processing requirements. The vertical integration has also saved the company several costs, especially those to do with raw materials. This does not leave out warehousing and logistics, among other operations. All in all the combination of the various strategies makes the company keep its leading role among competitors.
References List
Bryan, C 2015, Handbook of research on global supply chain management. IGI Global, Pennsylvania
Chang, SJ 2011, Sony Vs Samsung: The Inside Story of the Electronics Giants’ Battle For Global Supremacy. John Wiley and Sons, London
Chase, RB & Nicholas, JA 1991, Production and operations management. Hornewood, III: Irwin
Das, A 2015, An introduction to operations management: The joy of operations. Routledge, London, UK.
Mahadevan, B 2009, Operation management: Theory and practice. Pearson Education India, New Delhi.
Michell, T 2010, Samsung Electronics: And the Struggle For Leadership of the Electronics Industry. John Wiley and Sons, London.
Pycraft, M, Singh, H, Phihlela, K, Slack, N, Chambers, S, Harland, C, Harrison, A and Johnston, R 2000, Operations management. Pearson South Africa, South Africa.
Samsung 2016, ‘Products’ Samsung, February, Viewed 18 February 2016
Slack, N, Chambers, S and Johnson, R 2007, Operations Management. (5th ed). Prentice Hall, Upper Saddle River, NJ.
Viardot, E 2004, Successful marketing strategy for high-tech firms, Volume 5. ArtechHouse London.
