This report investigates the new product strategy of the Samsung group and the report outlines all the operations of the business. Samsung is the famous brand name of the electronics company and it is a South Korean manufacturing company. The company has its headquarters at Seoul. The Samsung group set up their business in the 61 different countries and more than 1,60,000 employees are still working in the company. Because of the globalization and advancement of technology, the company is continuously growing. The Samsung group gave a strong competition to the Hewlett-Packard as the Samsung group took a position of the world’s largest IT company in 2009. The company holds the number one position in manufacturing the LCD, LED and memory chips. The Samsung group is operating in the number of markets like USA, UK, Japan, Canada, France and UK. The company builds its brand image because of tits quality products and services. Samsung group also holding a good position in the mobile industry as from the last 8 years company also launched the series of mobile phones. The Samsung group is also competing with the famous mobile companies like Sony, Nokia, Apple and LG, etc. the main objective or goal of the company is to become the leading industry in the field of the electronics (Lee, 2005).
Mission- the mission of the company is inspiring the world by offering them the new and innovative designs for enriching the lives of the people and contributes towards the sustainable development of the society in future.
The Samsung group has the strong organizational structure and culture as it managed all the operations like production, distribution, operation and manpower in a very effective and efficient way. The culture of the Samsung made up 3 things:
Work Smart groups: These are the part of the mobile office, conferences, meetings and surveys in the different locations. The employees with new ideas is the strength of the organizational culture of the Samsung and it leads to the growth and success of the company. The culture of the Samsung group can be promoted by offering various programs for the employees like work life, flexible hours and welfare programs (Samsung Team, 2014).
Think Hard: The thinking of the employees and their ideas are the reason of the success of the company as the innovation in the designs of the mobile system is the master system.
Building of trust: All the complaints or the issues faced by the Samsung group of companies should be maintained and handled by the company in order to build the trust and equality among the employees. For the company. employees are the asset of the company. As a result of which, it is the duty of the Samsung group to handle their grievance and retain them for the successful working of the company.
The organization also has a very strong structure as the company is following the proper system by making a proper division of the work into the different departments. The Samsung group is dealing with the various sectors like information technologies, mobile devices and consumer electronics and home appliances. The organizational structure of the Samsung group has been shown in the below diagram as there are many departments like, production. IT, Distribution, management, etc. and all these sectors are further subdivided into the sub parts of the business (Samsung, 1995).
|
Operation type |
Manufacturing operations |
|
Type of products |
All mobile devices, electronics, home appliances |
|
Customer base |
All the customers from the niche market |
|
Segmentation |
Focusing more on the large segments of the different markets |
|
Location |
A South Korean company headquartered in Seoul and various offices in different countries like Australia, Canada, UK, USA. |
The company is offering the widest range of the electronic products and the several versions of the mobile phones. In this report the production and design of the new Samsung S8 mobile phone is discussed. The company has already launched many other products or models of the mobile phones like Samsung galaxy, S7, galaxy prime. The case study shows that the Samsung is designing the new product for the people and the application of the De Mono’s Six thinking hats for the new S8 mobile phone (Eskandari & Miri, 2015).
This model will be applied to generate the ideas for the designing of the mobile devices and this model is having the six parts which are named as the hats and these are yellow, green, white, blue, red and black.
The concept of the introducing the new Samsung galaxy S8 is well known in the World. The new Samsung Galaxy is new in design as compared to its previous models. The color of the Samsung mobile phones is very different in comparison to other mobiles as the mobile will be available in orchid Grey, gold and blue. The screen of this phone will be 570 inches in comparison to the other mobiles. The new Samsung galaxy S8 has the great camera quality of 12 mega pixels and the full security proof and the waterproof mobile. The mobile consists of the sensor compass manometer which is not available in the other mobiles.
The new Samsung galaxy comes with an extraordinary feature in built and the phone is already on the top and the people already made an advance booking because of its specifications. The good points of this phone are that the company is offering this phone which is running on the android 7.0 and the powered by the battery of 3000mAh which a non removable. The weight of this phone is only 155 grams and it is a single Sim that having all the options of the connectivity that are wi fi, Bluetooth, NFC, 3G and 4G.
The cost of the Galaxy S8 is very high as it cannot be affordable by the middle class people. The price of the mobile phone is the 53,800 in Indian rupees which is exactly $307 in the other countries. The price of these mobiles will not attract the lower income people.
Another bad point of this mobile phone is that there are many competitors available in the market and this product is targeted only the niche market. The high competition to these mobile phones are the bad point for the product marketing.
The new ideas in this phone are the color scheme of the phones as well as the phone consists of the compass magnetometer, proximity, Accelormeter, light sensor and gyroscope. The look and design of these products is stunning which creates a difference in the competitors market and build the brand image of the company because of its topmost products. Talking more about the product designs, every product, either its LCD or mobile phone is brilliantly designed. The main features of these products are their attractive and innovative designs with a quality.
The team thinks that due to the variety in technology and the trends, customers will feel special and be able to customize their individual mobiles phones more. With the use of quality material in the manufacturing of the products Galaxy S8 will appear (and be) better than other competitive products However, since the concept is new, no precise forecast in regards to its success can be made, as such there is a slight feeling of insecurity amongst the team The project team also likes that customers can purchase the phones through the online system and enjoy them at home and thus will experience the online and easy shopping.
The Samsung galaxy S8 is the product manufactured by the Samsung group and this product is the most creative and innovative product and the company put all his ideas in designing and thinking of the product specifications. The application of the innovation and new features has been seen in this product. Test have been conducted in order to check the stability and durability of the mobile phone. The security of the data and memory of the Samsung S8 is mainly concerned by the group of companies.
|
Function |
Question |
Response |
Comments |
|
Production |
1. Does the galaxy S8 requires new technology for use? 2. Do the other technologies used in production need replacement. 3. Does the production control and quality control need to change? 4. Has the new production room plan is already developed? |
Yes NO Yes Yes |
Make this phone fully waterproof All the technologies are still useful More inspection and test need to improve the efficiency of phone The new production and quality control are collaborated together to increase the quality and efficiency of the product. |
|
Suppliers |
5. Do the existing suppliers are performing well in the Samsung? 6. All the requirements of the quality are fulfilled by the supplier or not? 7. Does the company have any alternative provider? |
Yes Yes No |
All the suppliers deliver the raw material and the products on time and with the exact amount. Regular research and audits are conducted in order to check the quality of the raw materials. Company need to look for the back up suppliers to avoid the future losses. |
|
Human resource |
8. Does the company need a new staff for the new product? 9. Is it there any requirement of the staff training? 10. Any new staff recruited in the company? |
No Yes Yes |
The company already having the 1,60,000 employees and team of experts. For the better implementation of the plans and for marketing purposes. Because of the advanced booking of the mobile phones, company need to follow the agenda. |
|
Distribution |
11. New distribution process is required or not for new product? 12. Is there any need of reducing the delivery time? |
No No |
The same method of distribution can be used for the existing products. There is no need because same time can be applied to the new product also. |
|
Sales and marketing |
13. Does the company need to improve the marketing strategies? 14. After sales services required to be offered? |
Yes Yes |
This new product is different from the other products that are why it needs to improve the strategies. To increase the sales of the product and to build the brand image. |
The above design checklist shows the different functions and the Samsung new product strategies need to be developed in order to increase the sales of the company and to become the leader of the innovation. The company is using the same strategies and distribution processes for the new product also and the company needs to train the employees for the marketing and sales purposes. The design checklist is developed to understand and review the different functions of the product development like production, Human resources, sales, distribution, etc. The company needs to manage all the demand forecasting as the production planning and supply chain management are highly dependent on the demand of the mobile phones (YouSigma, 2015).
The production process of the Samsung Group can be understood by the value stream mapping. The value stream mapping diagram given below explains production and the supply chain that includes the weekly forecast of the market. For the production control, the supervisor is required to just control all the operations of the production as well as the inspection part. The Samsung group has a strong network of the suppliers, distributors and the below value stream mapping is helpful to understand the working activities of the each stakeholder of the Samsung group.
In the below figure, the full plan of the Samsung production as well as quality inspection has been shown. It is clear from the below diagram that, once the order is confirmed, then the production and quality can be controlled through the various steps. The process of production has gone through the number of steps like, collection of the raw materials, manufacturing activities with the help of the raw materials, packaging of the mobile phones and then the distribution of the mobile phone to the several outlets.
There are many operations that need to be managed by the company in order to design and launch a new product. The company needs to find out the demand and supply factors before launching the new products in the market.
The supply chain of the Samsung needs to be managed in order to offer their suppliers about the forecasting of the supply. There is a strong network of distribution of the Samsung group as the company supply their products to the different shops, outlet stores, supermarkets to make available for the customers. The forecasting of the supply is very important to check the available stock of the product is meeting the demand forecasts. The production of the mobile phones is highly dependent on the demand and sales of the products. The booking of the S8 mobile is already made by the people so the company needs to focus on the production and supply to avoid the situation of scarcity (Londre, 2007).
Looking at the demand of the mobile phone, then the advanced booking agenda will show the level of the demand. As the demand of the mobile phones is increasing continuously because of the basic needs of the people. The company needs to manage all the demand forecasting as the production planning and supply chain management are highly dependent on the demand of the mobile phones. These forecasts will be based on past sales histories/transactions, as well as seasonal forecasts and the past records of the outlets, retail stores to check the sales of the previous models of the Galaxy S7 (Price & Johnson, 2015).
Another aspect of the management of the operations is the management of the production as well as the inventory. The production level must be determined and scheduled accordingly. The Samsung company has the full dedicated team at the production houses and the company can also hire more experts at the time of season or high demand.
Moving further, the management of the inventory also matters a lot as the record of the stock in and stock-out is very helpful in calculating the various ratios and the profit levels. There are many tools to analyze the stock and inventory calculations. The stock calculations can be done by making use of the formulae’s (Electronics, 2012). The 5 why test is used to analyze all these calculations.
This section has been aimed to assess the inventory-related computation factors, mainly Re-Order Point (ROP), the Safety Stock and the Economic Order Quantity (EOQ). The calculations for the above mentioned part is done as follows :
Demand (D) per week = (500,000 to 1,000,000 per week)
Lead Time during replenishment (L/T) = a number between 1 and 2 weeks
Standard Deviation of demand during replenishment (SD) = 15%
Carrying cost (H) per week = a number between $1and $5
Fixed cost of the order (S) = a number between $100 and $200 Service Level = a number between 80% and 95%
Service Level has been taken on average between 80% and 95%, i.e. for 87.5, the z value has been taken is 1.130
Average Demand during replenishment (DL/T) = Dpw + Dpw =7,50,000 items for 1.5 weeks on an average
Demand variation during replenishment σL/T = σ * ==918525
(The value for is 1.2247)
Re-Order Point (ROP):
Reorder Point =D L/T + Z σL/T = 7500000+ (1.15 * 918525) =1806409.384
Safety Stock:
Safety Stock = Reorder Point+ Demand
Annual Demand = 750000* 52 weeks=39,000,000 $
Annual carrying cost= 3* 52= $156
Fixed cost =$150 on an average of $100 and $200
Qopt== 3420.52
Optimum Order Quantity are 3420 items.
Economic Order Quantity:
EOQ 7500000
Annual Demand = Economic Order Quantity= 750000*52 weeks= 3900000
Carrying Cost =(1125 0*2 * 39000000)/ (100*156)= 56250000
Optimum Order Quantity=2371
Assumptions
For demand of 7,50,000 items per week on an average, the resulting optimum order quantity has been computed to 2371. Conversely, since the weekly demand are 7,50,000, the replenishing lead time is 1.5 weeks, which has been taken from the given 1-2weeks. Samsung has calculated EOQ and Optimum Order Quantiy to assess what timelines and schedule they are required to make better and effective supply chain management. The assessment factors related to fixed cost and carrying cost have also been considered for the same.To diminish, control and reduce the situation of stock-out (the point when there are no items available, and few items are required) the safety stock has also been calculated
The reliability of the phone will be calculated based on the assumptions that it will be used for 6 hours a day for 360 days per year. The manufacturer guarantees which it will be operational for 1.5 years without failure.
The reliability of the manufacturing Samsung Galaxy 8 which would be calculated based on the assumptions that it will be used for 6 hours a day, on an average 360 days per year. The manufacturer guarantees that it will be in operation for 2.5 years with minimal or no failure.
MTBF = 6/day * 360 days/year * 2.5 years = 5400
Failure rate λ = 1/MTBF=1/5400= 1.851851851851852e-4
Probability of conche failure after 20% of its guaranteed life time:
T = 2100 * 0.20 = 420
Probability of failure F(T) = 1 – e – λT F() = 1 – e– 1.851851851851852=1/2.718*1.85185
By assuming(e=2.718)
This means that the probability of the breaking down or failure of the new model of Samsung phone processing after 5400 hours of operations is calculated 420, to be nearly 7%. In other words, the reliability of the phone is considered 93%; assuming the phone would be operated for 6 hours a day on an average of 360 days a year, it means that after 5400 hours of operation seven of these nine machines are still fully operational.
(Considering the percentage of failure or defect rate, i.e. 1.5% or 81 units)
Similarly, the Overall Equipment Effectiveness (OEE) will be calculated for one phone. The following numbers are operational data for one working day:
Scheduled Operation Time: 10 hours
Scheduled lunch break: 45 min = 0.75 hours
Unplanned breakdown time: 30 min = 0.5 hours
Net scheduled operating time: 10 – 0.75 = 4.25 hours
Total items produced: 700 items per day
Good items: 630 (are grounded; 70 may get non repaired)
Net operating time: 4.25 hours – 0.5 hours = 3.75 hours
Ideal Cycle time: Net Operating time / Total items produced = 3.75/700 = 0.0053557 min / phone
Availability: Net Operating Time / Net scheduled time = 3.75 hours / 4.25 hours = 0.882
Performance Efficiency: (Total items produced * Ideal Cycle time) /Net Operating time = 1,0
Quality Rate: Good items /total items produced = 630/700=0.90
OEE: Quality rate * Performance Efficiency * Quality Rate = 0.811
This means that the Overall Equipment Efficiency rate of the cocoa bean grinder 79.38
For managing the operations of the launch of a product, there are various steps which need to be controlled and required to be handled critically, for an example the issues of failure in supply chain management and inventory management.
The supply chain process of the Samsung needs to be managed in order to offer their suppliers about the forecasting of the supply.
Total items produced (=phones manufactured per day): 700
Defective pieces: 21(=3%)
Defects: 35 (=5%)
Non-defective pieces: 679 (@3%)
Non-defective pieces: 665 (@5%)
Defects per unit @3%=665/700= 95%
Defects per [email protected]%=679/700=97%
DPU1=21/700=.03
DPU2 =35/700=0.05
Yield (defect)1 = 0.95 to 0.97
Another important and essential subject of the management of the operations is the management of the production while maintaining the inventory. The production levels are required to be determined and scheduled accordingly. Although, the Samsung company has a strong and full dedicated team at the production houses. But, to reduce the human error involved in the defect can be cured if the company can hire additional and specific experts at the time of peak season or at the of high demand and high production.
The supply chain process of the Samsung needs to be managed in order to offer their suppliers about the forecasting of the supply.
Total items produced (=phones manufactured per day): 700
Defective pieces: 35 (=5%)
Defects: 49 (=7%)
Non-defective pieces: 665 (@5%)
Non-defective pieces: 649 (@7%)
Defects per unit @5%=665/700= 97%
Defects per [email protected]%=649/700=92.7%
DPU1=35/700=0.05
DPU2 =49/700=0.07
Yield (defect)1 = 0.925 to 0.97
The above 2-step process related to Samsung operations for Galaxy-8 has been covered. Two activities have been considered which can suffer directly due to factors like change in demand, lead time delay and defect in any activity it process.
The assumptions which have been taken for the first activity is between 3-5% at step 1, and between 5-7% at step 2. For defects, assume a number that must be larger than the defective items observed at each step. The Rolled Throughput Yields of both the activities have been calculated and the values are 0.9215 and 0.89725 for first and second step respectively
The 5 why analysis is applied in order to understand the root cause of the problems and failure for testing the mobile appliances. During the production process of S8 galaxy, the producer failed to add the feature of the Waterproof system in the mobile. The 5 why analysis is the process of finding the root cause of the failure and this is the technique used to analyze the six sigma elements like DMAIC (design, measure, analyze, improve and control).
The reason found is the improper coating of the mobile phones.
Because of the coating machine of the company is not functioning properly.
The process of re-production involves the huge cost for the company.
They did not know that these operations are necessary (Cheng, 2016).
Therefore, from the above analysis, it is clear that the improper working conditions of the coating machine is the root cause of the failure in a test of waterproofing. The coating of the mobile is done in a proper way. The company, however, needs to replace the machines to deal with the failures like this in future.
The optimization of the manufacturing processes does not mean changing the production plans, it is also important to reduce the time and non added value to improve the efficiency of the equipment as well as the elimination of the production constraints. The solution of the problem faced by the company is that to install the new coating neon machine for the proper coating of the mobile devices the theory of constraints can be applied in order to eliminate the fictitious constraints. Five Focusing Steps will be applied in order to demonstrate the Theory Of Constraints and eliminate this bottleneck (Obhrai, 2015).
Conclusion
This report is based on the case analysis of the Samsung group that explained the designing and management of the operations of the product. The product here chosen in this report was the mobile phone, a new version of the Samsung Galaxy and the product name is Samsung Galaxy S8. The company Is offering wide range of the products, but the challenge faced by the Samsung company or the threat to the Samsung group is its competitors like Apple company. As currently the Samsung is unable to match the capabilities of the Apple and the market share of the Samsung company fell down because of the growth of the Apple and the introduction of the new Chinese industries Huewei and Xiomi. The new design of the S8 is made in accordance with the other competitors and offering the better specification in the new product. Moreover, the challenges which are connected to this company consist of its high cost, powerful competition and strategic management. These problems can be effortlessly resolved by adapting the fresh strategies and the main intend of the company is to come up with fresh and good innovative ideas and technology in this contemporary world. So,. It is clear that Samsung wants to maintain its brand image for the innovation and the excellence work.
References
Cheng, J., 2016. Samsung Makes Aggressive Play for Emerging Markets¸ Available at: https://www.wsj.com/articles/samsung-makes-aggressive-play-for-emerging-markets-1459997969
Electronics, S., 2012. Creative Organizational Culture¸ Available at: https://www.samsung.com/us/aboutsamsung/sustainability/people/download/Samsung_sr_2012_Creative_Organizational_Culture.pdf
Eskandari, M. & Miri, M., 2015. Thinking of the blue ocean – strategy beyond the competition¸ Available at: https://www.researchgate.net/publication/281123431_Thinking_of_the_blue_ocean_-_strategy_beyond_the_competition
Jung, S., 2014. The Analysis of Strategic Management of Samsung Electronics Company through the Generic Value Chain Model. International Journal of Software Engineering and Its Applications, 8(12), pp.133-42.
Lee, C., 2005. Global Marketing Strategy Global Marketing Strategy, Available at: https://www.samsung.com/us/aboutsamsung/ir/ireventpresentations/analystday/downloads/analyst_20051103_1600.pdf
Lee, J., Lee, K. & Heo, J., 2015. Supplier partnership strategy and global competitiveness: a case of samsung electronics. Eurasian Journal of Business and Management, 3(4), pp.1-12.
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Obhrai, P., 2015. Marketing Strategies of Samsung in India. International Journal of Research in Humanities & Social Sciences, 3(6), pp.1-7.
Price, T. & Johnson, E., 2015. Marketing Plan: A Dominant Force in the Electronics Industry, Available at: https://sites.psu.edu/ejohnson1/wp-content/uploads/sites/42297/2016/03/Marketingplanfinaldraft.pdf
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Samsung, 1995. The hinoki and the pine: An essay about growing value at Samsung, Available at: https://www.samsung.com/common/aboutsamsung/download/performance/group_ar_1995.pdfs
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