Samsung - Operations Strategy

12
Operational Strategy Sujith Jayawardhane Zaryab Haider Mohammad Habib Mahmoud Kamal Jerrym Jose Hassan Wali Mostafa Ahmed Eslam Salah

Transcript of Samsung - Operations Strategy

Page 1: Samsung - Operations Strategy

Operational Strategy

Sujith Jayawardhane Zaryab HaiderMohammad HabibMahmoud Kamal

Jerrym JoseHassan Wali Mostafa AhmedEslam Salah

Page 2: Samsung - Operations Strategy

Samsung – Next Is Now• One of the world’s leading providers of digital convergence

technologies and digital media.• Founded in 1938 by Lee Byung-Chull as a trading company.• Headquartered in Seoul, South Korea; operates in 80

countries with over 307,000 Employee’s Aprox• Increased globalization of activities since 1990 with mobiles

and semiconductors becoming major source of income.• Strong brand equity and involvement in CSR (Corporate

Social Responsibility) business activity, which initiates to benefit the society.

• Diversified product portfolio with constant focus on Research & Development.

Page 3: Samsung - Operations Strategy

World Wide Distribution

3.00%2.60%2.40%

30.50%

3.30%2.80%2.70%

7.30%

19.20%

2.80%

2.90%9.20%

2.50%3.30%5.50%

Distribution Country

Taiwan SpainRussia OtherItaly IndonesiaIndia UKUSA BrazilCanada ChinaCroatia FranceGermany

Page 4: Samsung - Operations Strategy

Operations

R&D

Procurement

Manufacturing

Logistics

Sales

After Service

Current Operations Strategy

Page 5: Samsung - Operations Strategy

Current Operations Strategy• R&D – Samsung invests around 9% of its revenue on R&D, in comparison to Apple’s which is 2.4% of its

revenue on the same. More than a quarter of all Samsung employee – 42000 FTEs – Work everyday in R&D to forge new market trends and set new standards for excellence.

• Procurement – Samsung outsources its major production into China which gives them the benefit of spending lower and earning higher. It gives them an edge on in the market to be competitive in terms of cost and sell.

• Manufacturing - Samsung has cultivated an ability to quickly understand the functions and imitate and where possible given its strength, improve, on competitors product. Because it has the ability to manufacture products quickly as a contract manufacturer, it has the skill, to produce incremental product improvements quickly.

• Logistics – Equip deliveries personnel and vehicles with mobile solutions in order to establish their location at all times, optimize routes and efficiently distribute schedules and work orders. Samsung is using location based technology to track materials, parts and products as they travel through the entire supply chain.

• Sales – By 2020 Samsung is focusing to achieve USD 400 billion annual sales while placing Samsung electronics overall brand value among the global top 5.

• After Service – Samsung’s biggest strength is customer-centricity and continuously innovating to meet the requirements of its customers. The launch of the innovative customer service plazas and its strong customer service network is testimony of our commitment to the customers. Their innovative service delivery model will enable them to deliver customer delight at each step and further drive brand loyalty.

Page 6: Samsung - Operations Strategy

Great People Creativity Partnership

Strategic Directions

Page 7: Samsung - Operations Strategy

Effectiveness of Current Strategy• Samsung enjoyed phenomenal success with the S2, S3 & S4 but the S5 & S6

did not match expectations and as a result, their market share was affected in 2015.

• Could not keep up at the high-end of the market after the arrival of iPhone 6 and 6 Plus. Suffered at the low-end too at the hands of upstart Chinese manufacturers like Xiaomi and OnePlus.

• Robust demand for memory chips with an increase in profitability.

Page 8: Samsung - Operations Strategy

Recommendations - The future• Focus less on variety, more on quality• Strengthen its technology with regard to

software and features• Launch sub-brands to the company with new

and improved strategies• Expand the number of stores to establish

footprint on a wider horizon• Step ahead of competitors in terms of

innovation and unique functions

Page 9: Samsung - Operations Strategy

Tools to improve operational efficiency• Failure Mode and Effects

Analysis (FMEA)– Helps identify the root cause– Structure approach to assess

all possible failure modes of product/process in terms of manpower, management, materials, methods etc

– These modes are ranked based on probability and are given a risk prioirty number (RPN) to help prioritize and plan in advance

Page 10: Samsung - Operations Strategy

Tools to improve operational efficiency Control Chart

– Most common statistical process control (SPC) technique– Visual tool to monitor a process to see whether it performs as expected– Using the recorded data, upper and lower control limits are calculated and

plotted on the control chart– Upon comparing with additional measurements, any measurements falling

outside the limit may require action to be taken

Page 11: Samsung - Operations Strategy

Scope for future sustainability• Create their own software and reduce

outsourcing• Expand the memory chip division as it

maintains the firm at an advantage• Innovative product design along with value

added features• Lead rather than follow competitors• Enter newly emerging markets like Bangladesh

& Africa.

Page 12: Samsung - Operations Strategy