Operations Management Essay

Question:

Discuss the different aspects which are affecting the business of the organization.

Answer:

Introduction

Samsung is a big name in the field of telecommunication and electronics industry. The company produces different types of electronics products and is spread across the world. The organization is headquartered at Suwon in South Korea. Samsung was founded by Mr. Lee Byung-Chul in the year 1938 (Samsung 2016). Initially, the company started its business as a small trading company but gradually the organization diversified its business into various other sectors. Today Samsung has business numerable industries such as shipbuilding, insurance, and also the construction industry. Samsung is also venturing into the medical industry (Samsung 2016). Samsung’s employee strength extends to over four hundred thousand across the world generating revenue of about three hundred five billion US dollars (Samsung 2016). Gradually over the years, Samsung has become a brand in the minds of the people and has reached a new horizon. Changing technology and globalization has helped the organization to reach this new level of success. Along with technology, changing job designs and global manufacturing processes have also created a huge impact on the business of the organization (Samsung 2016). This essay thoroughly describes the different aspects which are responsible in changing the business procedures and thoughts of the organization. Along with this, it also discusses the different operational areas which will also have an effect on the decisions of the operational managers.

Discussion

According to Andalibi et al. (2013), operation management is an important tool which determines the designing and the controlling process of an organization. Operation management has also come out with different innovative ideas to run an organization efficiently. Nowadays the operational managers are facing different challenges in running their business efficiently. These challenges are in the form of change in technologies, continued globalization, changing customer expectation, changing job design and quality management.

Technology in the recent century is changing at a first pace. As stated by Arslanagic-Kalajdzic and Zabkar (2015), Samsung is also adapting to change of technology and is using it for their benefit. Samsung has a well-developed research and development team which is involved making new innovations. Technology has different sectors, ranging from the physical device to the information over the internet. Technology has changed the consumer thoughts as well as the activity of Samsung. Technology has helped the operation managers of Samsung to increase their productivity rate at a very cheap rate (Donkor 2013). Technology also enhances the employees to do their work in a fast and accurate manner. Samsung mobile uses the Android base software which is user-friendly and this increases the sale of the product.

The increase of technology also has certain loopholes. According to Doherty et al. (2015), new technologies also bring a lot of risks. The wavelength which is used by mobile phones affects the health of human beings and is also responsible for the various diseases. Operational managers at Samsung must train their employees so that they can make proper use of technology. Otherwise, it may act as a boomerang for the organization. Latest technology also has the problem of unauthorized entry of people, and this may result in data loss.

Another challenge of the operating managers of Samsung is the influence of Globalization. According to Donkor (2013), globalization is a process or activity by which business idea or products ideas are exchanged between different trade cultures or societies irrelevant of global boundaries. Globalization is a curse as well as blessing for the operational managers in recent century. Globalization helps Samsung to carry out businesses in different parts of the world. It helps the managers to create a new market for the organization. Increasing customer reach will increase the revenue generation of Samsung. This will also help Samsung to avail resources at a cheaper rate.

Globalization increases the level of competition among different competitors. Due to competition, the companies will produce good quality products at a cheaper rate. This will help the customers to have quality products at a lower price. However, the profit level of Samsung could decrease due to the increased level of Globalization (Elguindi and Schmidt 2012). The operational managers of Samsung have to control Globalization in an effective manner to increase the profit margin. Globalization has helped Samsung to starts its business in different parts of the world. The political conditions prevailing in different parts of the world is also an important concern for the operational managers. Samsung faces tough challenges while operating in parts of Iran and Africa because of the political condition. The Economic slowdown is also another major concern for the normal functioning of the organization (Hertwig 2012). Globalization has also helped Samsung to share different information which is prevailing in different parts of the world. This has helped the operational managers to take various decisions which are appropriate for different functions.

The exchange rate of the currencies is also another important factor for the functioning of Samsung in different parts of the world. The currency rate is always fluctuation, and this is a severe cause of concern for the operational managers to expand business (Hu, Schaufeli and Taris 2013). Operational managers should prevent the fluctuation of currencies with the help of Swap market and Future market.

The tastes of the customers are changing in the recent century. This has a both positive and negative effect on the operation of business as well as the operational managers. According to Karatepe and Karadas (2012), the customers want products to be delivered at a quicker rate. This creates a problem for the operation of the Samsung. However, the operation managers of Samsung have solved this problem with the home delivery system method. New apps launched by Flipkart have helped Samsung to deliver the product quickly. Nowadays customers want stylish products which are fast and accurate (Katzan and Katzan 2015). This aspect has completely changed designs of most models of Samsung. Samsung now has products which include facilities like internet, music system through which customers can watch movies on their mobile phones.

According to Menezes and Wood (2015), job design is an important feature of an organization. It mainly affects the performance of the individuals within an organization. Job design controls the activities of the employee within Samsung in an efficient way. The operational managers follow the rotation job style within the organization. This helps the employees to have knowledge of different functions within an organization. Human resource is the most important resource within an organization. Job design includes training for the employees (Malik 2013). Employee training helps Samsung to operate different functions in an effective manner. Employees are also able to input different information which will help Samsung to operate in a proper manner. The operational managers also introduce job enlargement procedure in the organization to make the employees more knowledgeable. As a result, different tasks can be completed efficiently. As stated by Meller (2013), job design makes the work more interesting and challenging to the employees. This process increases the efficiency level of the employees within an organization. As a result, the pay packages of the employees are also increased. Therefore, job design motivates the employees to bring a higher level of commitment among the employees.

According to Nankervis et al. (2013), environmental forces also have an effect on the performance of the employees in an organization. Job design mitigates the impact of the environment on the productivity of the employees. Quality work life also has an effect on the mentality of the employees. A properly structured job design process improves the work life of the people within Samsung. It also reduces the mental pressure on the employees and improves the performance of the employees.

According to Narayanamurthy and Gurumurthy (2015), quality management is a process which ensures that the best quality product or service is being delivered to the customers. Quality management includes quality control, quality planning and quality improvement. The operational managers keep themselves focused on the quality management to provide the customers best quality products. Quality plays an important role in generating the good will of a company and increases the revenue of the organization. According to Pasaribu et al. (2015), poor quality products affect the productivity of Samsung. Low quality products often create mechanical breakdowns and slow down the production. Profitability is also affected by the low quality product. Quality management is mainly related to customer satisfaction. The operational managers are always focused on producing quality products in order to gain the beliefs of the customers. The after sales service of the company is also well developed to solve the problems of the customers, and this is a positive impact on the business of the organization. However, dissatisfied customers are also affecting the positive impact of the organization (Petrova 2013).

Samsung is a multinational company and has spread its product and service in various parts of the world. The organization also has manufacturing units in various parts of the world. In different countries, different rules and regulations prevail (Totonchi and Manshady 2012). This is a serious challenge for the operational managers in Samsung. Political unrest in countries like Nigeria, Zimbabwe and several parts of Asia is hampering the manufacturing process of the organization. Labor unrest in African countries is also affecting the manufacturing process of Samsung.

In the recent decade, the business of the organization is related to manufacturing of innovative products. Innovative products are always appreciated by the customers in the recent century. According to Narayanamurthy and Gurumurthy (2015), Samsung is involved in manufacturing innovative products which increase the sale of the products. The skill gap is also another important factor for the operational managers of Samsung. In various parts of the world especially in Africa and some parts of Europe and America people are not well trained (Totonchi and Manshady 2012). Therefore, Samsung has to hire individuals from different parts of the world. This increases the manufacturing cost of the product. Health care of the employees is also a major concern for the operational managers. Proper safety devices like gloves and goggless for every worker are also increasing the manufacturing cost. The environment is also another concern. Operational managers of Samsung have launched several types of equipments which remove harmful substances from the waste before they are dumped into the environment. The equipment used in the manufacturing unit should be properly checked and monitored by the skilled labors. This reduces the level of accidents in the manufacturing unit of Samsung.

According to Pasaribu et al. (2015), goods and the service design of Samsung is one of the strength of the organization. Samsung uses latest softwares and technology to provide the customers best quality products. The operational managers of Samsung have organized research on the people of Australia to know about their requirements and have launched products accordingly. Samsung uses the open sources operating system to launch its product. Open source operating system is a benefit for the organization as it would not be required to pay for the operating system. Android operating system used by the organization is user-friendly, and this is an added advantage for Samsung. The operational managers also focus on launching new and stylish products which easily attract customers’ attention. High-speed RAM is used by the organization which varies from 1 Mbps to 4 Mbps (Totonchi and Manshady 2012). The megapixel quality of the camera is also helping Samsung to attract customer’s attention. Samsung has introduced a new mobile app with the help of which the customers can order electronics goods with the help of internet. The products are also delivered at the desired location of the customers. This has enabled the organization acquire a good reputation for the organization. Moreover, Samsung has also increased the number of service centers in Australia. This has helped the organization to mitigate the problems of the customers easily. Therefore, goods and service design is a strong potential for the organization.

According to Chopra and Meindl (2012), cloud computing is used by Samsung to outsource jobs to different parts of the world. The jobs are mainly outsourced to the developing countries as mass production is obtained at a cheaper price, since labor cost is less. . Mobile phones are the main communication systems in the recent century. All types of information have been made are available on mobile phones with the help of internet and apps. Moreover, marketing too is also done with the help of social media. This has a positive impact on the business of Samsung (Cohen and Roussel 2013). Technology has also increased the level of communication and customers can easily contact organizations with the help of technology as procure their desired product. As a result, the cost of the product is also decreasing, and the customers get their product at their desired location in minimum cost. This indirectly reduces the production cost of the product. Social media sites have also reduced the barrier of geographical distribution and this has increased the business of Samsung.

Quality also affects the cost related to business. The company uses less expensive equipments which reduce the cost of the production in the short term policy, but in the case of long-term policy, the company may face certain problems (Stefik and Good 2012). The operational managers have also launched new softwares and equipments to improve the quality of the products. The operational managers focus on quality to increase the base of the customers.

According to Cohen and Roussel (2013), supply chain design of Samsung is also well developed and well connected through several channels. The operational managers of Samsung send staffs to different universities and corporate to understand the requirement of the individuals. These help Samsung to gather data and launch products according to their needs. This helps Samsung to create a potential database of the customers. Moreover, Samsung follows advanced planning and scheduling (APS) system with the help of which raw materials and production capacity are allocated optimally to meet the demand. The system has helped Samsung to allocate the resources at its best. According to Andalibi et al. (2013), Samsung has also decentralized the power which has been beneficial for the organization. A close communication has been established between different levels of workers through a decentralized system. “Voice of business” is a system which is followed by the internal employees of Samsung to collect various data which is essential for the business of the organization. Samsung also has a well-connected channel sales team to communicate with the customers. Distribution channels like distributors and retailers also help Samsung to enhance their supply chain management. The sales and distribution channel is segmented into three segments. Dealers are mainly related to corporate sales of the organization while showrooms increase the customer base of the organization (Stefik and Good 2012). Technology has also been introduced as the new horizon to the supply chain management.

Social media also has an impact on the supply chain management of the organization. Social media has helped the customers to share their feedback on the products. As stated by Klocke, Arntz and Heeschen (2015), positive feedbacks are enhancing the business of Samsung whereas negative feed is reducing the sale of the organization. The operational managers of Samsung have kept a thorough watch on the requirements of the customers and have changed their supply chain management accordingly. This has also affected the functioning of Samsung. Moreover, Samsung had to change their processes of job which is time-consuming as well as costly (Kramar et al. 2013). Therefore, it can be said that the supply chain management has a positive and negative effect on operations of Samsung.

According to Narayanamurthy and Gurumurthy (2015), resource management is an effective way to deploy and allocate the resource of an organization to achieve its target. Resources are mainly financial resources, human resource, and information resource. Samsung is a strong financial organization. The Strong financial condition of Samsung helps the organization to come out with new ideas. Human resource is the most important resources of any organization. Samsung has recruited talented employees to enhance their workforce. Training is given to the employees to adapt quickly to the new technologies. The pressure of the employees is reduced by various fun events like games and cultural programs. Moreover, Samsung has implemented gender discrimination policies to reduce differences between the genders (Petrova 2013). Information is also secured with the help of latest encrypting softwares.

According to Andalibi et al. (2013), inventory is also one of the factors which have an impact on the operation of the business of Samsung. It mainly affects the profitability of the business. The operational managers also keep a thorough watch on the inventory level of Samsung. The main requirement of Samsung in inventory list are plastic material body, steel body framework, RAM, glass, high quality mega pixel camera framework for television, circuit body and other electronics parts. The cost acquired in purchasing the raw materials has a huge impact on the gross profit of Samsung. As stated by Arslanagic-Kalajdzic and Zabkar (2015), gross profit is determined by deducting the cost of goods sold from the net sales of the organization. The operational managers are always active in reducing the inventory cost because this will reduce the production cost of goods. The operational managers of Samsung used the First in First out (FIFO) method in to maintain the inventory list. This help the organization to use the materials quickly and therefore the goods are also of high quality (Donkor 2013). This process has helped the managers to utilize the materials at its optimum level. However in case of price fluctuations the operational managers also used different methods like Re-ordering level, average stock level and economic order quantity to reduce the production cost

According to Chopra and Meindl (2012), inventory level also has a direct impact on the cash flow of the organization. Limited cash flow of Samsung in the inventory also has an effect on the expenditure of the organization. On the other hand insufficient inventory reduces the sale of the organization. Good planning in inventory management is essential to control the inventory list of Samsung. Proper planning also helps to provide a good service to the customers. Bad inventory management may be quite costly to the organization (Cohen and Roussel 2013). The business plan of the operational managers should be well arranged to prevent awkward situations. Awkward situation such as lack of inventory will highly affect the business of Samsung and even revenue generation may also decrease.

In order to reduce the negative impact of the inventory management the operational managers of Samsung always keep a track of the inventory and work flow. Automated inventory system is also introduced to reduce the negative impact of inventory management (Elguindi and Schmidt 2012). Inventory is also checked twice in a week by the operational managers of Samsung to mitigate the negative impact.

Conclusion

This essay thoroughly discusses the different aspects which are affecting the business of the organization. Technology has helped Samsung to innovate new models and ideas. Along with this, Globalization is also a serious challenge for the operational managers of Samsung. Globalization has helped Samsung to carry out its function in various parts of the world. However, the organization has also faced different labor problems in different regions. Changing customer expectation is also a serious issue for the organization, but the managers have solved the problem effectively. The quality of the product is also good and this has helped Samsung to have a competitive advantage over others.

References

Andalibi, M.A., Rafizadeh, K., Salimi, B. and Khleghi, M.R. 2013, "Effects of Technology and Change Management on the Business", Interdisciplinary Journal of Contemporary Research In Business, vol. 5, no. 2, pp. 618.

Arslanagic-Kalajdzic, M. and Zabkar, V. 2015, "The external effect of marketing accountability in business relationships: Exploring the role of customer perceived value", Industrial Marketing Management, vol. 46, pp. 83.

Chopra, S. and Meindl, P. 2012, Supply chain management: strategy, planning, and operation, 5th Global edn, Pearson, Upper Saddle River, N.J.

Cohen, S. and Roussel, J. 2013, Strategic supply chain management, Second edn, McGraw-Hill, New York.

Doherty, L., Zhao, Y., Zhao, X., Hu, Y., Hao, X., Xu, L. and Liu, R., 2015. A review of a recently emerged technology: Constructed wetland–Microbial fuel cells. Water research, 85, pp.38-45.

Donkor, E.A. 2013, "Effect of customer satisfaction on water utility business performance", American Water Works Association. Journal, vol. 105, no. 10, pp. E553.

Elguindi, A.C. and Schmidt, K. 2012, Electronic resource management: practical perspectives in a new technical services model, Chandos, Oxford.

Hertwig, M. 2012, "Institutional effects in the adoption of e-business-technology", Information and Organization, vol. 22, no. 4, pp. 252-272.

Hu, Q., Schaufeli, W.B. and Taris, T.W. 2013, "Does equity mediate the effects of job demands and job resources on work outcomes?: An extension of the job demands?€ђresources model", Career Development International, vol. 18, no. 4, pp. 357-376.

Karatepe, O.M. and Karadas, G. 2012, "The effect of management commitment to service quality on job embeddedness and performance outcomes", Journal of Business Economics and Management, vol. 13, no. 4, pp. 614.

Katzan, H. and Katzan, J. 2015, "Design For Service Innovation", Journal of Service Science (Online), vol. 8, no. 1, pp. 1.

Klocke, F., Arntz, K. and Heeschen, D. 2015, "Integrative technology chain design for small scale manufacturers",Production Engineering, vol. 9, no. 1, pp. 109-117.

Kramar, R., Bartram, T., De Cieri, H., Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. 2013, Human resource management: strategy, people, performance, Fifth edn, McGraw-Hill Education, North Ryde, NSW;North Ryde, N.S.W;.

Lilian M de Menezes and Wood, S. 2015, "Quality management, job-related contentment and performance: An empirical analysis of British workplaces", Evidence - Based HRM, vol. 3, no. 2, pp. 106.

Malik, T. 2013, "Positive effects of opinion-count on job satisfaction of team members in business enterprises",Journal of Communication Management, vol. 17, no. 1, pp. 56-74.

Meller, B. 2013, "The two-sided effect of financial globalization on output volatility", Review of World Economics, vol. 149, no. 3, pp. 477-504.

Nankervis, A.R., Baird, M., Coffey, J. and Shields, J. 2013,Human resource management: strategy and practice, 8th edn, Cengage Learning Australia, South Melbourne, Vic.

Narayanamurthy, G. and Gurumurthy, A. 2015, "A case study on downstream supply chain of an Indian alcoholic beverage manufacturer: Some insights for the global business", Journal of Indian Business Research, vol. 7, no. 2, pp. 161.

Pasaribu, R.D., Kartini, D., Oesman, Y.M. and Padmadisastra, S. 2015, "The Effect Of Customer Demand And Supplier Performance In Competitive Strategy And Business Performance Case Of Fixed Broadband In Indonesia", International Journal of Scientific & Technology Research, vol. 4, no. 8, pp. 123-129.

Petrova, K. 2013, "The Effects of Globalization on Entrepreneurship", International Advances in Economic Research, vol. 19, no. 2, pp. 205-206.

Samsung Electronics America. 2016. Electronics & Appliances: Tablets, Smartphones, TVs | Samsung US.

Stefik, M. and Good, L. 2012, "Design and Deployment of a Personalized News Service", AI Magazine, vol. 33, no. 2, pp. 28

Totonchi, J. and Manshady, K. 2012, "Relationship between Globalization and E-Commerce", International Journal of e-Education, e-Business, e-Management and e-Learning, vol. 2, no. 1, pp. 83.

How to cite this essay: