The operation management (OM) problem discussed in the paper is derived from an article titled “Here is why Samsung Note 7 Phones are catching fire” authored by Sean Hollister and published on C/net news website on October 10, 2016. Samsung is a multinational firm with headquarters in Samsung town in Seoul, South Korea. The company was established in 1938 by Lee Byung-chul as a trading firm. Samsung started venturing in the electronics industry in the 1960s. In the 1970s, the company ventured into the ship-building and construction industries, which contributed to its massive growth. After the death of Lee in 1987, the company separated into four groups, namely Hansol Group, CJ Group, Shinsegae Group and Samsung group. Since 1990, Samsung has been giving much concentration to the electronics of different types. Today, the company manufactures products such as televisions, radios, mobile phones and household appliances. The company’s subsidiaries are present in the international market in all continents. The subsidiaries of the company include Samsung Electronics, Samsung Engineering, Samsung Heavy Industries, Samsung C&T Cheil World Wide and Samsung Everland. In the global electronics industry, Samsung electronics is 4th largest in terms of market value and was the largest in terms of revenue in 2012. One of the major products that have been contributing to the revenue of Samsung is its Galaxy mobile phone brand. In fact, Samsung is renowned world-wide for producing high quality Galaxy phones. Recently, however, a defect issue emerged with one of its latest Galaxy products, Galaxy Note 7, which exposed problems in manufacturing process. The issue led the company to decide to recall the product just a few months after releasing it. If not properly addressed, the issue will have a major negative impact on the company.
The decision by Samsung to discontinue production of Galaxy Note 7 and advice buyers to return already bought devices was occasioned by battery issues with the flagship device. By October 2016, the company had already manufactured 2.5 million pieces of Galaxy Note 7 and had already shipped approximately 1 million pieces. Samsung made the decision to recall all pieces of the product that had been sold to the market after numerous incidences emerged around the globe in which Galaxy Note 7 exploded. Through working with governments, the company refunded money in exchange for the Galaxy Note 7 phones. Also, the company supplied other Galaxy Note 7 phones for replacement in the cases where customers accepted. Despite this, the batteries of phones that the company gave for replacement, which were not expected to have a similar defect, were also exploding. Soon after replacement, batteries of 5 pieces of the new Galaxy Note 7 phones exploded. Consequently, Samsung announced on October 13, 2016 that it was recalling all Galaxy Note 7 phones.
The Galaxy Note 7 has a quality issue because the device has not satisfied the quality standards expected of it. From a quality management perspective, Samsung clients are not satisfied with the performance of the device. The decision by the company to recall the device and issue refunds is intended to guard its brand in the competitive Smartphone market. It is apparent that the Galaxy Note 7 failed to meet both the quality of design and quality conformance. The quality of design is linked to the characteristics of the device intended by the manufacturer. This comprises performance, reliability, features and aesthetics. In the case of the Galaxy Note 7, it reliability and performance failed to meet the manufacturer’s intended quality because the battery explodes when charged. Additionally, the device failed to meet quality conformance because it did not conform to the manufacturer’s design specifications. Samsung will incur external failure costs due to the failure of the Galaxy Note 7 to meet the intended quality standards. External failure costs are incurred when defects are discovered after the customer receives the product, which was the case with the Galaxy note 7. These costs will comprise replacement, recall costs, repair, and lose of goodwill by customers.
In order to understand why the batteries for Galaxy Note 7 explode, it is vital to understand the science behind the issue. The explosion is caused by the chemicals that are used to make the batteries. The chemical reactions that occur in the batteries release of energy. A phone battery is made up of two electrodes, a cathode and an anode. The cathode holds ions that are positively charged and it is connected to the positive (+) side of the battery. The anode holds ions that are negatively charged and it is connected to the negative (-) side of the battery connection. There is an organic solvent called electrolyte between the two electrodes. Electrolyte usually contains lithium or other metallic salts. The content of electrolyte enables it to conduct electricity. Both the anode and cathode electrodes are surrounded by electrolyte, but there is a physical barrier between them. As such, the two electrodes cannot touch each other. However, ions can move from one electrode to the other. The electrolyte usually contains lithium ions. During charging, the cathode makes the lithium ions to have a positive charge. The positively charged ions are then attracted by the anode. When the battery is being used, lithium ions move to the opposite direction. Even though the two electrodes exchange ions, they should not come into contact. If they come into contact, they release energy that is directed to the electrolyte. Lithium, which is contained in the electrolyte, is very reactive, and it can catch fire easily when extra heat is added to it. This explains why there is a need for a strong physical barrier between the two electrodes.
In the case of Galaxy Note 7, Samsung already acknowledged that the explosions were occurring after the cathode and anode electrodes touched one another. However, the company did not explain why the two electrodes touched. A notable issue about the batteries for Galaxy Note 7 is that the sheet between the two electrodes was weak and flawed. Physical pressure on the batteries that have flawed sheets between the electrodes can make the sheets rapture. Most likely, that is why the batteries for Galaxy Note 7 were exploding. However, it is essential to acknowledge the fact that the explosion can be caused by other factors such as overcharging or charging too first. Despite this, the issue with Galaxy Note 7 was different since there were many explosions within a short period after the release. The presence of many explosions signified that the batteries had a defect.
Analysis of the Issue
Apparently, the defect with the batteries for Galaxy Note 7 emerged from a flaw in the manufacturing process. The presence of the defects indicated that the company failed to follow important production process and quality control procedures and activities. Samsung could have prevented the problem through testing the effectiveness of the batteries during the manufacturing process. Although Samsung stated that the rate of defects was around 0.01 percent of the total production, the defective phones can lead to a major negative impact on its reputation. Eventually, the organization will lose customers and its sales volume will reduce significantly. There are effective OM techniques that enable firms to prevent similar mistakes as Samsung when launching new products. One of the most effective techniques used widely is Advanced Product Quality Planning (APQP). APQP is a process that is applied during the production of new products to test their viability during the design phase and all other phases before the product is launched. In the case of Samsung, it should apply the APQP process when producing new batteries for its products in the future.
When APQP process is integrated in process and product design during manufacturing, it enables firms to supply products that satisfy the customers. The main aim of planning is to enhance corroboration and communication between engineering activities. In APQP process, marketers, manufacturers, distributers, procurers, product designers and other stakeholders in firms involved in manufacturing processes work together as a team. This helps to ensure that the voice and needs of the consumer are well understood and translated into technical specifications, requirements and special characteristics. APQP helps to identify the need for a change in the design of a product or any other aspect of a product.
APQP process starts with one pre-planning stage, followed by five other stages. When the process starts, it never ends. The Plan, Do, Study, Act (PDSA) cycle illustrated in Appendix A demonstrates the APQP process. The APQP process is based on the notion that it is better to find risk in process and product than to find late failure. Figure 1.0 below shows the phases of the APQP processes
Figure 1.0: The phases of APQP process
The preplanning process involves gathering and compiling knowledge about a product that is intended to be designed. The knowledge is derived from previous production processes, books and other sources. The knowledge gained during the preplanning process is used as input in the plan and define phase. In the plan and define phase, all the needs, desires and requirements of the consumers are put into consideration. Product process and resource planning process assumptions are made. During the same phase, a list of design/reliability goals and preliminary special characteristics are established. The effectiveness of the plan and define process influences the extent to which a product will be satisfactory to the consumers. During the next phase of product design and development, the design of the product is made. The designers carry out a formal review of fine details, geometrical measures, design features, special characteristics and tolerances of the product intended to be developed. Frequent tests on design and verification of prototypes are made frequently during the design and development phase. In this phase, the tools that are used include Design for Manufacturability, Design for Assembly and Design Failure Mode and Effect Analysis.
The next phase is process design and development. This phase involves exploring the measurement methods and manufacturing techniques that will suit the vision of the designers of a product and put the product into reality. Among the tools used in this phase are Control Plan Methodology, Process Failure Mode and Effects Analysis and Process Flow Charts. The next phase involves product and process verification. The focus of this phase is to validate volume capabilities and process quality. Process Capability Studies, Management System Analysis and Statistical Process Control are among the tools used in this phase. Product Part Approval also takes place in this phase. The last phase is Feedback Assessment and Corrective Action. This phase involves assessing the ongoing manufacturing process and taking corrective actions where they are needed. Eight Disciplines of Problem Solving are applied in this phase. There are detailed inputs for each of the phases described above.
In the case of Samsung, the company will have to find a solution to the problem with the design of the batteries for Galaxy Note 7. In case the company will be able to determine the defective batteries and separate them from the good ones, it will be able to save the cost of manufacturing new batteries. However, it might be difficult to separate the defective batteries from those that are note defective. As such, the best answer for Samsung is to manufacture new batteries for Galaxy Note 7. In order to avoid making mistakes in the future, the company should apply the APQP process when designing all new products. In the current case, the company will be able to ensure that the electrodes in the batteries cannot tough each. Also, the company will be able to determine other problems that may not have been identified initially. Applying APQP process will help to improve the design and manufacturing process in several ways. First, the company will be able to determine any defects in the new products being manufactured as early as possible, and hence, facilitate early response. The APQP process incorporates early failure mode discovery shown in appendix B. Second, the company will have knowledge of the risks involved in the production process and thus, it will have a good opportunity to deal with them. Third, the APQP process will help to improve Design for Manufacturability and Assembly. Last, the APQP process will help to facilitate collaboration between all individuals involved in the production process. The ultimate impact is that Samsung will increase chances of satisfying its customers.
Overall, Samsung is a renowned company that has presence all over the globe. Among other products, the company sells mobile phones in the international market. Samsung Galaxy Note 7 is one of the products launched by Samsung recently. Despite having a good reputation of producing quality products, Galaxy Note 7 had a major defect in its batteries that prompted for a recall soon after the release date. The problem emerged from a failure in the manufacturing process. The company seems not to have applied the important OM tool used by firms when manufacturing a new product, called APQP. APQP helps in improving manufacturing process and product designs during the production and hence, avoid quality issues. Thus, Samsung should apply APQP to improve its new batteries and other products in the future to avoid making similar mistakes.
Appendix A: Plan Do Study Act (PDSA) cycle
Appendix B: Early Failure Mode Discovery