[Slide 1] Hi

Slide 1 Hi, my name is Yozoh. Today I will talk about the quality management of Samsung.
Slide 2 Firstly, I will introduce the background of Samsung note 7 recall issue. Next, I will analyze the quality management of the company, from two perspectives: design quality and conformance quality. Next, a comparison with Apple will be given in terms of dealing with ….

Slide 3 Samsung is one of the leading technology giants founded in South Korea. It has been able to retain the highest market share in smartphone business in the past couple of years. In 2006, Samsung had the top market share around 21% -23%, beating Apple by a huge margin of around 9%.
Samsung quality policy states that it ensures the delivery of the best products and services that exceed the customer requirements and expectation based on an effective management system. However, their products often bring unexpected supervise to customers. As The New York Times points out, Samsung had to recall plenty of products in recent years, including washing machines in 2007, refrigerators in 2009 and microwave ovens in 2010. This shows that Samsung failed to conduct effective quality management.

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Samsung launched the Galaxy Note 7 in August 2016, and then, in September Samsung initiated a recall of Note 7 due to defective batteries that overheated and exploded. By October it had to recall over 2 million devices and discontinue the product. It’s estimated that the recall will cost Samsung $5.3 billion. This case provided insights into Samsung’s’ poor-quality management. (news)
Slide 4 Design quality evaluates the compliance of the product design with the needs of customer. Both internal and external factor has a significant influence on the design quality.

Internally, increase the quality of product could minimize defects, which will not only reduce time and cost to deal with defective product, but improve customer satisfaction and brand reputation. Externally, due to the increased smartphone industry competition, high quality is one of the key factors that attract customers and help company overperform other competitors. Besides, customer safety is the first priority, poor safety will damage brand reputation and result in significant loss.
Slide 5 Note 7 has many amazing designs to satisfy customers’ demand, which includes water resistance, wireless charging, curved screen.

Samsung actively listens to the global VOC (voices of customers) using various channels, including R&R, periodic quality review meetings, or surveys or F2F interviews on specific customers, and analyses the obtained data in an effort to satisfy customers’ need with products and services of the highest quality by driving a sustainable quality innovation movement. However, arguably, the fact is that the project is just set up in appearance, with little real enforcement. It can be seen from the customer review that Samsung VOC department did not give the response to customer timely and effectively.

Slide 6 Cost of quality is the cost incurred to prevent low-quality product. It is divided into two categories, cost of conformance and cost of non-conformance.

Slide 7 Firstly, prevention cost incurred to prevent the quality problem at the first place. After the investigation, Samsung reasoned that defective batteries were to blame for overheating and explosion. Batteries from two different manufacturers had flaws. Although the principal cause of battery problem was different in each type of the battery, the result was the same.
This reflected the fact that Samsung failed to conduct effective supplier evaluation. (ineffective supplier evaluation) Besides, it’s clear that Samsung’s desire for ever thinner phones with longer battery life has strained battery manufacturing processes. Therefore, design engineering was questionable and isn’t adjusted appropriately. (Inappropriate design engineering)
Secondly, Samsung failed to detect the battery problem through appraisal, leading to the great loss of the company. After learnt the lesson from the recall issue, Samsung increases the inputs in inspection cost, the company created an advisory group and designed an 8-point battery safety system, including durability test, visual inspection, x-ray test, TVOC test, etc,
Thirdly, lack of sufficient conformance test at an early stage leads to the potential risk to defection and require money to fix these faults through internal failure test. After investigated the hazard of the battery, Samsung discontinued producing the note 7 and revealed its plan to break down part of phones into component parts — like camera modules, chips, and displays — that can be reused or sold. (rework scarp)
Last, the external failure cost of Samsung is extremely high. Samsung recalled over 2 million released phones, which incurred a loss of around $17 billion. To solve the problem, Samsung built a Note7 Refund and Exchange Program, customers could either change the Note 7 with a refund of the price difference between devices or obtain a refund at the point of purchase. (product recalls, customer returns) Besides, by further realizing phones wouldn’t be turned in by all consumers, Samsung offered a software download that would allow only a 60 percent battery charge to avoid overheating and a subsequent fire danger. (customer support) Additionally, Samsung was involved in the class action suit that alleges inadequate warnings, failure to operate as advised and dangerous condition. Thus, the legal cost and compensation for injured customers and damaged property are enormous. (legal action expense)
With consumers quickly losing trust in Note 7, the company’s reputation is damaged, which will have a serious impact on futures sales. Besides, the timeframe for introducing new products will be delayed as the company changes its internal layout to accommodate changes in battery placement. Given it has taken a 120-day testing window, it’s likely that the release of the new device will be delayed at least 6 months. ?reputation loss?late release of new device ?
As Samsung’s biggest rival in the smartphone industry, Apple states a
Samsung’s battery failure is a good lesson to learn for everyone in the technology and consumer electronics market – it always better to spend more time and focus on quality control, rather then lose the track of things driven by the blind efforts to catch up with your competitors.