An Exploratory Study of Supply Chain Management Practices’ Content Analysis and Future Perspectives: A Case Study

Meera Aldhaheri, Meera Alkuwaiti, Amna Alhassani, Maitha Almansoori, Waad Alalawi, Gamal S. A. Khalifa*

Higher Colleges of Technology, Al Ain 25026, UAE

*Corresponding Author’s Email: gkhalifa@hct.ac.ae

Abstract

The research interest in some products is developing in lockstep with the global market need for electronics. However, research on electronic strategies or operational analysis is limited. LG has established an effective supply chain operations management system in this case study. Based on the Toyota Production System, LGE has developed proprietary operational management methods (LG Production System). This confluence of product architecture and operational processes are responsible for the company's globally competitive market position. This case study highlights the need of integrating both the business model and operational procedures for long-term competitive benefits.

Keywords: Supply Chain; Operation Management; LG; Productivity; Competitiveness; Case

Introduction

The LG company was previously known as lucky Goldstar from the year 1983 to 1995 that was basically a south Korean multinational company founded by the Koo In-hwoi and was later managed by his family (Lee, 2005). The LG company has an innovative goal to aim at the basic target of 30% of the market competitors in market shares. The competitive edge of the LG market shares with the competitors in terms of digital technology. The competitive strategy of LG offers the technologies that suit the people when in need in terms of an annual report. The product core development process is to establish the technologies that enable people to spend their lives more easily. The LG company follows a direct strategic guiding principle to develop harmony among the individuals. The LG innovation approach flourishes the anticipation of the required questions that enables people to enrich people lives with technology (Almarri et al. 2020; Khalifa, 2020b; Rahmah et al. 2020).

The LG company develops strategies that enable people to attain more out of their lives, to spend leisure time, and experience more technology pleasure. The LG company follows diverse educational programs for its company employees via the establishment of learning centres around the world. LG's strategy is to support the favourable working environments that enable its employees to demonstrate functional capabilities and to expand company operations successfully in the targeted market. The individual creativity of the company is to develop the respecting skills for diversity (Khalifa & Al-Shibami, 2020a; 2020b). The company rewards the employees depending on their performance and equal work opportunities in order to build trust among the people without gender discrimination, for example, religion, age, race, and nationality which leads to commitment and motivation (Alameri et al. 2019; de Sousa Jabbour et al. 2019).

Discussion

LG productivity

LG electronics is the south Korean company group that was initiated by the company to embrace the six sigmas back in the year 1996 regarding the GE times. According to the company outline, the LG company exhibits a solid history of quality improvement and innovation activities dating back the years (refer to figure 1).

Figure 1: History of Quality Improvement

LG Electronics have launched more initiatives for example tearing down and redesigning TDR, and the digital manufacturing system DMS. The TDR initiatives are adopted by the company in the context of six sigma technology utilization throughout the company's research and development areas that support company design, production, and manufacturing. The LG electronics company is leading the 6 sigma innovation companies that support the divisions that include product manufacturing and development. The company employees are encouraged by following more projects that are needed to be fulfilled in multiple projects that accomplish the core objectives of 6 sigmas (Holweg et al. 2018) (refer to figure 2).

Figure 2: LG Productivity Model

The company's cores productivity target of the company is to minimize the production of the defective product below the 3.4 per product to 1 million in operating/ respective fields. The productivity of the project is extended by the company suppliers to ensure the company quality standards consistency. The company's productivity supports the strong growth of the premium products development that includes popular washing machines, LGE sales of digital appliances, and model refrigerators by the year 2022 increased up to 21% in the previous years raised up to 6.04 trillion in the targeted market. The company's productivity follows impressive performance that is augmented by the vigorous cost savings in digital appliances. The company's productive divisions are attained by 10% operating profit margins.

LG Forecasting and future performance

The operational management approach adopted by LG electronics is basically followed under the company forecasting policies that are issued related to the demands of the services and products that are resolved in forecasting importance. LG electronics-related issues are followed under the further demands in terms of products that are resolved with the help of the right way forecasting methodologies. The production and business trends in the next months are basically identified by performing a forecast. The item's total sales in labor requirements changes in terms of working high business structure competitive. Shifts after basic requirements that are demanded on basis of fluctuations in terms of consumer demands and habits. The forecasting performance is possible in terms of both qualitative and quantitative methodologies (see below figure 3 & table 1). The quantitative mythologies are taken in the context of the soft information that is utilized in decision-making power (Yiu et al. 2020).

Figure 3: LG Performance Series

Table 1: Forecast for demand

In terms of the LG electronics company laying the quantitative methodologies are performed in future forecasting. The methodologies are identified in terms of demand that alters the seasonal changes, demand cycle, and market changes. The future requirement of LG electronics is relatively taken under consideration by the company that utilizes the quantitative methodologies forecasting. Quantitative by taking the help of a quantitative forecasting approach it becomes possible for the fast-food chain to determine the future needs and demands in the most accurate way. Based on the previously followed trend for the sales of certain items, the company operation management department takes help from the presumption method. The data obtained from previous demands are used to determine the future requirements of customers (Hossain et al., 2020; Khalifa et al. 2021; Khalifa, Trung & Hossain, 2021; Agus & Gamal, 2020; Widjaja et al. 2019, 2020; Zhao et al. 2019).

Product and Service Design

The product and service design approach of LG electronics reflects trends, conditions, and perceptions in terms of both foreign and domestic markets. Technical devices' clear designing approach fin LG follows the prevailing lifestyle trends. The LG designers strive to target harmonious emotions and a minimalist approach. The high technology elements combined are appealing features that focus on harmony, durability, strength, and dynamism. LG electronics have multiple designs in technology designing centers around the world for example in Japan, the USA, China, England, etc. The product and service design efforts in terms of products are exactly in right design appeal in terms of end-users in terms of the geographic market that represents the highest quality. The LG company peruses the electronic device management in global localization that operates in regional designing to attempt to integrate into the designing concept of LG (refer to figure 4).

Figure 4: LG Electronic Device Management

Capacity Planning

The term capacity planning is defined as the development to evaluate the complete all available production resources which contain work center, machinery as well as staffing for the understanding of when the constructor can fulfil the demand of customers in present or in the future as well. However, capacity planning must be accomplished in an authentic way for the brand like LG display. LG electronics is continue struggling to increase the production capacity of its TV OLED panel factory in different countries. LG electronics always offers its product and services on the global stage. The capacity planning of LG is always fulfilled by LG electronics very efficiently so, to this LG electronics never lost its importance in the market. With this capacity planning, it should be easy to make the situation between the long-term demand as well as supply needs of the company (Gooberman, 2018).

The total capacity of LG electronics is to make 60,000 substrates per month as well they develop panels that are based on the 8.5th generation substrates. In this electronics company, the managers who work for LG electronics have always arranged the important substrate or instrument which is important for the making of products. To keep capacity planning perfectly, it is important to supervise the productivity rate or capacity in the company as well as whether products which are delivered to the customer are perfect or not. The operating manager who works for LG Electronics said that the company has successfully achieved production in the United Arab Emirates as well as according to statistics they observed a huge demand for large- sized OLED panels. This makes the lead for the LG electronics company (Dong & Kouvelis, 2020; Khalifa & Ali, 2017).

However, if we consider different factors which might impact the capacity planning actions which is followed by the LG electronics contains product designs, panels, substrates, product variety, and product design. By the implementation of capacity planning in the company, it is helpful to achieve the scales of the economy as well as it is beneficial to a lower average cost per substrate or unit through production increased. On the other hand, by this leading strategy, LG Electronics has increased its capacity per month by almost 30,000 substrates. Now LG electronics will be increasing 15,000 substrates per month in the capacity order to every line for a total of 90,000 substrates per month. The capacity strategy of LG electronics is strife to target to ship almost 7 to 8 million units of large-sized OLED panels by the end of this year. The LG electronics capacity planning strategy Enabled Company to generate a review of 80% higher units which is shipped last year than the 4.5 million units.

Process selection and facility layout

The process selection related to the electronic devices which are done by the LG electronic display as well as process selection planning is the workflow around the production process. The main purpose of process planning in LG electronics is to convert the input to the output. This planning is the core of operations management as well as the workers who work for the LG ensure that the electronic devices are manufactured by implementing the accurate technique of maintaining quality as well as the speed of the devices. The main purpose of this process selection planning is to deliver a good product as well as services.

In LG Electronics products are passed from one workplace to the other. For example, process selection is the best for LG electronics which develops small numbers of a large range of products. On the other hand, normally LG Company utilizes general-purpose machines which might be changed increasingly to new operations for the design of different types of products. Such as process selection is utilized by a manufacturer of custom machinery. Moreover, for the success of process selection, modern technological instruments are utilized to keep the perfection of the final products as well as fulfill the quality demand of customers in their products (Alghfeli et al. 2019; Alseiari, Khalifa, & Bhaumick, 2019; Alseiari, Khalifa, Al- Shibami, et al., 2019).

This is the main process of selection planning which is followed by the LG electronics company. However, after the process selection achievement the next target which focused on the company in the production planning is the facility layout. Facility layout is an essential function for the operating management which is fulfilled by the LG electronics. An effective facility layout design for the electronic devices is followed. The main goal of LG in facility design layout is to achieve the most effective as well as efficient design for the specific production process.

LG electronics organization should consider the layout; however, they are more worried as well as work passionately that how it is affected the customer behaviour. This strategy might be more flexible for the company to make the product more effective or beneficial. There are four important types of facility layout such as product, process, and cellular as well as fixed position. On the other hand, in LG electronics preparation of electronic devices is ready in less amount of time as well as the price of production depends upon the facility layout which is selected by the company heads. Overall, process selection, as well as facility layout, has significant importance for the LG electronics company.

Location

The selected location to extend the LG electronics business unit is based on the effective profitability and growth rate of the company. The company's attractive opinions are easy to access the customers in terms of potential LG customers that never get issues related to the company product and service delivery in an effective manner. The LG electronics branches represent the whole market demonstration of electronic franchises around the globe that never aims to target the bad franchise location in terms of branches in order to attain profitability of business and customers user safety (Abdulla et al. 2019; Alharthi et al. 2019; Alkutbi et al. 2019). The LG company UAE branches are assumed as ideal locations for the LG electronics for example the industrial areas attract more attention to the electronic industry. Furthermore, the LG franchising will be done in Dubai mall and mall of emirates that are assumed to be an ideal location for the LG electronics on regular basis. LG has served as a remarkable priority that never compromises the company's digital innovations regarding the quality service delivery to potential buyers (Dagnoush & Khalifa, 2021a, 2021b; Sudigdo et al. 2019; Trung & Khalifa, 2019; Wei & Zhang, 2018).

Work design and measurement

The work design indicates the organizational content in terms of work activities, tasks, responsibilities, and relationships (Almatrooshi et al. 2021; Elshaer et al., 2022; Lei et al., 2021; Mohamed et al., 2018, 2019). The work design is applied in terms of biomechanical, physical, psychological, and cognitive job characteristics (Alharthi et al. 2020; Alkhateri et al., 2019; Almatrooshi et al. 2020; Alneadi et al. 2020; Alsaadi et al. 2019; Morsy, Ahmed & Ali, 2016). The work measurement is a systemic determination of the task that is accomplished (Alameri et al. 2019; Alharthi et al. 2019; Binnawas et al. 2020; Jassem Al-Ameri et al. 2019; Khalifa, 2019). The common types of measurements come under the manager's net (Alkheyi et al. 2020; Myo, Khalifa & Aye, 2019). The LG work design and measurements are basic features that are kept in terms of LG for beginning the effectiveness in company operation management practices that are followed by LG electronics. The structure of the LG electronics business is dependent on the key operations that cater to the needs of customers 24/7. Workplace satisfaction in the environment among the employees is essential due to business ways attention to company responsibilities and duties assign to them (Alghfeli et al. 2021; El-Aidie, Alseiari, & Khalifa, 2021). LG electronics' longest shift is followed under the considerable attention in terms of demand in the context of customers. The work design is maintained under the customers' requirements that accomplish the work effectively (Alsaadi et al. 2019; Falasi et al. 2019; Milkman et al. 2022).

Quality Management at LG

The determination of quality policy in the LG electronics is the implementation of the operational activities as well as organizational functions that follows a set of activities and functions that are adopted by the LG quality management department (refer to figure 5). The consistency in the company quality management is followed by the relevant organizations in services and product delivery in a more potent manner (Abdulla et al. 2020; Alharthi et al. 2019; Khalifa, 2020a).

Figure 5: LG Quality Management

The quality management areas are kept into consideration in the LG electronics areas including quality control, quality planning, quality improvement, and quality assurance (Alharthi et al. 2019; Khalifa, 2019). The LG electronics' right to the quality management practices can focus on the product and services quality (Alharthi et al. 2019; Al Falasi et al. 2019). The organizational operation managers of the departments enable the utilization of the achieving ways in terms of quality operational management practices. The differentiating practices in terms of LG quality management are followed under the customers' leadership, people involvement, process approach, continuous improvement, benchmarking g and management systemic approach in decision making and mutual benefits of the supplier relationships (Boscari et al. 2018).

Quality control: In the LG company quality control approach the team working aims to perform the inspection of the electronic device manufactured by the company. The team quality management in terms of services and products delivery that controls in terms of accurate manner. The quality services, as well as quality control, are followed by the management by the team utilizing the following strategic approach in the business.

Quality service: The value-added quality services by the LG company are ensured by attained quality hardware manufacturing that is used in all electronic devices manufactured by LG electronics. Company employees’ management team enables the working team in quality control in organizational development. Electronic companies aim to adopt quality assurance to the service delivery of the employees (Alharthi et al. 2020).

Quality control: The set of operations basic criteria is followed by LG company is fulfilled with the assistance of the LG electronics management team. Quality management to operate as a team collaboration along with customers brings continuous business management practices improvement (Mohamud et al., 2017; Shamsi et al., 2018). Furthermore, quality control teams are generated in the scientific community to offer safe food terms to customers (Agwa et al., 2018; Alshamsi et al., 2019). The special health issues that are encountered are organized by the LG electronics team members that aim to deliver quality assurance in the electronics. The LG electronics strategy is to inspect all quality perspectives and procedures that are followed by the franchises. The common quality control strategy is HACCP. This strategy is known as hazard analysis and critical control points. The quality management teams, and nutrition specialists ensure that health-related issues are avoided by the LG electronics.

Production planning and inventory management

In the companies the production planning and the inventory management in LG electronics in electronic companies to overcome the inventory issues. The inventory management procedure levels as the active role by the right type of the electronic communication approach (Hossain et al., 2020; Nusari et al., 2018). The group messages are the basic approach that can be implemented to deliver the operational values around the region. In LG the ICT control system operates under the guidance supervision that is delivered by the company inventory management. The inventory management in terms of LG electronics is essential to deliver quality services and overcome delays. LG electronics suppliers tend to work in close collaboration in terms of operation managers and operation managers working within an organization (Merigó et al. 2019) (refer to figure 6).

Figure 6: Inventory Formula

The company inventory system tends to maintain a close check of the future demands of the company that plays a major role in terms inventory management procedures. To control inventory control issues, the fact is essential to evaluate plans that are evaluated to overcome hardware material shortages. Production plans are followed before the active role in the adaptation of the quality models and economics. Inventory management is the basic systemic functional approach to quantity management (Hong, 2020).

Conclusion

According to a report study, LG electronics is successfully running its functional operations around the world to deliver quality services to its potential customers. LG company never fails to accomplish customers’ demands that are followed under franchising. The LG electronics have adopted differentiating and adaptation of low-cost strategies to gain the market competitive advantages in the electronic industry. The company has bought diversification in terms of products and the company geographical boundaries. The priced products in terms of customers follow no compromises in terms of quality standards in terms of customers' delivery. The company employees strive to fulfil the quality standards of the company in the organization that is directed in terms of work shifts. The employees of the company are not burdened in terms of inventory management that never run out of electronic materials and products.

Practical implications

The operation management analysis of LG electronics requires improvement recommendations that are as follows:

• The inventory managers of the company are aware completely of the ICT control system used to improve the one-time service delivery to the potential LG electronics users around the world. This fact will help the company to follow the supplier collaborations in terms of working organizations.

• LG electronics should use presumptions-based model demands as well as forecasting should be used by the company managers to remain aware of future trends and demands.

• The LG electronics should assume hoc factor so that the company managers regulate the task for future company demands smoothly.

Conflict of Interests

The authors declare that they have no conflict of interests.

Acknowledgement

The authors are thankful to the institutional authority for completion of the work.

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