Quality Management Case Study: LG Corporation

Smartphone manufacturing and product introduction is a complex process that involves high-level strategic planning, cooperation with multiple partner and supplier firms, and an understanding of current market conditions. Smartphone production needs are similarly complex, with potentially exigent risks of labor and component bottlenecks due to reliance on common industry components, as well as external risks related to timing and production capacity in the crowded and competitive market. These risks are particularly significant for LG Corporation, which risks being pushed out of the American and Western European flagship smartphone markets entirely by its larger market-share competitors, Apple and Samsung. Addressing the production needs of

Functionally, it should mitigate cycle variation time, anticipate and correct bottlenecks, and have a functional response to labor and components issues. Based on current lean management best practices, LG should take a production management approach based on a combination of hybrid continuous and batch production, the theory of constraints, and cellular manufacturing model implementation. These three principles will help to ensure that those goals are accomplished. The hybrid of continuous and batch production is essential to produce similar products through continuous production with alternate steps through the cellular model in order to provide for product differentiation and customization (specifically colors and memory size). A cellular manufacturing model approach allows for batch customization that fits within the overall continuous flow of production, ensuring that batch-related problems are localized and will not have a negative effect on simultaneous production of other batches. Figure 2 in the appendix demonstrates a simplified version of the cellular batch-continuous production model, and demonstrates how any of three different components could fail or become unavailable without halting continuous production. A more complex model would show each of the batches splitting into sub-batches, for example by chassis color. Since the products all

There’s significant synergy between a TOC approach to bottlenecks and hybrid batch-continuous production, since most individual bottlenecks, no matter how severe, will not threaten a large portion of overall production capacity, and will only extend cycle time for specific batches. The basic five step process of the TOC is applicable to the hybrid production system, since it can be effectively applied to individual batches without interrupting other production (Dettmer 2001). Ideally, this mixed production system will limit cycle time variation strictly while also maintaining quality control and inspection. By following this strategy, LG can position itself for the smoothest possible product rollout, helping ensure that it has the production capacity to meet demand and allowing it to identify and mitigate potential bottlenecks before they damage the overall