POLYTECHNIC UNIVERSITY

OF THE PHILIPPINES
(TOTAL QUALITY MANAGEMENT)
FINAL EXAMINATION
Samsung finally figures out why its
phones kept exploding
By Post Staff Report

January 20, 2017 | 10:24am

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Samsung's Galaxy Note 7 smartphones

Samsung finally has solved the mystery of its exploding-phone disaster last fall: The batteries
didn’t fit right.

The South Korean electronics giant is expected to reveal Monday that its Samsung Galaxy Note
7 smartphones were catching fire because some batteries were irregularly sized, causing
overheating, according to reports.
The upcoming report next week is also expected to show that other phones were plagued by
various manufacturing problems, according to a report by the Wall Street Journal, citing
unnamed sources.

Results of the investigation, conducted with three quality-control and supply-chain consulting
firms, helps explain one of the biggest product recalls in history, a debacle that has cost Samsung
at least $5 billion.

The company was forced to recall all 2.5 million of its Galaxy Note 7s after a flurry of
consumers reported injuries from exploding phones. Incidents on airplanes caused the Federal
Aviation Administration to ban the device from flights.

Batteries for the Galaxy Note 7, launched last August, were supplied either by Samsung SDI Co.,
an affiliate, or Hong Kong-based Amperex Technology Ltd., which produces them at a factory in
China, according to reports.

Samsung officials initially thought the issue was confined to batteries made by Samsung SDI. It
recalled those phones while ramping up production of smartphones with replacement batteries
made by Hong Kong-based Amerex Technology.

The Chinese batteries also turned out to be faulty, and continued reports of overheating forced a
second recall in October, with Samsung pulling the plug altogether on the Galaxy Note 7.

Samsung has said 96 percent of the high-end phones in the US have been returned.

Before the Note 7 began exploding, it had been off to a strong start, with largely positive
reviews.

Despite the disaster, Samsung has said it expects its quarterly profits, due next week, will surge
50 percent, helped by strong sales of component chips to other manufacturers.

Meanwhile, Samsung’s vice chairman and de facto leader, Lee Jae-Yong, has been caught up in
allegations from Korean prosecutors of bribery, embezzlement and perjury in a widening
government influence-peddling scandal. He has denied any wrongdoing.
REFERENCE:

https://nypost.com/2017/01/20/samsung-finally-figures-out-why-its-phones-kept-exploding/
SUMMARY AND BACKGROUND OF ISSUE:
On 2 September 2016, Samsung suspended sales of the Galaxy Note 7 and announced an
informal recall, after it was found that a manufacturing defect in the phones' batteries had caused
some of them to generate excessive heat, resulting in fires. A formal U.S. recall was announced
on 15 September 2016.

Samsung exchanged the affected phones for a new revision, which utilized batteries
sourced from a different supplier. However, after reports emerged of incidents where these
replacement phones also caught fire, Samsung recalled the Galaxy Note 7 worldwide on 10
October 2016, and permanently ceased production of the device on 11 October. As a safety
precaution, they distributed multi-layer fireproof boxes with packing instructions. Due to the
recalls, Samsung has issued software updates in some markets that are intended to "eliminate
their ability to work as mobile devices", including restricting battery capacity, and blocking their
ability to connect to wireless networks. Samsung has stated that it intends to recycle reusable
silicon and components from the recalled models, and release refurbished models "where
applicable".

The recall had a major impact on Samsung's business in the third quarter of 2016, with
the company projecting that its operating profits would be down by 33% in comparison to the
previous quarter. Credit Suisse analysts estimated that Samsung would lose at least US$17
billion in revenue from the production and recall of the Galaxy Note 7.
STATEMENT OF THE PROBLEM:
The giant electronic company Samsung is in hot water when the Samsung Galaxy Note 7
recall became public news, consumers and the
curious-minded waited with bated breath to see the
company’s response to reports of devices
overheating and catching fire. For many, the initial
response, an ineffective recall and replace, was less
than satisfactory. With the company’s reputation
on the line, Samsung pulled the plug on
manufacturing the device altogether.

The Samsung faced problem due to the

Galaxy note 7 Smartphone due to the battery supplier’s issue. Samsung’s market value begins
to plummet as shares fall to their lowest level in nearly two months on Sept. 12. Investors
wipe 15.9 trillion won ($14.3 billion) off the South Korean firm’s market capitalization
as a series of warnings from regulators and airlines around the world raised fears for the
future of the device.

Why did a product with a major flaw get to market? Could the entire event been
prevented or handled better? While Samsung is not the only company to go through a recall,
perhaps the company’s treatment of this incident puts the spotlight on the importance of a robust
quality management system with strong problem resolution components. Other problems are the
reason for the faulty cellphone and the suspension of sales of the said phone
OBJECTIVES TO BE ACCOMPLISHED:
 Accept and Value Customer Feedback
- Collecting customer feedback shows you value their opinions. By asking
your clients for feedback you communicate that their opinion is important to you.
You involve them in shaping your business so they feel more attached to your
company. Listening to their voice helps you create stronger relations with them.

 Use Effective Problem Solving Techniques

- Problem solving skills refers to our ability to solve problems in an effective and
timely manner without any impediments. It involves being able to identify and define
the problem, generating alternative solutions, evaluating and selecting the best
alternative, and implementing the selected solution.

 What a Successful Root Cause Analysis Involves

- Root Cause Analysis is a useful process for understanding and solving a problem.
Figure out what negative events are occurring. Then, look at the complex systems
around those problems, and identify key points of failure. Finally, determine solutions
to address those key points, or root causes.

 Use Advanced Quality Product Planning

- APQP is a structured approach to product and process design. This framework is a
standardized set of quality requirements that enable suppliers to design a product that
satisfies the customer. The primary goal of product quality planning is to facilitate
communication and collaboration between engineering activities.

 Know and Understand the Real Cost of Quality

- Cost of Quality is an important business practice. By knowing your Quality Costs it
can help business's find and correct problems and the costs to attain quality.
 Have the Right Policies and Procedures in Place
- Policies and procedures are an essential component of any
organization. Policies are important because they address pertinent issues, such as
what constitutes acceptable behavior by employees. Utilizing both policies and
procedures during decision-making ensures that employers are consistent in their
decisions

 Never Lose Customer Focus

- Putting yourself in the customers' situations and viewing things from their perspective
is important because it helps us better understand the customer and what is likely to
form the right solution for him/her. It helps to take away some of the guesswork and
puts the seller on the same page with the buyer/customer.
RECOMMENDATION:
The Samsung can use the Six Sigma Strategy to improve their quality management. Six
Sigma strategies seek to improve the quality of the output of a process by identifying and
removing the causes of defects and minimizing variability in manufacturing and business
processes. Meaning they need to improve their operations and be more meticulous in building
electronics so it can minimize the errors in the production. One of the reasons why
implementation of Six Sigma is important is that it helps in reducing defects. Using Six
Sigma techniques, employees are able to identify problem areas as well as recurring issues that
affect the overall quality expectation of a service or product from a customer's viewpoint. They
can also involve their supplier to be more certain that the item that that will be delivered is free
from damage. The Samsung Company needs to improve their supplier relation management.
Supplier relationship management is important because, over time, a long-
term relationship between your company and its suppliers allows for the free-flow of feedback
and ideas. Over time, this will create a more streamlined, effective supply chain that will have a
positive impact on costs and customer service. The deficiency on the side of the supplier can
drag the company due to they are the one who use the supplier’s product.

For better quality management the company can also make us the 5s which are the seiri,
seiton, seiso, seiketsu, and shitsuke or sort, set in order, shine, standardize and sustain. The five
S methodology helps will help the Samsung to remove items that are no longer needed (sort),
organize the items to optimize efficiency and flow (straighten), clean the area in order to more
easily identify problems (shine), implement color coding and labels to stay consistent with other
areas (standardize) . 5s helps to eliminate waste, streamline production, and optimize
efficiencies. When you adopt 5s thinking, you make a commitment to put safety, organization
and effectiveness ahead of production deadlines, profits and output. The change must begin in
the management to attain the success and the effectiveness of the product. The company should
stay firm with the quality of their products and make sure that it is free from damage because the
simple error in production can cause millions of losses in the company and to prevent any
mistake that can hurt the customers plus the Samsung must establish a healthy relation with the
customers for their concerns and problems with their products to build a security in their market
position.