production and operations management

1. Operations Strategy at Galanz
Presented by:
SonalRam

2. Introduction
Headquarter in Shunde, China, Founded in 1978
Produced down feather products for overseas clients
1990 : purchased microwave oven blueprint from Toshiba for USD 300,000
1992 : entered into new business of microwave oven
Purchased magnetrons from foreign suppliers (Toshiba & Panasonic)
1997 : invested in R & D of magnetrons
2000 : designed and produced magnetrons to support its own microwave
production
OPERATIONS STRATEGY AT GALANZ | SONAL RAM

3. OEM | ODM | OBM
OEM: Original Equipment Manufacturer
It’s a company whose products are used as components in the products of
another company, the company that buys products and incorporates or
rebrands them into a new product under its own name.
ODM: Original Design Manufacturer
It’s a company which designs and manufactures a product which is specified
and finally branded by another firm for sale.
OBM: Original Brand Manufacturer
It’s a company that sells an entire product made by a second company or
including a component thereof from a second company sources as its own
branded product.
OPERATIONS STRATEGY AT GALANZ | SONAL RAM

4. Good Practices
Free production line transfer tactic
Full utilization of production facility and labor resources:
Operating 3 shifts per day, 7 days a week and 365 days
Price war : avg. unit cost of production (ACOP)
 Production of 2 million units, price set on avg. unit cost of producing 0.8
million units
ACOP 5 million for 8 million units produced and ACOP 12 million for 15
million units
Investment on R & D
Vertical integration of supply chain
OPERATIONS STRATEGY AT GALANZ | SONAL RAM

5. Bad Practices
3 levels of personnel : slow flow of information
Production of customized products caused decline in production
Overlooked the importance of records
Low cost efficiency achieved, with low quality and less variety
Poor production planning
Synchronization problem between production and R & D
OPERATIONS STRATEGY AT GALANZ | SONAL RAM

6. Problems
To carry on with low cost strategy or
not
Whether develop of OBM business
in international market or not
To continue with OEM/ODM
business or not
Solutions
Work on high quality and more
variety
Should go for it to get world
recognized brand image, which will
aid in global penetration, with the
help of strategic partnership
It doesn’t require additional
investment, thus higher profit and
Galanz can price microwave on higher
side
OPERATIONS STRATEGY AT GALANZ | SONAL RAM

7. OPERATIONS STRATEGY AT GALANZ | SONAL RAM