The purpose of this report is to study the supply chain management of Sony Corporation, it is a Japanese multinational conglomerate, the head quarter of the company is in Konan, Minato, Tokyo. The products of the company are electronics, gaming, entertainment and financial. Sony Corporation is one of the leading manufacturer of electronics. The parent company of Sony Corporation is Sony Group. The company manufactures products in many parts of the world so that it can meet the expectations of the customers worldwide. The products of the company are of high quality, it has competitive prices and the supply from all the suppliers of the world. The procurement policy of Sony Corporation puts an emphasis on fair business practices, they avoid arbitrary actions so that there is transparency (Zhang & Das, 2016).
Logistics defined by the art of management of supply chain and the science of managing and controlling goods flow, information and resources including people and energy between the point of consumption and point of origin thereby meeting the requirements of the customers. This involves integration in inventory, transportation, information, warehousing, packaging and material handling. In other words, logistics can be defined as the branch of science that deals with procurement, maintenance and transportation of materials, facilities and personnel. The concept of logistics applied in various fields like military, medical and business. The military logistics is where logistics officers manage when and how to reallocate resources to the required places (Manuj & Pohlen, 2012). In military science, there is a concept of disrupting the supply chain of the enemy while maintaining one’s own supply chain. This concept is one of the crucial steps of military strategy since armed forces without transportation and resources are defenseless. However, in medical science the application of logistics mainly related to equipment, medical devices, surgical and medical supplies, pharmaceuticals and other products meant for supporting the nurses, doctors and other dental and health care providers. The business logistics however deals with inventory management, transportation, warehousing and purchasing. In other words, one can define business logistics as having the right item in perfect quantity at the perfect time and place for the perfect price.
Production logistics of Sony Corporation used to describe logistic processes that are within an industry (Kim & Lee, 2012). The purpose of this type of logistics is to ensure that each workstation and machine fed with the perfect quantity of the right product and at the right time. The concepts used for production logistics of Sony Corporation involves:
Marketing logistics of Sony Corporation mainly deals with controlling, delivering and planning of flow of marketing materials, physical goods and information from production to marketing necessary for meeting customer demands by still maintaining the company’s profit at a level that is satisfactory (Christopher & Peck, 2012). There are four concepts undertaken by Sony Corporation while considering marketing logistics that helps the company in reaching the target customers and at the same time ensure delivery of service and products.
Finance Logistics mainly deals with the transactional perspective of Sony Corporation on a day-to-day basis. Therefore, the accounting side mainly deals with how much the company is spends on warehousing and transportation and at the same time helps to understand opportunities for cutting down costs via less expensive vendors and discounts. Sony Corporation thus believes that the relationship between logistics and finance helps in streamlining supply chain and lessen cost (Zhou, Hirst & Shipton, 2012). The company however adopts self-billing methods and automatic payment facilities for accurately handling data with the help of internet. The collaboration of finance and logistics also enables the managers to have a better sense of understanding of their decisions that affects the supply chain. In addition to this, the managers can also apply it in calculating the true capital cost that is a bottom line measure often buried in balance sheets of corporate (Zhou, Hirst & Shipton, 2012).
Sony Corporation believes that efficient management of inventory achieved by means of control of inventory and its management (Berman et al., 2012). Inventory control involves managing of inventory that already exists in the store, warehouse and stockroom. For the company the term inventory management deals with determining when, what, whom, and how much order to be placed. Through inventory management, the company forecast the future requirements based on past and current trends. The company thus, broadly categorizes inventory items into stock and stuff. The stock here represents the material that the company intends to have in its warehouse. In fact, these are the materials anticipated by the company as per the customer requirements (Berman et al., 2012). On the other hand, stuff represents the inventory that someone did not pay for but is not willing to pay. The company however manages stock by adopting the following Strategies:
This is a strategy used for reducing the associated cost and work in process inventory. The company drives the process through various signals indicate when the next part made (Heizer, 2016). Through the effective use of this process, Sony Corporation has made dramatic improvements on return of investments.
For MRP the company uses software for ensuring that there is availability of materials for production and delivery. The software also allows the company to maintain lowest possible inventory and plan delivery schedules, purchase activities and activities related to manufacturing (Sreenivasan, Choi & Voisin, 2012). The process also helps in physical inventories and cycle counting.
The company also believes in capacity planning that helps Sony Corporation in the determination of production capacity required in meeting the changing demands(8).
Although Sony Corporation follows an effective process of Inventory Management but there is still scope for improvement for the company. This is because inventory stock management is an effective in successful running of any business. This is done by applying the following methods:
Accounting Records:
For improving inventory management control the company must maintain an up to date accounting records. This is important because the accurate information regarding inventories can help the company in deciding actions related to further production. However, business can make use of either periodic inventory system or perpetual inventory for keeping records.
Physical Count:
The Physical count of inventory is also an important aspect in improving inventory management control. This should understood that irrespective of the inventory system used by the business there should also be a track of the inventory records that helps in determining the loss of actual inventory due to breakage, theft or waste that might not be reported and recorded in the inventory account from time to time
Level of Inventory
The primary focus here should be on determination and maintenance of an optimal level of inventory that will help the company release some capital for further investment and at the same time reduce cost for inventory handling as well as holding.
Quality of Inventory
The effective inventory management and control should also consider maintaining the quality of inventory newly manufactured and those that are already available in the stock.
Order cycle is the process by which the lines of orders are progressed. Every step in the order cycle has minimum one result. The order cycle in Sony Corporation are customized by identification of each of the activities of the order cycle. In recent years the stake holders have become more aware about the production process. This has put a pressure on the companies to ensure effectiveness of all the activities of the cycle including, procurement, supply chain and production. Sony takes these stakeholders concerns seriously and is working closely with its suppliers to ensure that the process is well maintained. Sony Electronics participates in two programs, conducted by the federal Environment Protection Agency( Prashar, 2014).
Sony corporation takes the following step under its order cycle process:
Order cycle process: Prashar, 2014
Picking- This process consists of taking and collecting articles in a specified quantity, before their shipping so that the needs of the customers can be satisfied. There are three types of picking, piece picking and case picking and pallet picking. Piece picking is known as broken case picking, Sony Corporation uses piece picking for operations that have large stock keeping unit, for thousands and ten thousands items. In this process small quantities are picked in a single pick and small cycle times (Michalski, 2013).
Sorting- The items are separated as per the destination, the package formation consists of weighting, labeling and packing.
Consolidation- The packages are gathered in the process and are loaded for transportation.
Customer order cycle is also known as the interface between the customers and retailers, this process includes taking and filling of the orders of the customers. The order cycle starts when the customers give their orders and ends as soon as the order is delivered to the customers (Hood & Birkinshaw, 2016).
First, the customer arrives and the process is known as customer arrival, then the needs is communicated by the customers. Then the orders of customer are entered, the aim of order entry of the customers is to ensure that customers gets their orders as soon as possible after their orders are placed. The production of the electronics are done in the in their production units. The marketing department takes care of the distribution of the products in the retails based on the demand of the customers. The next stage is customer order fulfillment; in this step based on the orders of the customers their orders are filled. The packing and transportation of the orders of the customers are done in this particular process. In Sony, the order fulfillment takes place from the line of production of the manufacturer. The aim of the manufacturers of Sony is that the customers get their orders at a fair and reasonable price. The last stage of order cycle is when the customers get their orders (Chopra, Meindl & Kalra, 2016).
Inventory management is the process that is used for order controlling and storage of the parts that are used for production. Sony Corporation has their in house logistics that develop and provide innovative services of business. Generally, in Sony Corporation the products are kept in the inventories before it is being distributed in the market. There are more than 50 plants of Sony. The finished goods are delivered to 200 countries and territories; they undertake a global operation of a huge scale that can only be done if their logistics management is efficient. The in-house logistics of Sony helps to a great extent to manage the stocks and the spare parts of the various electronic products. They manage their inventory with the help of central distribution center. It is a very beneficial method because it helps in accessing the difficult parts any time, this lowers the transaction cost as well as inventory carrying cost (Christopher, 2016).
Sony uses JIT concept for inventory management. This method helps the Corporations all around the world so that inventory of parts and components which passes through the assembly lines. In Indiana Sony uses Kaizen to cut the costs and increase the production. The just in time inventory comes under the umbrella of Kaizen. The motive behind is zero defects and minimize the wastage. Kaizen is applied at every stage, in inventory the purpose is that none of the items remain too long in the inventories they have to be transported or if it is the spare parts then they will have to moved to the next stage of production (Gupta & Jain, 2014).
Kaizen model: Gupta & Jain, 2014
Conclusion
The supply chain management of Sony Corporation is very efficient as all the components are taken care in a very controlled and speculative manner so that the product reaches the customers and succeeds in fulfilling all of their requirements. Use of JIT and Kaizen are the methods that help the company to ensure effective logistics management. The focus of the organization is on reducing the costs, in each step of production. The aim is to reduce the wastage but the quality of the finished goods should not be compromised. Customer satisfaction is given importance by the company and hence they focus on the order fulfillment.
References
Berman, K. K., Iyer, R. S., Richardson, D. J., Rahurkar, A. S., & Seetharaman, A. (2012). U.S. Patent No. 8,095,432. Washington, DC: U.S. Patent and Trademark Office.
Chopra, S., Meindl, P., & Kalra, D. V. (2016). Supply chain management. Pearson Education India.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Christopher, M., & Peck, H. (2012). Marketing logistics. Routledge.
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Gupta, S., & Jain, S. K. (2014). The 5S and kaizen concept for overall improvement of the organisation: a case study. International Journal of Lean Enterprise Research, 1(1), 22-40.
Heizer, J. (2016). Operations Management, 11/e. Pearson Education India.
Hood, N., & Birkinshaw, J. (Eds.). (2016). Multinational corporate evolution and subsidiary development. Springer.
Kim, S. T., & Lee, S. Y. (2012). Stakeholder pressure and the adoption of environmental logistics practices: Is eco-oriented culture a missing link?. The International Journal of Logistics Management, 23(2), 238-258.
Kumar, D. (2016). Enterprise growth strategy: vision, planning and execution. CRC Press.
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Michalski, G. (2013). Value-based inventory management.
Prashar, A. (2014). Redesigning an assembly line through Lean-Kaizen: an Indian case. The TQM Journal, 26(5), 475-498.
Sreenivasan, S. V., Choi, B. J., & Voisin, R. D. (2012). U.S. Patent No. 8,123,514. Washington, DC: U.S. Patent and Trademark Office.
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