Logistics Management and Sony Corporation

This assignment delves into the intricate logistics management strategies employed by the Sony Corporation. It examines key elements such as Just-in-Time (JIT) inventory system and Kaizen methodology to ensure efficient production, minimize costs, and maintain high product quality. The focus is on how Sony prioritizes customer satisfaction through timely order fulfillment and continuous improvement processes.

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Logistics Management
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Introduction
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).
Interfaces
Logistical Theories and Concepts
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

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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
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:
1. Simulation and modeling of the processes carried out in the factory that is from entry
of goods to providing supermarkets and zones for assembling and at the same time handling the
completed products.
2. Easy creation or direct importation of take rates, delivery frequencies, part variations
and quantity structures.
3. Creating modeling for the kind of transports used
4. The company calculates the staff demand and area along with detailed reports for labor
cost that might be broken down into processes or single parts (Kim & Lee, 2012).
5. The company also designs logistics areas and processes in 2D and in 3D

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6. The company also makes use of standard timing so that cost of every change easily
monitored and calculated.
7. Sony Corporation also ensures dynamic simulate of supply strategies and ensures
optimization of buffer stocks.
8. There is also ensures optimization, simulation and design of models related to working
time.
9. The company also makes use of SAP and ERP systems for easier access to the required
data in right quality and quantity in the right time (Kim & Lee, 2012).
Marketing
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.
1. Product Delivery: Sony Corporation considers logistics marketing to find out the target
customers is and find out ways that will help in product delivery. The company also considers
that logistical services that is provided might vary based on customers
2. Price: The Company also considers pricing decisions based on its external and internal
factors. Thus, Sony Corporation not only considers profile of the customers but also the kind of
order that will help in driving prices (Christopher & Peck, 2012.

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3. Promotion: Promotion is an important aspect marketing logistics process of Sony
Corporation. Thus when introducing a product in the market the company tries to coordinate the
logistics of different marketing materials
4. Place: Sony Corporation believes that the role of place in marketing logistics enables
the company in simplifying transactions between customer and logistics provider. Therefore, the
company executes logistics in a way that the customer remains unaware of the complexities of
the logistics process (Christopher & Peck, 2012).
Finance and Accounting:
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).
Inventory Management:
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

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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:
1. Just in Time (JIT):
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.
2. Material Requisite Planning (MRP)
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.
3. Capacity Requirement Planning (CRP)

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The company also believes in capacity planning that helps Sony Corporation in the
determination of production capacity required in meeting the changing demands(8).
Recommendations for Improvement:
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

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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
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:

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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.

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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
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-

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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).

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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.
Kaizen
Continous
Impovement
Cycle
Identify
Review
Execute
Plan

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