Global Supply Chain Management Report: Pensonic Case Study Analysis

This report analyzes the global supply chain management of Pensonic, a Malaysian electronics company. It begins with an executive summary and introduction to Pensonic, outlining its history and market presence. The core of the report examines three key areas: supply chain competitive strategy, synchronization of the supply chain, and supply chain risk management. The analysis of competitive strategy focuses on how Pensonic leverages its supply chain to gain an edge in the market, including proactive planning, lead time improvement, distribution network optimization, and digital customer service. Synchronization of the supply chain is discussed in terms of integrating partners for a smooth, customer-focused operation, highlighting benefits like quick distribution, quantity accuracy, and real-time visibility. The report also delves into supply chain risk management, identifying both external risks (supply, business, environment) and internal risks (manufacturing, planning, mitigation). The report concludes with recommendations for improving Pensonic's supply chain management based on the analysis, supported by references.

Running Head: GLOBAL SUPPLY CHAIN 0
GLOBAL SUPPLY CHAIN
STUDENET NAME
1-17-2019
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Executive summary
Supply chain management covers each and everything and process in between the raw material to
the use of final goods by the customer. The report included the three major areas of supply chain
management while considering an organizational case of Pensonic that are Supply chain
competitive strategy, Synchronization of the supply chain, and Supply chain risk management.
Pensonic is electronic home appliances founded in Malaysia and now expanded across the globe
in various nations like United Kingdom, US and many more.
The company has strong supply chain which resulted into competitive advantage for the
company. Moreover due to synchronization of the supply chain management the company has
able to increase the profits and improved its lead time. However, some of the risk identified in the
supply chain management of Pensonic are supply, business, environment risk as the external risk
involved, and manufacturing, planning, and mitigation risk as the internal risk of supply chain
management.

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Contents
Executive summary.........................................................................................................................1
1. Introduction..............................................................................................................................3
1.1 Pensonic.................................................................................................................................3
2. Supply chain competitive strategy...........................................................................................4
3. Synchronization of the supply chain........................................................................................5
4. Supply chain risk management.................................................................................................7
5. Analysis of supply chain management of Pensonic....................................................................9
5.1 Recommendation to the company...................................................................................10
6. Conclusion..............................................................................................................................13
7. References.................................................................................................................................14

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1. Introduction
Supply chain management is managing the services and goods flow and it considers all the stages
of transformation of raw material to the finished goods and reach up to the customer while
creating value to the customers. Supply chain management covers each and everything and
process in between the raw material to the use of final goods by the customer, and after sales
services. This includes the controlling the production, distribution, and shipment of a good or
services. Through effective management of the supply chain, the organization could reduce the
cost of process and production. This can be done by the managers keeping control over the
inventories, distribution system, internal production, and company vendors inventory (Ayers,
2017).
A supply chain is networks of organization, individuals, activities, resources, and technologies
integrated into the production and sales of goods or services. Supply chain management is
responsible to touch upon each point of the business from the initial development of a product to
the final sale. For a better discussion of this topic, an organization of Malaysia will be considered.
The report will concentrate on the supply chain strategies and relevant aspect of “Pensonic.” The
three major areas of supply chain management that the report will be focused on is Supply chain
competitive strategy, Synchronization of the supply chain, and Supply chain risk management
(Bowers, et al., 2017).
1.1 Pensonic
Pensonic is a Malaysian brand in the electronics industry, the group was founded by Dato’ Seri
Chew Weng Khak in the year 1965, in Penang. The company started as a small retailer and
workshop service for Keats radio and electric home appliances. The main business of Pensonic
Group was importing, manufacturing, exporting, marketing, and distribution of electrical home
appliances for national and international markets.
In 1982, the company started importing goods and assembling of visual and audio products under
the brand name Pensonic and was trademarked in 1984 in Malaysia. Moreover, not the brand
registered in more than twenty nations worldwide. In 1988 the company initiated the
manufacturing and marketing of home appliances. This was considered to be first “Made in
Malaysia” for electronic or home appliances industry. The major focus of the company for the

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international market is own design manufacturing strategy. The company has a major distribution
network of more than 900 dealers and 10 branches of domestic distribution network (pensonic,
2018)
2. Supply chain competitive strategy
Supply chain management can be one of the strangest parts of the organization, which can result
in a major competitive advantage for the organization. This can be done through various
methods, like benchmarking the SCM of the organization with that of the competitive companies
to improve the supply chain management while reaching the benchmark set. For Pensonic, the
major competitors globally are Panasonic, Samsung, and many more global leaders in the
electronics industry. From various organizational cases, it can be said that generally the
competitive advantage is gained through the leveraging the supply chain management
(Christopher, 2016).
According to various managers and authors, outsourcing the task of supply chain management
can lead the organization to concentrate more on the major production activity and more
important aspect to work on. Moreover, since the outsourced organization is specialized in the
supply chain task, and excelled in the stream and activities. It is better for the organization
(industryweek, 2018).
2.1 Supply chain competitive strategy of Pensonic
The supply chain or the distribution system of the supply chain of Pensonic results in the
competitive advantage for the company. The products of Pensonic were exported to more than
thirty nations in East and West Asia, ASEAN, and the Middle East, with the supportive package
of manufacturing, showrooms, warehouses facilities, along with the customer care centers.
Through its strength of the distribution system and network, the company has been able to adopt
the multiband platform to offer various categories of product and market segments. The pensonic
group has owned various renowned brands in the international market like the princess in
Holland, Morphy Richards in the UK, and GE appliances in the United States (Heckman, et al.,
2015).

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The company for the purpose of innovation and change has a new head office, officiated on 30
October 2015, which is called as “innovation and global operations center. The center is enriched
with the area for major research and development laboratories which were well equipped for
innovation advancement. Moreover, there were learning centers that were linked with internal
and external bodies (Gencer, 2017).
2.1.1 The ways to gain competitive advantage through supply chain transformation includes:
 Proactive planning – it can be said that the Pensonic one of the reason for SCM
competitive advantage is this as the company’s availability of manufacturing, warehouses,
the shopping center, and all the distribution network factors were available in the host
nations for better flow of work (Lusa, 2017).
 Improvement in lead time – the lead time must be minimized by the company in order to
attract new customers and retain the existing customers for the organization. The lead
time is the span of time taken in the cycle of raw material to the availability of finished
goods in the shopping center to offer to the customers. The company lead time has to be
managed and improved so that the customer demand is not neglected and products are
reached to the customer on time.
 Optimization of flow design of distribution network of the organization – this is the major
competitive advantage factor for Pensonic, as already discussed, the distribution center
network of Pensonic, is very strong and result into a benefit for the company in the
national and international market to reach out to the customers effectively and on time.
 Digitalizing customer service – in today’s world of technological advancement. The best
way out to reach to the customer is online. Moreover, for the last stage of the supply chain
is the after sales customer service, this includes the home appliances usage and
installation, which the company has provided online to reach the maximum customer at
the same time and reducing the expense of personal and manual customer service.
3. Synchronization of the supply chain
Synchronizing the supply chain, this is including integration of all the partners of the supply
chain in order to make the supply chain cooperative and flexible and seamless that is unnoticed
by the customers and smooth (Sodhi & Tang, 2014).

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For instance, within Pensonic supply chain the responsibility of storage of products, modification
of products, resembling activities, price marketing and much more are bifurcated and known by
each individual and part. Another aspect is when the task is to be completed, that is scheduling
the activities of each task in the supply chain management. The deadlines and the lead times are
managed by Pensonic under this stage. Moreover, the expectation of the performance by each,
which included the operating specification, and lastly the results that are predetermined and
decided to achieve out of each activity of supply chain are measured through the customer
satisfaction rating and sales quotas (Oke & Prajogo, 2016).
The major issues regarding these aspects include the vertical channel conflict. In case the above-
described task is not conducted the major problem occurs with the vertical channel in the supply
chain, the reason being that the responsibilities and roles of each party or individual are not clear
and precise in their heads. This could also lead to repetitive work, which eventually increases the
cost of the company. Moreover, while synchronizing the day to day base activity is also to be
fixed and planed, which are part of operating synchronization such as order entering, schedule
confirmation, shipment tracking, information status communication, payment collection,
invoicing of goods, return processing, and disputes resolution. Pensonic conduct the operating
synchronization integration through PSI planning, that is the production, sales, and inventory.
This system includes the scheduling based on information of product flow while adopting the
system (Scott, et al., 2018).
3.1 The major goal for the supply chain synchronization includes
Quick distribution – through the effective synchronization, and reaching out the sales and
inventory data automatically to all the partners in supply chain management would speed up the
process of supply from manufacturers to the final customers through the distribution network.
Quantity accuracy – with the help of synchronization, the quantity that is required to the
significant customers and in the warehouse can be identified and reach to the respective
individual on time. This would eventually helpful for the company to create more customer
database and satisfy the customers through such effective services. Moreover, brand loyalty and
goodwill will be improved through this.

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Real-time visibility – through effective synchronization, the company can check for the inventory
availability at a different location on a real-time basis. Moreover, the whole supply chain can be
viewed and monitored easily with the same.
Up gradation of the system – through synchronization, the company is able to update its system
where the problem is occurring of use of technology is not placed relevantly. Due to the increase
in technological advancement, the cloud-based services are available in the system for more
effective work in the supply changing management, which could be helpful in reducing the cost
and save time (gravitysupplychain, 2018).
3.2 Benefits from the synchronization to the Pensonic:
 Improved service levels
 Higher order fulfillment
 Increased operating efficiency
 Reduction of risk
 Increased competitive advantage (Scott, et al., 2018)
4. Supply chain risk management
Supply chain management is not just focussing over the acquiring services and goods at the
minimum cost or the best price for them. There is various risk involved and disruptions involve
in the process of supply chain management, therefore the mitigations steps are to be involved
while managing risk in supply chain management (Heckman, et al., 2015).
Pensonic is delivering the goods in the various national, therefore the global supply is involved in
the SCM of Pensonic. Therefore, the risk involved in the process increased to a large extent,
which needs to be identified well before the occurrence, otherwise, the loss can be large in nature,
and then the risk is to be mitigated effectively. The risk involved can be external or internal to the
supply chain.
4.1 The external risk while managing the risk in the supply chain management of Pensonic
includes:
 Supply risk – this risk is involved with the availability of product through the supply
chain, either by the vendor or by the manufacturer to the selling point or shopping center

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in the international location of the brand. In case of Pensonic, the risk of not timely
import, or delay of exporting to other nations is involved in the business.
 Demand risk – the demand risk involved is related to the likelihood of the customer
related to the goods of the brand or service available to the customer. The risk of a
decrease in customer demand is one of the major issues to this. In case of Pensonic, the
risk of increase in demand for Pensonic competitor can decrease its demand.
 Business risk – this risk involves the management stability in the market and financial
stability of the suppliers. This is the major risk which could be responsible for the loss of
the organization in respect to the financial aspect. For example, in case of Pensonic, the
risk of market stability in which Pensonic is existing.
 Environment risk – this risk is the change in the environment of the risk that is involved
outside the chain, which cannot be controlled but through contingency planning and
alternative strategy this can be transferred or avoided. For example, risk of uncertain
calamities like loss due to earthquake or tsunami.
 Physical risk – this involves the supplier physical facilities condition. In case of Pensonic,
the risk of damage to the importers property or goods (Hugos, 2018)
4.2 The internal risk within the supply chain of Pensonic includes
 Business risk – this risk within the supply chain of the company is a change in
organizational structure, management team, business process, Reporting structure or key
personnel. For instance, in case of Pensonic, risk of disruption or issue in global
management could be a problem for the company
 Manufacturing risk – this risk is involved in the production team that is the manufacturing
of the goods are hampered due to disruption in internal processes and operations. For
example, in case of Pensonic, the failure of the machine and equipment, which will own
the production level is risk to the company.
 The risk in Planning and control – the inefficient planning can be the major risk for the
organization while continuing the business. This could disrupt the whole supply chain of
the organization, as the planning is based for all the activities to conduct in the
organization. For instance, in case of Pensonic, the risk of wrong decision regarding to the
new product development, could result into loss to the company

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 The risk in Mitigation and contingency – this is the risk involved while planning the
contingency, that is in case of failure or not appropriate to fit one strategy, there is the
need for the contingency plan, in case it is not created or is not appropriate, the risk of
failure of the project can occur. For example, in case of pensonic, the management
unability to create a well establish contingency plan to target global market could be a
huge risk to the comapny (Hult & Wowak, 2016)
4.3 Steps involved in supply chain risk management are:
1. Profiling the base of the supplier
This stage is involved with the identification of the raw material that is the material
Pensonic is importing to be used in manufacturing, identification of the strategic
analysis, and understanding of the strategic organization supplier
2. Assessing the vulnerability of the supply chain
Pensonic’s risk managers has to understand and identify the risk that is involved at
each stage of the supply chain, and risk associated with each supply chain partner
3. Evaluation of implications – the major implication of the risk has to be evaluated to
prioritize the risk according to their effect on the business overall and the supply chain
by risk managers of Pensonic.
4. Identification of contingency and mitigating actions
Next step after evaluating the risk assessed and prioritize according to their result or
adverse effect on the business of Pensonic, the migration strategies are created. For
instance, manufacturing disruption is to be handled on the priority basis, as Pensonic
is majorly based on the quality of the electronic products, which has to be maintained
to meet the standards in the international market
5. Implementation of action and measures – the last stage is to implement the planned
action activities and mitigating strategy by risk managers and other global managers
of Pensonic in order to mitigate the risk actually in the supply chain management.
Moreover, for controlling and monitoring the results has to be measured, which can be
done through the sales figures and lead time improvement (husdal, 2018).

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5. Analysis of supply chain management of Pensonic
After studying the supply chain management, in my opinion, the supply chain management of
Pensonic can be analyzed through its various factors which resulted in favorable or positive result
out of its supply chain management. Some of the factors that I feel were expressing the strong
supply chain of Pensonic are
 International market expansion – in my opinion, it is the supply chain management of the
company due to which the company is able to reach out to the customers worldwide. The
company has a strong distribution network, which makes every supply chain material
available in the host country such as the warehouses, logistics etc.
 Innovation –the synchronized supply chain, and better-managed supply chain of Pensonic
has resulted in more innovation throughout the organization. Moreover, the product
innovation and process innovation had become part of the company. The new headquarter
with research and development team was successfully implemented due to better supply
chain management of the company.
 Optimization of opportunity – due to more synchronized supply chain management of the
organization, the company was able to deliver more creativity and lifestyle inspired goods
and services to the customers. Moreover, because of supply chain management the
company had created a strong image global market targeted segments were penetrated,
which will eventually increase the customer base and increase in the sale of goods of the
company
 Ability to adopt the multi-brand platform for Pensonic – the company because of its
distribution network strength worldwide is able to become a multi-brand for various
market segments and product categories. The group was having sole distribution rights in
the home country that is Malaysia from renowned the brand internationally as GE
appliances in the United States, Princess in Holland and many more.
 Timely delivery – this is another factor which is the indicator of the successful supply
chain management of Pensonic. The company was able to deliver the goods
internationally on time in order to reach out to the customers on time, and that eventually
makes the customer highly satisfied with the service provided (logisticsbureau, 2018).

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 Decrease in cost – another advantage of the supply chain management to the Pensonic
was a decrease in the additional cost as the company has a strong network for the
manufacturing of its goods internationally as well. This shows good supply chain
management of the company (Ayers, 2017)
5.1 Recommendation to the company
Some of the major issues for Pensonic are related to the demand of the product in the
market, rapid change in environment, high competition in the market, and supply
shortfall. These issues or risk can be transferred or mitigated through following
recommendation to the company:
 Demand shaping – the supply chain can be helpful in increasing the demand for the
product. This is recommended to the company to have a strategy that will work upon real-
time insights into the demand. In my opinion, at times the customer perception is changed
when the availability of the goods is increased. Let’s say that in case a customer sees the
product at every available location and place that he or she visits. He would believe in the
brand as it keeps in mind and would like to purchase and try the brand. This is shaping the
demand in the marketplace. This will help Pensonic to mitigate the demand risk identified
in previous section (Zhang, et al., 2018)
 Agile and adaptive supply chain – the company is recommended to develop a supply
chain that is agile and adaptive, this is to be done in order to mold the operation and
integrity of the supply chain management as per the situation or change in the market.
Since the environment in which the company is working is dynamic in nature, it is
beneficial for the company to be ready and adapt the changes that are coming in the
market. As it is known that the technology is changing at a high pace in today’s world, it
is recommended to the company to keep the technology in the supply chain updated in
order to attain and gain advantage through the opportunity arising in the market. This will
help Pensonic to mitigate the supply risk identified in previous section
 Optimize product management, and product design for manufacturing, supply, and
sustainability to increase the profitability of the company through innovation - this is
recommended to the company as the innovation for being successful need to be at the
right place, cost and time while manufacturing. The product design should be optimized

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for manufacturing, supply, and operation within the supply chain. Moreover, the company
must manage the technologies and suppliers in order to gain product and competitive
advantage. This will help Pensonic to mitigate the business risk identified in previous
section
 Supply chain operations of the company must consider sustainability – in today’s world,
the triple bottom line is important to consider that is a planet, people and profit. The
leaders of Pensonic must work upon the supply chain strategy and its capability to embed
the sustainability to its operation and core strategic component (Munson, 2013). This will
help Pensonic to mitigate the supply risk identified in previous section
 Ensure predictable and reliable supply – it is recommended to the company to have more
of predictable supply according to the demand of the product, so as to avoid supply
shortfalls, or wrong time or wrong place availability of goods, which will eventually
increase the cost to the company (Bowers, et al., 2017). This will help Pensonic to
mitigate the supply risk identified in previous section

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6. Conclusion
To conclude the report, it can be said that the supply chain is an important task for an
organization, and it has to be managed in an effective way in order to sustain in the market and
reduce the extra cost involved in the supply chain. The supply chain is the process from the raw
material, to process into the finished goods, and eventually reaching to the final consumers. For
this, Pensonic organizational case will be considered, it is an electronic home appliance, based on
Malaysia.
The supply chain of Pensonic, specifically the distribution network of the company is so strong,
that it is considered as a competitive advantage for the company. Moreover, it was observed that
the synchronization in the supply chain with all the business operations are important, so as to
take advantage and work appropriately for profit gaining and avoid repetition of work. Some of
the risk identified in the supply chain management of Pensonic are supply, business, environment
risk as the external risk involved, and manufacturing, planning, and mitigation risk as the internal
risk of supply chain management.

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