Sony Company deals with the manufacture of video, audio, information technology, and communications products. Its music and computer entertainment make it one of the most all-embracing companies in the world. It was founded in 1946, and it manages about 1,041 consolidated companies (Morita & Shimomura, 1986).
Sonyâs mission statement is to become a company that will inspire and too satisfies the curiosity of its clients. The company has an infinite passion for technology and an unyielding pursuit of innovation. That is what drives them to deliver revolutionary new ways of entertainment in ways that they only can. Whatever they do is so that they can move their clients emotionally (Sony, 2010).
Sonyâs main goal is to be the number one electrician out of all the competitors so as to achieve profit. Sonyâs core competencies are in marketing, a well-known and established the brand. The products and services it produces are of high quality, and this is made so by the research and development department that is very high tech (Lyons, 2006). With the production of high-tech products, the company has developed its brand. Sony has a well-known brand internationally and has been able to monopolize its brand identity by having repeat customers.
Its R and D has maintained its strength in the market. Sony has been a revolutionary firm in inventing products like the Walkman (Morita & Shimomura, 1986), the blue-ray discs, improving the PlayStation and now the 4k televisions. The company heavily invests in this department so that only the unique products can be branded Sony.
Samsung was incorporated in Korea in 1969 and has now become the third-largest company in the region. It was incepted as a flagship group of the Samsung Corporation and the Samsung group. It is through diversity and focuses on exporting its products, that the company grew. In 1970, the company decided to venture into the television market and started out with black and white television sets.
With this beginning, they realized that they could tap the global market. With the help of its employees, the company researched and studied the opportunities and challenges of the extended market. With helpful feedback from customers as well, the company decided to change its brand. It wanted to change the perception consumers had of their brand and thus invested in a new brand image.
In 1988, the world Olympics was held in Korea and Samsung decided to sponsor the event so that it could be associated with the wireless technology and also a global sports brand. With the help of further promotion and physical advertisement, the company became a global brand. In this way, the company was able to change its conception. The global strategy of the company involves several main regions. Today, the company has over 50 sales distribution points in over 50 countries. It produces as many products as one can think of. Since they understand that different regions have diversity meaning that there are different cultures and needs, it makes the designs centered on this consideration by having centers in London, Shanghai, Seoul, Japan, San Francisco, Los Angeles and Milan (Senker, 2015).
Operations are the spine of any organization regardless of its mission- NGO, marketing or whether it is manufacturing. Logistics in recent years has gone under tremendous change with the introduction of different systems such as warehouse systems, GIS, GPS, transport management systems and also supply chain management (Blecker, Kirtsten, Flamig, 2008).
Operations management is a management process to produce, manufacture, distribute and provide service. In a nutshell, this wing deals with multidisciplinary activities such as product development, logistics, quality management, information systems, and human resource management. The whole supply chain is covered by logistics and business operations. This department will make major decisions from where the raw materials will be acquired, how they will be produced and what resources will be used to produce them and finally to how they will be consumed. Operation managers must ensure that the site location is appropriate, and the process and layout decisions are effective in producing the products.
In the past before the advancement of technology, manufacturing companies used linear programming, decision theories, and game theories in operations management. With the introduction of computers, many more things became possible- algorithms were made, bringing solutions to more problems. Some of these analytical methodologies are still being used in operations management. These are - queuing theory, gaming theory, inventory theory, simulation, PERT (Project evaluation and review technique, optimization theory, and even linear programming.
Today, technology has become the water that runs in the veins of organizations in the 21st century. Therefore, e-business plays an important part in the information and management team. ICT systems are often employed and have greatly impacted on operation management and supply chains in the organizations. In essence, the main objective of logistics management is to ensure that the products produced by the organization get to their specified clients in their destinations at the right time. To attain organizational objectives, the company must attain the logistics and management mission that is to ensure that distribution is done in the right quality, right quantity at the right place at the right time (Button and Hensher, 2001). This path used is what is referred to as the supply chain.
A supply chain consists of the manufacturers, suppliers, wholesalers, retailers and finally the consumers in the market. Thanks to globalization, a supply chain will span over a thousand miles all over the globe. Therefore, one single supply chain will involve numerous suppliers and just as many consumers. A substantial change from one part of the chain can have an impact, on the whole, chain. Price shocks or a hitch in the transportation modes can greatly affect the whole chain. This can be a threat to the company. On the other hand, an increase in demand, or reduction of transportation costs, or an increase in the number of suppliers will affect the supply chain but will be an opportunity for the company.
The supply chain depends highly on three major components, - transporting, warehousing and packaging. Efficient warehousing and transportation are the main contributors to the success of the supply chain. There have been advancements in transport, packaging and warehousing systems that have served to satisfy the customer better. There is no issue now of a consumer being inaccessible (Srinivas, 2007). Online technology has made it easy to track products online even in transit. This cuts operation costs since the manual placing of orders are not necessary (Rezapour and Kardar, 2011). Online transportation has greatly reduced operating costs. It has also increased organizational differentiation, product specialization, and increased efficiency.
Integrating logistics and e-business is the new global trend (Voortman (2004). Organizations and their consumers make use of the internet as well as e-commerce making business very efficient (USAID, 2010). In warehousing, there are warehouse management systems that allow for stockings, pickings, replenishment and order management (Croucher and Baker, 2010). Using ICT some organizations make use of radiofrequency terminals and barcoding technology to increase efficiency. For instance, time wasted in looking for missing products is eliminated. In addition to eliminating errors, accuracy is increased, there is real-time inventory, one can fill multiple orders, and the customer is satisfied.
Packagings just like warehousing and transporting have incorporated ICT systems. The fundamental functions of packaging include protecting, preserving and containing products so that they are fit for logistic, marketing and environmental aspects (Saghir, 2004). The most used system is the electronic packaging system (EPS). The system is quite effective in maximizing efficiency and reducing costs. The packaging is very important as it forms a perception of the company's brand in the consumerâs mind.
Operation management and logistics are an important facet of any organization. The whole department must contain the right mix of employees for efficiency to be maintained. Operation managers must be competent in this field to plan adequately for labor and to have a detailed capacity planning in case subcontracting is needed, or additional shifts are required. The employees must be adequately trained to minimize errors. The operations manager must ensure that the customer service locations of the organizations have been adequately equipped. In organizations that have an effective system of building on customer feedback, the operations management team must be able to revise quickly the services provided from the input given by the customers or by the performance of their competitors.
Process maps of the companies process flow
The following represents the process analysis of Samsung and Sony showing the process flows from production to distribution.
The supply chain for both Samsung and Sony are similar in that the chain starts from where they source their raw materials from which are then integrated into their company for manufacturing. The end product is then sent to distributors at the regional levels for disbursement to customers.
Operations management and logistics comparison between Samsung and Sony
The buyer bargaining power from both companies is quite high. They both have multiple customers, and they are producing in a market where there is a new "better" gadget by the day. There are several electronic firms producing similar products as Sony, and therefore, buyers have a variety to choose from. In the digital music era, consumers do not buy music often as they can access it through friends, file-sharing or even illegal downloading or even just stream free music online hence album sales go down reducing its sales.
The supply bargaining power of Sony is low. Sony has maintained an effective and smooth relationship with its suppliers for a long time. In both companies, production is done in a pull system where the next stage proceeds only when required.
Samsung manufactures its products in different parts of the world since producing from one center may not fulfill the requirements of the customers in other regions. Accordingly, the company takes care of its procurement processes, this way it manufactures the products at a cheaper rate that boils down benefits to the company as well as the customers. The marketing of the company's products inadvertently is customized according to the different regions. shown. image2.png
In its logistics, the company has developed a global supply chain. The global supply chain was introduced to the company so that efficiency could be increased in giving customers quality products. Very good practice in the global supply chain in Samsung is the quality to price ratio where the company tries to ensure that the quality of the end product purchased by the consumer is higher than the cost paid to acquire the product.
However, the global value chain process isnât free from demerits, and the company feels that the full implementation of the theory will add on to the cost factor. Changing the whole process will still increase costs to the company since changes will necessitate the removal and adding of another process- a move that might be beneficial in the long run but quite costly in the short run.
Samsung also used 3PL which means a third-party logistics provider where it outsources this service from another company. This reduces the costs incurred by the company and thus increases the benefit to the company.
Quite differently from Samsung, Sony takes up SCSS, which is one logistic operator that serves worldwide as the HQ of logistics operations. Centrally it provides a one-stop solution for its operations from procurement to distribution. The company has integrated electronic data interchange and transactions that are internet-based while having the internal applications on one host of networks for the companyâs global operations.
Sony has a multi-country consolidation approach, and most of its transport features are out bond. Business processes are integrated internally and externally to ensure that the operations maintain flexibility in case of changes in market needs. In its supply chain, it uses the radio frequency identification system (RFID) to deploy from factory to shelf. This way the logistics management can track pallets that are serialized across the many organizations in the supply chain. The benefits of this system are numerous in that it encourages efficiencies in labor, retrieves better quality of data and there is smooth tracking of the distribution process.
In their warehousing systems, both use barcoding for easier retrieval and error elimination in tracing products. With the barcoding, the company can get real-time delivery status efficiently. Sony has been very efficient in its packaging systems. It has been able to reach a careful balance between cost, efficiency and environmental effect. An instance of this good packaging is in the Sony Walkman, which is waterproof but comes in a water bottle so the consumer can reuse the water bottle instead of discarding it.
Both Sony and Samsung have been in the market for a long time, and that can be attributed to the effective decisions made on both sides. One can think that the activities in logistics are minor, but the decisions made there can have a chain effect of events that can cripple the company or make it prosper. The companies make good examples of organizations that utilize sound logistic strategies in their success.
Proper operation management and logistic decisions improve the organization's product both at the production level as well as the supply (Farahani Rezapou & Kedar: 2011,). To maximize the productivity of the logistics process, both companies ensure that the attributes of facility location, product planning, customer service, packaging, storage, and demand forecasting are taken into a note. Consequently, all these attributes are related such that the success of the whole logistics process is dependent on the proper coordination of each activity while the profits are reaped all at the same time. In essence, operations and management and logistics bring to one the dimensions of space, time, and place concerning an organizationâs objectives and coordination techniques.
In cases mostly in manufacturing, the operations in the company go past the design engineering part to organizing a quality feedback chain that helps the organization in the prediction of production and delivery performance. When the department of operations management is running smoothly in an organization, the other departments will be able to continue operations without hitches. However, improper management of business operations and logistics will make the other departments suffer. For instance, the human resource department will depend on smooth operations in the business operations department to be able to make clear job descriptions and find it easier to recruit and train new staff in the department. The finance department likewise will depend on a smooth-running business operations and logistics department. The finance department must find ways in which to raise capital either through debt financing or equity financing. Well, running business operations will clearly pinpoint where there is high productivity, where trimming of costs will be required so that the inventory does not register as too much or too little.