Sony is also one of the few global high tech manufacturers to orchestrate their entire supply chain across business units so well that they can measure perfect order performance. A perfect order by definition is when the customer, whether they are form a B2B or B2C-based industry, receive the right products order, at the right time, with perfect execution of delivery (Blanchard, 2007) (Novack, Thomas, 2004)
Sony's Supply Chain Management Strategies: Best Practices in High Tech Supply Chains The strategic series of systems, processes and programs that enable any company to exceed customer expectations on a consistent basis and be profitable is the performance of their supply chains. The synchronization of supply chains ensures that customers will have a consistent positive experience when purchasing from a company, and this holds true for both Business-to-Business (B2B) and Business-to-Consumer (B2C) companies (Cirtita, Glaser-Segura, 2012)
The reliance on metrics to streamline and optimize supply chain performance is what many analysts have attributed the company's rapid new product introduction process and pace of product design (Percy, 2004). One of the most important metrics the company relies on in their efforts to synchronize supply chains across all subsidiaries is The Perfect Order Index (POI) (Columbus, 2008) (Johnson, 2007)
This supply chain collaboration initiative is unprecedented in the high technology industry, yet has been successfully used for decades in the automotive industry. The Toyota Production System (TPS) is known as the model for the Sony supply chain collaboration and knowledge sharing system (Dyer, Nobeoka, 2000)
While there are metrics and key performance indicators (KPIs) that are specific to each division, Table 1, Sony measures of Supply Chain Performance, show the commonly used ones across all business units. Based on analysis of the following sources: (Blanchard, 2007) (Columbus, 2008) (Hughes, Balasescu, Balasescu, 2008) (Sony Investor Relations, 2012) In addition to these metrics and KPIs, Sony has set an aggressive goal of trimming transaction costs by up to 22% using their supply chain planning and collaboration platforms, including the knowledge sharing system now in place (Sony Investor Relations, 2012)
The reliance on metrics to streamline and optimize supply chain performance is what many analysts have attributed the company's rapid new product introduction process and pace of product design (Percy, 2004). One of the most important metrics the company relies on in their efforts to synchronize supply chains across all subsidiaries is The Perfect Order Index (POI) (Columbus, 2008) (Johnson, 2007)
The synchronization of supply chains ensures that customers will have a consistent positive experience when purchasing from a company, and this holds true for both Business-to-Business (B2B) and Business-to-Consumer (B2C) companies (Cirtita, Glaser-Segura, 2012) . For those companies that compete in industries that have very rapid product lifecycles and supply chains that must support very rapid shifts in product and service strategy, the challenges are multiplied (Li, Lin, 2006)
Sony is also one of the few global high tech manufacturers to orchestrate their entire supply chain across business units so well that they can measure perfect order performance. A perfect order by definition is when the customer, whether they are form a B2B or B2C-based industry, receive the right products order, at the right time, with perfect execution of delivery (Blanchard, 2007) (Novack, Thomas, 2004)
Figure 2: Maturation process of the Toyota Production System as a Knowledge-sharing Platform For Supply Chain Partners Source: (Dyer, Nobeoka, 2000) Sony and The Perfect Order Index The culture within Sony is highly attuned to innovation in addition to quantifying the overall level of supply chain performance as well (Sony Investor Relations, 2012). The reliance on metrics to streamline and optimize supply chain performance is what many analysts have attributed the company's rapid new product introduction process and pace of product design (Percy, 2004)
Sony Corporation is one of the most-recognized brands globally in consumer and industrial electronics. The many supply chain best practices that Sony has developed over decades of intensive effort and study have given them the ability to compete in five core business segments on a global scale (Sony Investor Relations, 2012)
The CCBCC is successfully doing this today through the combination of core components of their CPFR strategy, implemented through a series of enterprise software applications and major shifts in processes and programs internally. The result continues to an acceleration of the company's performance based on the core foundation of the CPFR Model (Barratt, Oliveira, 2001)
Joint business plans ensure the company has the ability to effectively plan for spikes in demand more effectively than traditional, and less flexible means allow for. The collaborative planning phase of the CPFR Model is essential for ensuring a high degree of logistics coordination and collaboration has been achieved (Bonet, 2005)
In conjunction with these accomplishments, the CCBCC has also successfully developed a Demand Driven Supply Network (DDSN) that is capable of responding to unique order requirements in a fraction of the time possible with more traditionally designed systems and workflows. A DDSN is capable of working in conjunction with CPFR systems to further accelerate order accuracy, profitability and on-time, or perfect order performance (Crampton-Thomas, 2006)
The collaborative planning phase of the CPFR Model is essential for ensuring a high degree of logistics coordination and collaboration has been achieved (Bonet, 2005). The collaborative forecasting process including sales forecasting, exception management and resolving expectations, all essential for making a strategic commitment to CPFR function correctly, are also evidence in the CCBCC implementation (Ireland, 2005)
Instead what was needed was a more collaborative planning and forecasting approach to provided for greater demand management workflows, greater precision of the distributed order management, pricing, sourcing and supply chain processes, which are all components of a DDSN framework (Crampton-Thomas, 2006). With the greater level of collaboration, communication and demand management with suppliers and distributors companies can often exponentially increase their performance on the perfect order metric (Novack, Thomas, 2004)
Clusters are beneficial to each of the businesses involved, and play a significant role in how a company is able to create a niche in their competitive advantage strategy. The communication and involvement between linked companies creates a significant growth in competition, productivity, innovation, and coordination improvement, and trust building (DeWitt, Giunipero, & Melton, 2006)
The communication and involvement between linked companies creates a significant growth in competition, productivity, innovation, and coordination improvement, and trust building (DeWitt, Giunipero, & Melton, 2006). Supply chain management (SCM) is the management of intertwined businesses and stakeholders that are involved with a product or service (Harland, 1996)
With the demands a company faces to globally compete, it seems paradox that it should also focus on its economic geography as a form of competitive strategy. However, as cluster theory states, proximity is primary to competition (Porter, 1998)
But just as significant are information flows. Information flows permit the assorted supply chain partners to bring together their long-range plans, and to control the daily flow of goods and material up and down the supply chain (Handfield, 2011)
These functions are more and more being outsourced to other entities that can carry out the activities better or more cost successfully. The effect is to augment the amount of organizations involved in satisfying consumer demand, while dropping management control of daily logistics operations (Mentzer, DeWitt, Keebler, Soonhoong, Nix, Smith, & Zacharia, 2001)