Professional Documents
Culture Documents
We will focus on how the change in Logistics management gave the company new
ways to improve customer service, control costs and make the most of opportunities
technologies the company enhances its customer services, profitability and hence it
competitiveness.
We are going to use a company called “Sharp Roxy HK LTd, which is the subsidiary
manufacturers in Japan. It employs about 57,000 staffs and owns over 30 subsidiaries
sales services of full range Sharp products to customers in Hong Kong. Its Service
Centre was established on 1987 to provide after-sales repair and maintenance services
“Product / Service differentiation”. Since the Brand image of Sharp Products is not
Page 1
very differentiate from other Japanese brands like SANYO, HITACHI in the Hong
Kong Market, the Service differentiation plays a critical role in enhancing its
competitiveness.
We would like to study the company based on different activities in the Logistics
management and etc., and study how these activities carry different significance to
We would like to analyze the sales order processing by splitting it into Inventory
In the past, if the customer inquire about the availability of prompt stock, the sales
staffs should have to telephone to the warehouse and ask the warehouse staff to check
the availability. If there is no stock in the warehouse, the sales staff should then ask
the shipping department to check the status of next shipment with Head office by the
means of fax or e-mail. The result may come one or two days later.
There’s plenty of truth in the old saw “time is money.” The dealer may then choose to
Page 2
buy other brands’ product instead if he cannot get the stock information immediately.
For instance, if the market demand for MD player increased suddenly, some dealers
like Broadway may inquires whether Sharp and Sony has some inventory. If Sony
HK can provide prompt reply to the Fortress, Fortress may have already decided to
purchase from Sony while the sales staff of Sharp Roxy is still checking the stock
In order to enhance the logistics procedure and thus the competitiveness, Sharp Roxy
HK started using the SAP management system about 6 years ago (as well as the whole
Sharp group). With this system, the Sales staffs are able to check the real time
inventory status by themselves directly. If there is no stock, the sales can get the real
time information about the next shipment delivered to Hong Kong through the SAP
system and thus inform to the customer. The response time to customer’s inquiry can
Also, if the customer needs the goods urgently but the company does not has any
stock, the sales staffs can ask their Japan Head Office to check whether their
subsidiaries in other countries have some stocks or not. As the Japan staff is
authorized to see the real time stock status of all the subsidiaries with the SAP
management system, they can ask the subsidiary which has inventory to sell some
Page 3
stocks to Hong Kong branch. For example, if they found that Singapore subsidiary
has some stocks, the head office will ask them to sell some to Sharp Roxy HK in
The customer who placed Purchase Order would like to know the status of their
goods. Through the SAP management system linked with Head office, the sales staffs
can check the real time status of the goods and report to the customer anytime.
As the Sharp factories input all the shipment details into the SAP systems once the
shipment was effected, the shipping department of Sharp Roxy HK is able to get the
shipment details (such as ETD and ETA date, Vessel name as well as B/L number)
through the system directly. As a result, the custom clearance procedure as well as the
Also, as the Sales staff can get the real time information about the status of shipment,
the sales staffs is able to issue Sales Order and Delivery Order and arrange delivery to
customers within the same minute of the goods arrived Sharp Roxy HK’s warehouse.
Page 4
TRANSPORTATION
Sharp Roxy HK used to own their own delivery team to delivery the goods from their
the number of delivery staffs cannot be increased and decreased immediately to meet
We would like to take the air-conditioner as an example. Although the demand of air-
delivered and be installed in winter, the company should keep sufficient number of
technicians and delivery staffs in order to meet the high demand of coming summer.
Most of staffs of the air-conditioner term may really got nothing to do in winter.
Also, as the number of staffs is fixed, the customers may have to wait for a long time
if there is some sudden increase in market demand. E.g. the weather became very hot
In order to solve this problem, the company decided to outsource the delivery and
By outsourcing the delivery and installation services, Sharp Roxy HK saved a lot of
labour cost. Moreover, as that logistics company has enough manpower to meet huge
Page 5
demand, they are able to deliver the goods to customers on time even during the high
The operation of Service Centre and subcentres mainly cover services of repair order
Consumable Sales and Ordering , Counter sales service of Spare Parts , Technical
In the past, the companies employed over 30 hotline staffs to handle calls from
general hotlines in 3 centers located in Shatin, Kwai Hing and Admiralty. All of
customers with different needs had to be answered by those 30 staffs first. Then, the
hotline staff will transfer their lines to the responsible department according to their
needs. For instance, if the customer who want to ask a technician to go to his home to
repair his Television, the hotline officer will transfer their line to Repair department to
Page 6
make a booking. Since all the incoming calls should be answered one by one by the
hotline officers, the customers had to wait for a long time although there were 30
hotline staffs. Also, even though the hotline officer had answered his call successfully
and his line had been transferred to the Repair department, the customer still had to
wait again if the line of Repair department is busy. Some customers said that they
waited over 5 minutes, and their lines had been transferred a few times but no one
Lots of customers finally given up to contact with the service centre and telephoned to
Sharp Roxy office and complain to the managers directly, or wrote some complaint
letter to magazine, or ask their friends not to buy Sharp’s product due to the bad
service. It will absolutely affect the company reputation and thus its competitiveness.
The company decided to use call center solution from 2001. With the service hot line
telephone system, all the incoming calls will be transferred to the related department
directly. (Please refer to the structure of the caller system). The number of hotline
officer could be cut to about 5 staffs only while the average waiting time of customer
were shortened. The company had used the saved labour costs to employ some new
Page 7
WAREHOUSE MANAGEMENT
for the company’s profitability. If the warehouse operation do not support company
When the company is fast growth up in past year, but the traditional manual
warehouse operation can not handle the Sales Order fast growth. Also, the stock
record was not reliable and caused wastage and lost of goods sometimes. Let us take
the returned goods as example. In the past, the goods returned from users were sent
back to warehouse, then the warehouse staffs will make a record in their Excel record
file. Some of the returned goods still have value as they can be sold to internal staffs
their shops.
However, as the record is only kept in the warehouse staff’s computer and under least
Now, as mentioned, Sharp Roxy has started using the SAP system as well as for
warehouse management, and now other departments can access the real time
Page 8
inventory data. The supervision thus can be enhanced and the sales department can
Although Sharp Roxy is only playing the role of selling agent and therefore it does
management,
the demand planning and inventory management is still an playing critical roles on the
planning and inventory level, otherwise, they may suffer from losing business chances
due to keeping insufficient stock to meet Market need, or may bear financial burden
On the other hand, Sharp Corporation is playing the role of suppliers for all its
Corporation Japan requests all subsidiaries including Sharp Roxy HK to report their
PSI system is widely used by famous Japanese companies (such as Sony Corporation)
for budget planning and global management. All subsidiaries have to report their
Page 9
forecast of purchasing quantity, sales quantity, and inventory level for the coming few
months.
However, the PSI management system is not for Headquarters’ own merit. It also
helps its subsidiaries such as Sharp Roxy to make its Demand and Inventory planning
much efficiently.
The PSI plan, always made by a meeting called PSI meeting, which is being held once
a month. Sales managers, marketing managers and logistics managers are required
Firstly, sales and marketing managers have to report the sales forecast data such as
reserved orders by major dealers, market trend, competitors’ products. Then they will
decide the sales forecast quantity of the coming 4 months based on the above data.
After that, the logistics managers have to decide the inventory level they want to keep,
and finally decide the quantity purchase from Headquarter in the coming 3 months.
As shown the attached sample of PSI plan, the lead time for MD-1234 is 3 months, so
the sales managers have to report how many orders they expect to receive from the
customers in the coming 4-5 months. After inputting the sales quantity, the logistics
Page 10
managers can decide the inventory to be kept and thus the necessary quantity to order.
This PSI system enable betters planning and decision making in purchasing and
easily. Also, the demand of dealers can be satisfied as scheduled because the
Headquarter can get the PSI forecast and thus arrange material acquisition effectively.
However, this PSI system also has some disadvantages. It is very useful for the
products in slow changing market such as microwave oven, rice cooker, washer as the
demand is very stable. However, for those products in rapid changing market such as
Personal Computer and LCD monitor, this PSI system seems not flexible enough to
meet the sudden and rapid change of market price and demand.
For instance, the market price for LCD panel (the main component for LCD monitor)
was very fluctuates last year. After Sharp Roxy reported the PSI of purchasing a
certain quantity for the coming 3 months, the LCD panel price decreased a lot
committed the purchase quantity at an agreed price, they are not easy to neither
Page 11
Since their purchase cost was too high that, if the company keep the original profit
margin, no one willing to buy their goods since it is much expensive than other
brands’ goods. Finally, they had to reduce the selling price even lower than Purchase
network has put the global economy and culture together. Many useful IT tools as
Multi-media, Internet and WWW are integrated into logistics management, especially
in reducing cost and improving corporation’s services. Sharp Roxy also established
its website in 2000 in order to improve the efficiency in logistic process, customer
operation cost.
For instance, in the past, if the customers lost their user Manuals, they have to give a
call to service center to order a manual, then come to pick it up and pay $30 for a
copy of manual. Also, when a potential customer wants to get the product
information such as product specification, they have to contact with the sales staff and
Page 12
ask them to send the catalogue to them by mail.
Now, the customer can easily obtain the information of the products or services and
even download the desired software/manuals of a particular product from Sharp Roxy
’s website free of charge anytime and anywhere through the internet connection.
Therefore, internet facilitates the two-way communication between the enterprise and
the customers, which shorten the response time to customer’s inquiry and improve the
Also, with the newly employed “Video conference system”, the customers and the
sales staffs are no need to waste time to travel for meeting. Also, it allows some of
the local major dealers such as “Fortress” to have videoconference with Japan
Japan about the local market trend and thus make some request on future product
and customer services, response time to the rapid changes of market. In result,
Page 13
the company is able maintain and enhance its competitiveness in the Market.
Page 14