Sony cutting down on number of parts suppliers
After 14 years of profits, Sony posted its first annual net loss for the fiscal year ended March. As part of its plans to turn things around, the company has announced that it will cut the number of its parts suppliers by half in order to slash costs.
The Associated Press reports that Sony plans to reduce number of its parts makers from about 2,500 now to about 1,200 next year. Additionally, the company will be centralizing its purchasing to better negotiate for cheaper prices. In the past, each Sony division worked out contracts with suppliers individually.
Centralized purchasing will likely affect Sony's games division, which traditionally has been given more leeway to buy parts. Hardware cost reductions have already cut the games division's operating costs by more than half, and if the plan goes well, it should give Sony even more incentive to institute a price cut for its game consoles in order to remain competitive.