Sony Slashing 1300 Suppliers To Save $5.3B This Year

Sony is reportedly slashing ties with 1300 suppliers in a bid to reduce production costs for this fiscal year. The non-official information has been obtained by Nikkei business daily from “unnamed sources”.

This is not a surprising move, but we think that the timetable for change has been accelerated because of the recent loss posted by Sony. What will happen, we think, is that Sony will challenge its designers to use and re-use less parts across its product line. Reducing the number of parts (which range in the tens of thousands now) is a key component of cost-reducing costs.

That goes from economies of scale, to reduced processing work, to negotiation power, to storage and so on… there are implication all over the place. It works for Ikea, so it should work for Sony