Sony (SNE) Looks to Cut Supllier Network Down Again as Speed Comes into Play (AAPL) (QCOM)
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Sony Corporation (NYSE SNE) is looking to cut ties with a vast majority of its suppliers, an effort at speeding up bringing products to market.
According to Japan's Nikkei, Sony currently uses around 1,000 firms as suppliers. Sources have said that number could be as little as 250 when all is said and done.
While Sony may spend around $19 to $20 billion annually on parts procurement, rivals Samsung and Apple (Nasdaq: AAPL) spend double that amount, largely giving the two companies precedence in ordering and fulfillment. By forming strategic partnerships with a smaller amount of suppliers, Sony hopes to build stronger bonds by doubling orders to certain firms.
Sony will select about two or three major global suppliers covering 10 core components for products ranging from digital sensors to display panels. Companies could include Qualcomm (Nasdaq: QCOM) and AU Optronics (NYSE: AUO), among others.
Sony previously cut its supplier count down from 2,500 in 2008 to 1,000 in 2013. That was to focus on cost. This time around, the focus will be on speed.
Shares of Sony are slightly positive late Wednesday.
According to Japan's Nikkei, Sony currently uses around 1,000 firms as suppliers. Sources have said that number could be as little as 250 when all is said and done.
While Sony may spend around $19 to $20 billion annually on parts procurement, rivals Samsung and Apple (Nasdaq: AAPL) spend double that amount, largely giving the two companies precedence in ordering and fulfillment. By forming strategic partnerships with a smaller amount of suppliers, Sony hopes to build stronger bonds by doubling orders to certain firms.
Sony will select about two or three major global suppliers covering 10 core components for products ranging from digital sensors to display panels. Companies could include Qualcomm (Nasdaq: QCOM) and AU Optronics (NYSE: AUO), among others.
Sony previously cut its supplier count down from 2,500 in 2008 to 1,000 in 2013. That was to focus on cost. This time around, the focus will be on speed.
Shares of Sony are slightly positive late Wednesday.
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