Sony Slashing Suppliers Of Parts And Materials

Sony plans to sever ties with more than half of its parts and materials suppliers by the end of 2010, to save at least 500 billion yen ($5.27 billion) in procurement costs in the current fiscal year, the Nikkei business daily reported without citing any sources. The Japanese company’s procurement, which had previously been handled separately by its various divisions and subsidiaries, will be unified under a new department created last month, the paper said.

Sony’s list of suppliers will shrink to about 1,200 from about 2,500, while the volume of parts and materials purchased from each company will increase, driving down unit prices, Nikkei said.

According to the story, the consolidation will include video game subsidiary Sony Computer Entertainment Inc, which had enjoyed considerable freedom in purchasing supplies. Story and picture courtesy of Reuters.