Sony Corp. plans to cut ties with more than half of its parts and materials suppliers by the end of 2010, aiming to save at least 500 billion yen in procurement costs in the current fiscal year, according to a Nikkei report Wednesday.
Can someone explain, what do they mean by "suppliers"?
The companies that provide sony with the material to make their products.
Companies that supply all the components that make up the PS3, like the case, capacitors, fans, screws, etc... I think the purpose of this article is to say that Sony is working hard to take cost out of the machine and make it cheaper. All companies do that after they launch a product.
socomnick, please elaborate. also, lol.
Dont encourage him please. Just ignore him. Maybe he will go away.
Sorry Panthers :( Just sometimes... I like to see how a child's mind works. Maybe he can provide insight on how to run a multi-billion dollar company... *falls over in a fit of laughter*
Dk y every doesn't put him on ignore list
HAHAHA....comment of the week. bubbles up for that one.
don't be too harsh on socomnick. Afterall, it's not unusual for mentally challenged kids to make up stuff and to live in a world of their own where their little fantasies are actually a reality. In his wicked little world, trolling is actually an olympic sport and he's pretty damn good at it. Last year, he got the silver medal. Edit : SONY might want to bring back some of it's production in-house, in Japan. That way, they could create some jobs, which would no doubt give them a good image for the Japanese people.
Just debubble and ignore if you don't like him. And this has probably got to do with the slim ps3 they are making. Does this mean they are gonna stop making regular ones then?
this pretty much means that future sony products will be made by the lowest bidder. In the end they're sacrificing quality for quantity. This doesn't necessarily have anything to do with the ps3 except that newer models may be using lower quality parts. depending on the part it probably won't make a difference or may lead to a rise in reported YLODS, or have no affect at all.
Well this doesn't even need to apply to the PS3, could be to Sony TV or other electronics.... This doesn't mean anything.
This is dire news for PS3 fans, it looks like Sony is going to axe their PS3 division sooner rather than later.
@ Idle you see how you make sense. SONY DOES NOT JUST MAKE PS3s! People just relax if you buy a Samsung or Sony they are very simalar parts wise and some of their parts are identical. Just like a Kodak and Canon camera they are the same parts different skus and features and don't think that Samsung will make better parts for Sony than there own because they just might if the price is right. ITS BUSINESS.
The PS3 will only get canceled in your wet dreams Socomnick. The PS3 is getting canceled and games like Uncharted 2, M.A.G., Rachet, Heavy Rain, and more are coming this year.... Riiight. I don't know why little fankids on N4G have this assumption that the only thing Sony makes is PS3's. Sony is in the hardware business and makes tons of electronic products (HDTV's, Blu-ray Players, Digital Camera's, Camcorders, Headphones, etc... and the list goes on.) As far as I know, this may have nothing to do with the PS3 at all.
The first thing I suspected is that they'll reduce the output of the camcorders, digital cameras, PCs, and possibly TVs (although their TV sales were up from the fiscal reports). PS3s??...::shrugs shoulders:: Didn't Sony close a TV factory in Pennsylvania last December, as well as planning closing an LCD TV plant in Mexico??
May I ask why the moderators haven't done anything to socomnick? He provides nothing valuable to the Gamerzone and insists on flamebait comments just to piss people off. Like what was said above, Sony's probably working hard to drop the cost of the PS3 or it probably pertains to the rest of their electronics.
It is seriously too easy to jump the gun. Why does everyone think a company wide decision affects only Sony's PS3? Or MS's 360. These are major companies with diverse interests.
Suppliers make products for all the products Sony make, like HDTV's, Blu-Ray players, CD and MP3 players, etc. Not just Ps3! I would imagine alot of other companies are doing this, or are considering doing this as well. Everyone is trying to save money.
So Socomnick and Icewake have both agreed that the PS3 is doomed Is it time fellas to make another weak ass forum signature because of this article? or maybe time to ms paint (photoshop to complicated for children) a new avatar that will depict your undying affection for each other?
My theory about the ps3 canceled soon is pretty plausible read the story, they are planning for a long term reduction in the manufacturing of products. It would make sense that they would cut back or eliminate their faltering ps3 division. :/ Its only a theory but its a theory that holds some substance thats why everyone's all bothered by my comment.
Scaling back on some parts and supplies for ANY number of products, And totally canceling your PS3 line are 2 TOTALLY different things, dude.
"Its only a theory but its a theory that holds some substance thats why everyone's all bothered by my comment." Everyone's bothered because your conclusion is baseless. Take your own advice, read the article, and tell me where it mentions the PS3 or any specific division of Sony whatsoever.
I am glad to see that most of you are seeing what this really means. To use buzzwords Sony is simply "rationalizing their supply chain". Almost all major companies have done forms of this and some have completely overhauled their supply chain to drive out wasted costs. This could include things such as strategic outsourcing, e-procurement and strategic sourcing, which is probably what they are talking about here (I didn't read the article). The thought goes like this - why have 5 approved vendors for a capacitor when you only really need two. By reducing this you save resources from not having to manage multiple supplier relationships and you can develop much closer relationships with key suppliers which can further reduce procurement costs. The automotive industry is a prime example of this at work. Another example is office supplies. How many of you have a single supplier for your office supplies. Cheaper administration and unit prices result and quality doesn't take a hit. In fact, empirical evidence shows it can significantly increase due to the closer relationships. So in closing....nothing to see here....in fact, Sony should have done this years ago...better late than never.
PS3 is doomed, ms are going to buy sony out, paint all the PS3s white and whack a fan heater in them and add them to their sales figures. PS3 is here to stay, Sony plan the long term future of all their consoles and have they got it wrong yet? Also as some of the brighter people in here have said Sony has a huge catalouge of products, for all you know it could be they are just buying the screws for every product from diferent places.
It's a cost cutting measure that will save jobs at Sony. If they don't do this, more workers will probably get laid off. Then when the recession is over, they will come out of it as a much stronger company, with higher profit margins because they aren't outsourcing as much components. It also means that a PS3 price cut (as well as other Sony hardware) will be even more possible, because they will be spending a lot less money on components. Some of the retards on N4G don't even know basic business tactics lol. The "PS3 is doomed" is the most ridiculous thing I've ever heard, Sony will be supporting the PS3 for a very long time unlike MS with the Xbox 1, they already have a FANTASTIC lineup going well into late 2010, and there's still so much more games they could make. You can't say the same about MS (Halo and Gears, oh yeah and Halo, and Gears) or Nintendo (Mario and Mario, oh yeah also Mario and some more Mario, Zelda). In other news I just got a Wii, it is better than I expected, but still PS3 and 360 are way better imo.
This is interesting. Kaz pretty much turns the company into a software power house and now suppliers are being turned away. I understand what they are doing and I have seen the new slim PS3 which looks quite sexy I must say and 120gigs would be sweet also. This could be because of consolidation of parts. Lots of people think the PS3 came to market way too quickly. It's possible the slim is the PS3 that they wanted to make the whole time. I don't want to get into the IT's Doomed talk but could this really be a 10 year console for sony? I know the gamers believe this but I don't think the developer community believes this. Just one look at what is coming and you have to wonder how the hell is SONY going to deal with better consoles coming out around the price of the Wii? I know it sounds impossible to most gamers but you can buy 8 gigs of ram for your PC for around $100 now. I haven't heard any thing about a cell 2 happening either, almost no R&D break thurs with SONY at all. Seriously don't take what I said wrong but you guys have to buy more PS3 games because that is how they will make their money. It's nie to see the price of components go down though. They don't talk about which parts are effected either. I don't like the sound of this though. Yet it's more understandable in this day and time. If this happened during a booned then I would be worried more. I think KAZ will get sony back on track though. He is more than likely going to turn SONY into a console company than any one I believe. I will say it would suck to see them marginalized though. I'm not a big fan of MS.
This is being done in preparation for the Slim, it's already being manufactured but not on a full scale level at this point. Soon this is what will happen.
Hopefully they cut down on the Sony Ericsson phones.I never liked them
People should realize that this applies to Sony as a whole, and not just the gaming division. This is simply a way to cut costs over all their departments.
You're one of the few.
Bless you child. Finally, someone with a functional brain. Bubbles for you.
Wow, someone else that sees this as a smart business move!
PS3 isn't getting cancelled, it's getting slimmer! Needs less parts ;p
I think there should be a PS3 super-fat. Imagine that sh!t. So big you could put your TV on it, so warm it could heat a bungalow. Bigger is better baby! YEAH! / I kid, I kid. As stated already, this has to do with Sony as a whole. Most likely production of their TVs are of major concern as they are hemorrhaging money on them quite a bit right now.
dude you are truly a tard
Sign o' the times. This economy stinks.
How you gonna produce or pump out more units with less suppliers? Well besides cutting cost in some fashion, like closing down a game studio. I wonder if the shipment numbers will be cut?
http://www.marketwatch.com/... "Sony will also unify its procurement under a new department created last month, the Nikkei reported. That department will include Sony Computer Entertainment Inc., which had enjoyed relative independence in purchasing supplies, according to the report. The profitability of Sony products such as flat-screen televisions is largely determined by the cost of supplies and components such as semiconductors, according to the report. As a result of the move, Sony expects procurement costs to fall to around 2 trillion yen in the fiscal year ending in March 2010, down from around 2.5 trillion yen a year currently. "
to drive a better bargain. For instance, say SONY is getting certain TV parts from 3 different suppliers...you consolidate to 1 by putting a tender our for bid...end result LESS SUPPLIERS and COST SAVINGS (as well as better quality control too). Less Suppliers =/= Less product made necessarily (though the economic downturn will likely demand less product made anyway)
just means 1 they fond them cheaper 2. new model coming soon 3 they did the same thing with the ps2 fat one so yeah after a wile it will
deshon09, you do know that the PS3 is only one out of the hundreds of products sony make and sell? The likelyhood of one of those suppliers being a PS3 one is pretty slim.
now if the PS3 gets the price cut, who knows if they can keep up? This must of been the Nintendo Strategy with the Wii.(Stress your suppliers and create the elusions of Demand). maybe Sony's shipment numbers will shrink.
I'm still waiting for some info to prove this has anything to do with Sony consoles. Do you have some inside tip kewlkat? It's widely known that Sony is losing money on it's TVs and Laptops, thus why it's sensible to conclude they are focusing on cutting costs in those specific areas. You decide to bring out of the blue: - A price cut Which could be good for Sony or very bad, I'll assume the people running the company have a better idea of how to manage their business. - IF there was a price cut, Sony thusly, not being able to keep up with demand If there is a demand Sony does have the option to get more suppliers, this is basic business. - Nintendo creating false supply strains Is actually a very plausible argument. They managed to keep the price at the initial retail point and have made the Wii that "hard to get", cool toy that everybody wants, but isn't sure why. (I'll call it the iPod effect)
Cutting ties with suppliers isn't an uncommon thing. Essentially, it is an attempt to consolidate your supply chain network, as n4gn4gn4g stated, usually for the purpose of increasing the relationship with the remaining suppliers. I.e. the remaining few suppliers now have access to contracts to cover additional materials required by production (that was previously covered by other suppliers) - thus it is in their interest to bid for the available contracts. Such an approach to supply chain management was similar to Nissan in the late 90's, when they had more suppliers than General Motors (who were a much larger company!). The idea was that the supply chain partners were chosen on a cost basis - necessary for a company that was in financial consolidation. There would be fewer suppliers, but those that were chosen was promised better long-term relationships. Both companies win, but it is not a tactic that is hugely popular (for various reasons). For the record, after Nissan tried this supplier-cutting approach, they turned a huge deficit into a profit within a year. Time will tell if it works for Sony, though.
With sales collapsing and consumer interest all but gone, the PS3 is finally on its last legs as a console and will be relegated to the bargain bins by the end of this year. Never in history has a console failed so badly as the PS3, and Sony is finally paying for its decade of destruction and sins on the gaming industry. A good consumer can always smell the stench of death around the console, and the PS3's smell is strong. Millions of consumers have abandoned the PlayStation brand because they realize the Xbox 360 is a far superior product at a significantly lower pricepoint. This is why consumers love the Xbox 360 and have rewarded it with record sales, attach rates and consumer satisfaction ratings are at an all time high. The PS3 has become the symbol for Sony's broken dreams and arrogance, and they have finally been punished for it. Sony fooled the marketplace twice with the PS1 and the PS2, but consumers are well informed and smart, and they realized that they would not be fooled a third time. Sony with their incredible arrogance believe that the PS3 would outsell the Xbox 360, a machine which consistently outperforms its rival in every single Eurogamer comparison. They lied to consumers and told them it was a supercomputer and that it would bring 1080p graphics at 120fps in 4D. All these promises were nothing but lies, and the PS3 is now a machine whose inferior architecture and design is loathed by the industry and consumers alike as unwieldy, backwards and inferior to the Xbox 360. In comparison to the PS3 which has 3rd party developers abandoning it like rats off a sinking ship, the Xbox 360 has been an incredible and unrivalled success, with every single developer on the planet swearing allegiance to the Xbox 360 and praising the Xbox 360's superior architecture, award winning features and AAA titles. The Xbox 360 is the future of home entertainment, and has driven innovation and quality to new heights that only Sony could dream of. With the Xbox 360 defeating the PS3 in sales worldwide, with significant growth in all territories, the inferior PS3 has only seen massive declines in its sales. The Xbox 360 has always been about the games, and we have been rewarded with the greatest lineup in home entertainment history on the Xbox 360. The greatest, latest and highest quality titles look and play best on the Xbox 360, and this is a fact that has been proven in over 12 Eurogamer comparisons. The Xbox 360 is the future, and is the true home entertainment ecosystem for the new millenium. It's time to pack up shop Sony, you're no longer wanted, in fact you never were.
Thank you Zhuk.N4G would be lost without you
Steven move. we feel like little men under Zhuk.
omg you are so full of sh!t but you put amazing effort into your posts, kinda pathetic but ya know whatever its not like sonys selling shop lol all there doing is HALFING there suppliers, also the playstation brand isnt even mentioned in the link edit: something that sticks out to me "In comparison to the PS3 which has 3rd party developers abandoning it like rats off a sinking ship, the Xbox 360 has been an incredible and unrivalled success" have you ever thought its because sony has like 15 first parth developers and microsoft has like 4? either way i dont care about sales and crud, all i know for certains is that the ps3 has much more exclusives coming this year and probably next year
@Necro You're right.I'll just step aside seeing as how General Zhuk said what needed to be said.
Why all the hostility and doom-and-gloom opinions for the PS3 and Sony? I mean, it isn't like Microsoft isn't experiencing such operational setbacks as what Sony is trying to mitigate here. MS is hurting as well. But then again, Sensational Fanboy's like Zhuk have nothing else to wake up for in the morning. All this bullsh*t Fud from Zhuk is just his way of showing that he has something to live for. "The Xbox 360 has always been about the games, and we have been rewarded with the greatest lineup in home entertainment history on the Xbox 360." The greatest lineup in history...made up of two single games: Halo 3 and Gears of War??? Good God, someone call a doctor. This f*cking idiot is seriously in need of some psychological help! Oh and Zhuk, why do I get the feeling that if Eurogamer didn't support your particular side and instead always heralded the PS3 in graphics comparisons that you would be cursing their reputation just as strongly as you are praising them now? Well, maybe its because your a f'n dipsh*t fanboy! Sony was never wanted? Well I don't know that to be true, but they sure as hell resurrected the gaming industry and made it into the large profit place that it is now! If the original Playstation hadn't of expanding the gaming industry's audience like it did, Microsoft wouldn't have seen the potential in joining into the business. Bottom Line: The Playstation made the gaming market into what it is today, but little panty stains like you, Zhuk, would have their balls cut off by a rusty razor before they admit it. Hey I just speak the truth, and if all the little d*ck-headed fanboys don't want to believe it, well than sh*t, they can just eat mine!
Take what Zhuk says with a grain of salt and a hearty laugh. He does it just to get under your skin.
Ah, some peoples' sarcasm meters must be out for repair. Agree and +bubbles for laughs.
Zhuk, make a thread and invite dark sniper in it. I want you two to battle to the death!!!! Or..at least..until one of you cry..
How is the Xbox 360 the future when it lacks next gen features?
Zhuk is doing this for jokes. At least I think he does. No need to be all hostile, I actually like reading his/darksnipers posts.
I thought you would write something wise with all that but it turns out stupidity isnt all that restricted!!what a load of crap that was!
it feels like you REALLY mean it.... LoL
PS3 exclusives speak for themselves once again. You have alot of spare time on your hands to type such a essay. Not enough games out for you to play? Waiting for the next halo? waiting for Alan wait, I mean wake. Wondering why almost 6 months into the year and their is still no must have exclusives on 360? cause if you are just wondering and waiting and typing fanboyish essays, I have a solution for you. Suck it up, bite your toungue, buy a ps3 and quit being a fanbot!
that you actually didn't write this. Plagiarism at its finest. It's ok to actually think that, but try writing it on your own next time buddy!
Which makes you a loser.
Makes sense.. Sony makes expensive "Top of the range" products in nearly all markets they are in. In the economic downturn, people will be very unlikely to go for these "Top of the range" products during this time - so why would sony continue making the stuff that isn't going to sell, it would just be them wasting money in production costs. Once we're out of this mess we're in with the economy and sales pick up again, they'll reconnect those links with suppliers. Supply and demand.
Exactly, If Wal-Mart can do it, Sony can too.
Cutting back on suppliers might just mean Sony are going to go easy on the drugs.
i read all what Zhuk says just because he has Gillian Seed's pic on him <_< ... but.. Gillian would never say that... that means.. o! hell!! u Snatched Gillian!! <_< omg..... omg...
The more that Sony cuts ties with suppliers. The more jobs that is potentially lost as a result since some companies rely solely on their trade business. I'd rather Sony not do this because that means people in China, US, Malaysia are all lined up to get laid off as a result. *sigh* I really do hope Sony doesn't plan to make this a long-term business plan when the economy picks up again.
Hope so. Sad for the old suppliers though. But business is business. And this may confirm the slim rumor?
So they'll just cut down on production and manufacturing?
Think about it like this, I work in a business that makes cosmetics this happens all the time, this is just on a much larger scale 2 companies make a product, and your paying 50 million to each totaling 100 million but then approach one and say, can you increase output and quality and well pay you 75million and eliminate the other saving 25 mil? Deal, money saved quanity up, or money saved and quanity the same eithier way it saves money
lol people trying to teach a troll somthing is like trying to tell a wall to speak. you should just ignore them for being a complete tard