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Sony needs sharper scissors
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"TOKYO (AP) — Sony Corp. said it will halve the number of parts suppliers to slash costs under a turnaround plan that's testing the mettle of Chief Executive Howard Stringer."
While Sony's plan makes sense, they are missing a critical piece of the cost reduction puzzle.
In one of my "day jobs" we present our services and capabilities to large businesses like Sony. More times than not, even though we, and other small and mid size firms can offer tremendous cost savings as well as more services for less expense than behemoth competitors, firms like mine are left out.
Why? Even with the economy in the doldrums, and budgets being slashed, many decision-makers still opt for a much more expensive "household name" when it comes to selecting their suppliers. Based on conducted research on this topic, on average, this choice adds an average of 56% to every project!
Here is an interesting twist to this story. In my own experiences, sadly, this scenario is primarily U.S. centric. In other words, when my team and I pitch our services to potential clients in Asia, Europe, or South America --- prospective customers want to hear about the depth of available services, skills of the team who would work on their project, prior experience in their space, value, and total cost. Generally speaking, the name of the firm is far less important.
While the markets may applaud Sony, Sony needs to look past equipment suppliers and see who they are buying their ancillary services from if they want to turn their ship around.
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