Does that mean all Sony devices will get teh Cell?

All megalithic companies become bureaucratic and inefficient over time. It makes no sense to have multiple suppliers of functionally or materially identical parts, but this is exactly what one would expect to happen over time in a huge company with semi-autonomous business divisions. Tendering a large contract from one supplier will lead to significant savings cf numerous smaller contracts with multiple suppliers. The same number of parts will still need to be produced so the number of factory floor jobs won't go down by too much (they'll still decrease because of economies of scale leading to better productivity). The number of supplier middle and upper management jobs will reduce by a lot, but people at that level has less of a hard time finding (creating) new work than factory floor workers.

The benefits will only be known when this exercise shows whether Sony has gone for the cheapest global supplier, or the one who provides the best mix of quality and price. Sony's long term reputation depends on them going for quality.

I don't think you understand what SONY means by suppliers.

 Here is an example of what SONY is doing

 Currently:
     SONY Electonrics Japan buys x amount of silicon off Company A
     SONY Computer Entertainment buys x amount of silicon off Company B
     SONY Electronics Europe buys x amount of silicon off Company B
     SONY Electronics America buys x amount of silicon off Company C
     SONY Computer Entertainment America buys x amount of silicon off Company D
     SONY Computer Entertainment Europe buys x amount of silicon off Company A
     etc.

     Now Company B might be selling the cheapest silicon -- buy only for companies that buy in huge bulk amounts. Overall SONY buys enough silicon to get it cheap off Company B, however with each division independantly buying silicon indepantly and none of them buying in large enough quanities to get large bulk buy discounts.

  After the change SONY is proberly aiming for:

   SONY Corp. buys x amount of silicon off Comapny A
   SONY Corp. buys x amount of silicon off Company B

 Such a method will save SONY money, make it easier to track where and who is buying silicon and best of all it simplifys the process.

 

This actually sounds like really bad news. Why didn't they cut suppliers, like, a year ago, when things started to look bad for the economy in general?
Either Sony's too monolithic and incompotent to understand 'paying less = good', or they're cutting suppliers past a reasonable level as a last ditch effort.

Of course, I'm a blatant anti-sony fanboy, so who knows.

R&D will be unaffected by this K. Its where a company strives for competitive advantage. First and foremost rule of business - slash everywher else but set your R&D budget in stone.

Don't think that will happen anytime soon I mean why suddenly cut the price with the same amount that they will save by doing this supply thing, that's like going back to square one again, well atleast with the PS3.

I said bad news for the products and the industry, not for stockholders.

and sony doesn't just buy raw materials, they also buy components; those are the ones I targeted. They are often customised to the specific needs of the product. Lowering the number of suppliers and buying in bulk to reduce cost will lower the diversity of components bough, hence the specification of the final product.

for my less job example, that you showed yourself, sony only utilizing A and B instead of ABCD.

I'm not saying you said anything wrong, i'm just trying to make my point clearer ( cause apparently you didn't understand me)

R&D is one of the reasons PS3 is in the red... so they should actually revise how they do it.

Eliminating inefficiencies in components purchases will be good for Sony, but one has to ask: it's such an obvious and common sense move that why Sony didn't it already years ago, when it saw the matter was going out of control, but there wasn't yet the urge? Instead of limiting losses, it would have increased profits then, and Sony would have had more cash for dificult times like this.