Supply Chain Matters has featured many previous commentaries related to challenges occurring at Sony and its associated supply chain structure. In May, we issued praise to the Sony executive team. Forty of Sony’s top executives, including its CEO, agreed to forgo end of year bonuses amounting to 30-50 percent of their compensation because the company failed to keep an all important promise to return the group’s consumer electronics division to profitability for the fiscal year that ended March 30.

This week, Sony officially reported that after three consecutive years, its consumer electronics division finally recorded a profit.  This milestone was a key objective of the company’s new CEO, Kazuo Hirai, which prompted key executives to forgo bonuses last quarter in order to meet this objective.  Other cost reductions involving the consumer electronics supply chain, including major shifts toward outsourcing of manufacturing, also contributed to the milestone. The company itself recorded a six-fold increase in operating profit while its net profit climbed to $35.6 million.  Sales increased 13 percent in the quarter. A weaker Japanese yen also contributed to these positive results.

thumps_upSupply Chain Matters therefore extends its Thumbs-up recognition to Sony, including its extended supply chain team, for accomplishing this important milestone. 

Much work remains however, it areas of product, process and organizational innovation.  For now, Sony can celebrate a very important milestone on its ongoing transformation journey.

Bob Ferrari