Press Release

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July 26, 2000

A New Engineering, Manufacturing and Customer Services System for the Broadband Network Era: Establishment of a Final Assembly Platform Company for Japan in April 2001

(Tokyo, Japan)

On April 1 2001, Sony will integrate 13 domestic manufacturing facilities for the final assembly of electronic products into a new Engineering, Manufacturing and Customer Services (EMCS) Platform Company, tentatively named Sony EMCS AV/IT. This is the first step in realizing the EMCS concept that was positioned as an integral feature of the corporate reform process for the broadband network era outlined on March 30, 2000.

The EMCS concept entails a fundamental reform of the existing production system that is differentiated along product categories and Network Company lines, and a move to a strengthened system which meets the needs of a new era where the business environment is rapidly changing.

The new EMCS company will be separated from the direct supervision of the Network Companies and will be responsible for the domestic final assembly of all electronics products. The new company will apply IT to all its processes and will be responsible for the engineering and manufacturing cycle including: mass production design and prototyping, materials procurement, production planning, manufacturing technology and mass production. Inventory control, logistics and customer service functions will also be included with the aim of creating a speedy, flexible and high quality manufacturing system based on direct contact with the customer and the market.

The following benefits will flow from the establishment of the new company:

  1. The application of IT in enhancing supply chain management and introducing e-procurement will result in more efficient engineering and manufacturing processes, shortening of production lead times and optimizing inventory control.

  2. The new system will coordinate engineering and manufacturing operations, transcending the limitations of individual manufacturing facilities. The resulting fast and flexible manufacturing activities will mesh with a rapidly changing market environment where product cycles are becoming shorter and shorter.

  3. Any duplication of manufacturing operations within the Sony group will be eliminated leading to productivity gains and enhanced competitiveness.

  4. Technology transfers between facilities will be promoted, such as high-density mounting processes, quality control etc. and total group manufacturing technology will be strengthened.

  5. The customer service system will be strengthened through the expansion of direct contacts with the customer and customer needs will be fed back immediately to production facilities.

In preparation for the start of the new company, Sony will be consolidating and integrating the engineering and manufacturing functions currently deployed among the 13 manufacturing facilities and between Network Companies. At the same time, the redeployment of personnel resources will be reviewed. Through this process, the business management role of the Network Companies will be positioned (including business planning, technology R&D, product planning, basic design etc.) and the demarcation of responsibilities with the new company clearly defined.

Semiconductor and component manufacturing operations as well as overseas manufacturing facilities are distinctive in terms of products, processes and geographical characteristics. Sony will continue to review how they can best be reorganized under the overall EMCS concept.

Outline of New Company (Proposed)

Name:Sony EMCS AV/IT (tentative)
Establishment Date:April 1, 2001
Representative:Fujio Sugano
HQShinagawa ku, Tokyo
Sales Revenue:approx. 1.5 trillion yen
No. of Employees:approx. 12,000

The following 13 domestic assembly production plants are scheduled for inclusion in the new company:

Sony Senmaya Corp.Iwate Prefecture
Sony Nakaniida Corp.Miyagi Prefecture
Sony Kitakanto Corp.Ibaraki Prefecture
Sony Bonson Corp.Saitama Prefecture
Sony Kisarazu Corp.Chiba Prefecture
Sony Digital Products Inc.Nagano Prefecture
Sony Broadcast Products Corp.Shizuoka Prefecture
Sony Kohda Corp.Aichi Prefecture
Sony Ichinomiya Corp.Aichi Prefecture
Sony Densi Corp.Aichi Prefecture
Sony Inazawa Corp.Aichi Prefecture
Sony Mizunami Corp.Gifu Prefecture
Sony Minokamo Corp.Gifu Prefecture