A World Without Supply Chain?

How will crowdsourcing and digital downloads change supply chain?

No Supply Chain
No Supply Chain. Getty Images

When Netflix created its DVD delivery service in 1997, it revolutionized supply chain by delivering the DVD’s its customers wanted, when its customers wanted them. It also let its customers keep those DVDs as long as they wanted without paying late fees. And let its customers browse their vast library on the new-fangled Internet thingy. Netflix optimized inventory, customer fulfillment, and their bottom line.

Supply chain would never be the same again.

Indeed.

But as Gotham City District Attorney Harvey Dent explained to billionaire Bruce Wayne, “You either die a hero or live long enough to see yourself become the villain.” And in the world of supply chain, Netflix became the villain. Today, it delivers a product anywhere on the planet, instantaneously, without worrying about inventory, warehousing, or shipping costs. Its supply chain is binary. Its inventory is digital.

Netflix isn’t the only example of a supply chain that’s gone invisible. Uber (and rivals like Lyft) are transportation companies without any vehicles. You can visit Airbnb’s website and browse over a million places to stay in 190 countries – and yet Airbnb doesn’t own a single room it can rent out. Consumers are crowdsourcing their vacations and transportation without regard to what “sourcing” means to the supply chain pro.

Back in the day, “sourcing” meant that a supply chain manager (or purchasing manager, etc.) would travel to potential suppliers or to tradeshows.

Sales directors would treat their counterparts in supply chain to elaborate presentations, plant tours, and three-martini lunches. Eventually, those three martinis were replaced by a Diet Coke (with a refill, but only if it’s free). Skype made plant tours less frequent and tradeshows have as many tumbleweeds rolling down their aisles as they do purchasing pros looking for new suppliers.

A purchasing manager can open up an eProcurement event and watch the quotes roll in.  So, as “sourcing” itself has evolved within the world of supply chain – outside that world, the transformation of “sourcing” has been nothing short of Banner-to-Hulk in its scope. 

If you’re a supply chain or sourcing professional and you think that Netflix, Uber, and Airbnb are anomalies and not revolutions – you might want to upgrade your 14.4 modem. Change is the only constant, my friend. In the 17th Century, the Mayflower spent months powering through rough seas to deliver Pilgrims to the New World. By the 1920s, Mayflower became the name of a moving company that capitalized on the new network of roads in the United States. And then, in the 1980s – Mayflower became a DC superhero with the power to control plants. She was mercifully killed off. Do not hang on to a supply chain that your successors will want to kill off

With one click of her Tweet icon, Nikki Minaj can communicate with about 20 million people. How long do you think Paul Revere would have had to ride to let 20 million people know the British were coming?  (Hint: there were about 3 million people living in what would come to be known as the United States at the time.) When Twitter was founded in 2006, you could pay extra to get UPS to deliver a parcel to you as soon as the next day.

If you paid even a little extra, you could get it before 10AM. Today, you can order a toothbrush from Amazon and have it delivered the same day. Keep up.

Yes, someone’s out there right now figuring out how to optimize supply chain once we live in outer space. And, yes, 3-D printers, drones, digital downloads and real-time metrics will continue to change how we think about supply chain. And, YES, supply chain is transforming. Netflix killed its own supply chain and changed the world as we know it. Are you willing to do the same thing to your supply chain?