What is a digital supply chain?
It is not radically different from the traditional supply chain that we are more than aware of. While there is no physical product that is sent across warehouses and stores, digital entertainment still has to cope with issues related to order management, inventory control, manufacturing and distribution. The major difference here is that a digital supply chain relies on “virtual inventory” – music, books, movies and games that don’t exist in a physical form that requires packaging and transportation. But this doe snot mean that there is an “unlimited inventory.” Let us see why.
Bandwidth
Digital supply chains do not need warehouses but there are major constraint here. For one, it is quite expensive to keep digital files online, so some are relegated to off- or near-line storage. Accessing that is not easy at all times. A high demand product can choke your bandwidth in minutes. This is one of the major concerns in a digital supply chain. Any supply chain involved, takes utmost care in preventing this from happening.
Standardization
There is no standardization in the digital world. Every DVD title has its own Universal Product Code (UPC) and there is no equivalent that exists for movies transmitted over the internet, on airplanes, in hotels, or via cable systems. Each streaming medium has a different format.
Quality
It is difficult to resolve quality issues across formats. At one end there is Blu Ray and at the other, there is very poor content. With the emergence of Blu Ray, people do not want something sub par
Scope for improvement
Today, once an ‘order’ is completed on a digital supply chain, the digital content flows into retailers systems automatically and out to customers in a short and predictable amount of time. A lot of emphasis is generally placed on quality of content. Netflix, for example has a definite scale of quality standards for its vast digital library. Netflix prefers content from content owners who have a history of quick, error free content.
Another major area that offers scope for improvement is B2B order and catalog management. There are several tools that help with this. Generally, it works on getting feedback from customers.
The Bottom-line
Most supply chains are not void of messy loops and are not well suited to help companies in our industry to fully embrace the rapidly growing channel of internet streaming. But the increasing consumer demand for online streaming clearly provides the incentive to invest in modernizing the existing supply chain with digital content. And most internet streaming companies are working towards better content and more efficient supply chains.
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