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Reinventing a Businss

Netflix reinvented the video rental business using supply chain technology. It is the largest online DVD rental service, offering flat-rate rentals to customers by mail and over-the-internet. Define a way to revamp or reinvent a business using supply chain technologies.

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A successful way to reinvent or revamp a business is to eliminate an unnecessary step within the supply chain altogether by leveraging technology. Occasionally, a new technology must be developed for such a task, but oftentimes, a technology currently in use in a different industry can be implemented in a new industry in a similar manner. In order for a step in the supply chain to be deemed 'unnecessary', customers down the chain must vote with their dollars that, for x dollars in savings, they are willing to live without the convenience or service offered by that step in the chain. We must remember, of course, that costs are always added at each level in a supply chain. Sometimes these costs are warranted and acceptable to the end user (who ultimately pays all of the accumulated costs from the chain), and sometimes they are not. As with Netflix, millions of customers were willing to wait a few days for their rental to arrive in the mail or use infrastructure they pay for (internet service) to rent movies instead of having the instant gratification of getting a movie on disc right now from the store down the street using infrastructure (store overhead) paid for by others.

Consider the old fashioned grocery industry. Although there have been many ...

Solution Summary

The solution defines a way to revamp or reinvent a business using supply chain technologies.

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