Movie distributors face much lower profit margins and a broader
number of resellers in the digital realm. The product itself is more
complicated as well. Fifteen tracks on a music CD account for 15
unique SKUs. The same is true for additional content on DVDs and
Blu-ray disks, such as director’s commentary and promotional mate-
rial. Perhaps for that reason, no single content provider yet dominates
the digital landscape for movies. “It’s much less defined [than the
music industry],” Moran says. “There aren’t any 800-pound gorillas.”
Long-term demand planning is difficult because the popularity
of a given movie is often tied to unexpected events that are beyond
the distributor’s control. “Companies need to be positioned to
respond to that spike in demand immediately,” Moran says. At the
same time, because each Blu-ray disk is equipped with a unique
serial number, distributors possess detailed consumer data that can
drive more targeted marketing efforts.
Managers of digital supply chains need to acquire a whole
new set of skills, on top of the expertise that is needed to move
physical product. The digital world demands deep knowledge of
managed IT services, including data centers, networks and infrastructure. Making matters even more unpredictable is the shift by
many software providers to hosted applications based in the
“cloud.” Says Moran: “The cloud is to the digital supply chain
what just-in-time inventory management is to the physical supply
chain—or it has the potential to be.”
The Monster Cable Supply Chain:
A Look Behind the Scenes
Raul Corella, vice president of worldwide supply chain operations, stresses the importance of collaboration with key suppliers, understanding best practices and maintaining strict
performance metrics—all with an eye toward continuous
improvement.
Monster Cable is a 31-year-old company that makes a wide range of
popular accessories for consumer electronics. It services some
20,000 storefronts through multiple retailers, supplying around
5,000 SKUs. Three years ago, says Corella, the company launched a
major transformation based on the SCOR (Supply Chain Operations
Reference) model of the Supply Chain Council. It set up internal
teams to identify best practices within each step of the process—
Plan, Source, Make, Deliver and Return. That was followed by the
creation of metrics for benchmarking the company’s progress in
each area, with an eye toward ensuring continuous improvement
every year.
Monster Cable was determined to configure its supply chain to
keep pace with market changes. It sought closer ties to retailers
through the deployment of Collaborative Planning, Forecasting and
One initial project was to postpone
retail packaging. That might mean
inserting a DVD into a product in collaboration with a content producer such as
Disney. Now, says Corella, Monster
Cable can finalize a product and its
packaging two or three days before it’s
needed, instead of the weeks that were
required for items manufactured entirely
in China.
Corella says CPFR has been a success
for big-box retailers that already have good processes in place. It’s
been more of a challenge for mid-tier retailers and distributors. “They
see the value,” he says, “but they don’t have enough supply-chain professionals on site.” Monster Cable works to fill that gap, by supplying a
level of expertise that is more common to the biggest retailers.
At Microsoft, It’s All About
Communication
It’s great to have accurate supply-chain data within a given
department. But companies must be able to communicate
and collaborate across discrete business functions, as well as
with outside suppliers. Sanjay Ravi, worldwide managing
director of high-tech & electronics industry at Microsoft,
shows how it can be done.
A company might be doing a good job of making decisions within
discrete functions such as supply-chain planning. What many lack
is the ability to communicate and collaborate among individuals
