Netflix has revolutionized the way we watch movies and TV shows. By embracing innovation and employing new technologies, it has made the process of picking and watching on-demand movies easy and inexpensive.
Innovative companies can follow Netflix’s model and transform their supply chain operations using some of the same technologies. How? A lot of the technology used by Netflix is similar to the technology that is needed in supply chain management today.
By using real-time content, big data analytics, machine learning and a single system of engagement, supply chain leaders can manage risk, improve efficiency, eliminate blind spots by achieving true in-transit visibility of their supply chain.
Here are four components that Netflix successfully employed that can be a model for transforming your supply chain:
1. Streaming and real-time content
Netflix allows its subscribers to stream its content anywhere, anytime. With streaming, customers can watch videos wherever they are with no limits on the amount of content they can access.
Streaming can be used in the supply chain as well. Logistics managers can manage shipments in real-time, pinpointing their exact location and collecting all of the data. Companies can track shipments using IoT including GPS, sensors, telematics, AIS, weather, traffic, and mobile phones. Collecting real-time information allows companies to not only view and track their shipments end-to-end at any time across their supply chain network but also to optimize their supply chain operations. How do they do this?
2. Big data analytics
Netflix takes the data that it collects from its users to understand patterns and using machine learning algorithms, predicts what shows and movies people will want to watch. This feature saves customers’ effort searching and generates more revenue.
Companies can apply the same concept to logistics. Supply chain managers can combine IoT and big data with machine learning algorithms to provide predictive and prescriptive analytics. But instead of movie preferences, patterns can be analyzed based on the efficiency of transportation lanes, cost, carrier performance, risk, and other relevant factors. Applications predict and recommend solutions to prevent supply chain disruptions. These insights provide end-to-end visibility across the supply chain network.
3. Single system of engagement
Netflix’s entire database is right at their customers’ fingertips who can easily switch between movies and TV shows. The interface for comparing options and looking at movie titles is simple and easy to use within a single system of engagement.
By the same token, logistics teams should be able to easily locate all information about every shipment so that decisions can be made quickly. There should be a single system of engagement that displays every route in the supply chain network so that companies can see the status of all active shipments at-a-glance and quickly identify those at risk of missing their scheduled arrival time. By tracking shipments in real-time, the system accurately predicts the arrival time of inbound, intracompany, and customer shipments.
4. Innovative technology
Before Netflix, streaming video was not popular or affordable. Netflix completely disrupted the DVD rental market and put Blockbuster out of business.
Supply chain leaders have started to transition from using barcode scanning, milestone tracking, TMS, and other legacy technologies to capturing real-time information and achieving global in-transit visibility.
The implementation of IoT, big data, machine learning, and predictive and prescriptive analytics is revolutionizing supply chain management. These new technologies are improving estimated arrival time accuracy, increasing cross docking efficiency, and reducing transportation costs.
This post has been updated; it was originally published in July 2016.