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[Cristoforo Kanoy]

Netflix has focused on digitization of their part of the digital supply chain but they need to expand into content creation and content consumption to capture more value as competitors enter the market.

Interesting essay about a topic that is going to define the digital media creation and distribution industries in the following years. I think that Netflix has done the right thing by moving up the value chain and starting to create its own content. Moreover, Netflix data analytics, but still human-based, approach to content creation is the right one and is giving the company good results.

Even the biggest content creators such as Warner and Disney will find it difficult to reach a certain critical mass based only on their productions. Once they realize how difficult to reach that critical mass is, it will be even more difficult for them to renounce to such an important source of revenues as selling their rights to Netflix, or other content distributors.

One of the portfolio companies of my prior firm built large data centers at the edge of major urban areas so that companies like Netflix can store data closer to the end consumer and significantly reduce data transport costs. While this addresses the short-term concerns for Netflix, can this model be scalable enough to satisfy escalating future demand?

Very interesting topic! I agree content acquisition can be helpful as Netflix moves upstream to expand content library, especially with quality contents that can generate higher margin and commercial values. As the largest online distribution platform, Netflix has established formidable competitive strength which gives them very high bargain power with upstream and downstream players.
However, I do think quality of their internally generated contents or Netflix labeled contents is something Netflix needs to be aware of. UGC is an interesting idea to establish social network and enhance stickiness, but content quality is definitely not guaranteed and direct competition with Youtube may not be a good idea.
In terms of variety of contents, Netflix can also work on it as for their in-house content creation. Taking the leading online media distribution platform in China as examples, they have produced movie, reality show and even sports contents, which may be some interesting areas Netflix can start or continue to develop.

While Netflix was on campus several weeks ago, representatives from their content planning team said that, despite the fact that the media often pits Netflix against traditional content creators, Netflix will never move away from its partnerships with those content creators. Netflix benefits from increased supply for its content library since consumers are won over by the diversity of titles available through Netflix. It is unlikely that Netflix can sustain the same volume within its content library purely from its own, original productions. Netflix relies on its relationships with content producers.

As Dong alluded to above, Netflix does have much to worry about from its downstream supply chain partners. Net neutrality regulates ISPs control over end customers access to various websites. Prior to net neutrality laws, ISPs could slow down a websites speed to a consumer unless the website paid the ISP, effectively holding the websites ransom. For websites like Netflix, ISPs hoped to push back the additional costs related with the infrastructure investments and maintenance required to stream large amounts of data at speeds acceptable to end consumers onto media streaming services. Government regulations, however, prohibited this, but there is ongoing conversation about whether net neutrality regulations will be removed.

On the second question around whether Netflix should even move to content creation in the first place, rather than partnering with dedicated, specialized content creators, my opinion is that given the point you make on the diminishing value of content distribution, the only remaining high-value item in this supply chain is the quality of the content itself, and thus it is of Netflix to enter this space in order to support its competitive position in the longer term given the lack of barriers to entry on the distribution side.

Companies can track shipments using a range of data sources, 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.

Companies can apply the same concept to logistics. Supply chain managers can combine Internet of Things (IoT) and big data with machine learning algorithms to provide predictive and prescriptive analytics.

But instead of movie preferences, supply chain pros can analyze patterns 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.

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. That way, supply chain managers can quickly identify those shipments at risk of missing their scheduled arrival time.

Likewise, 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.

Target's got an inventory problem. The mega-retailer has canceled incoming orders and cut prices for certain goods. Why? Because people aren't buying stuff like television sets, home furniture, and appliances anymore - items that Target overstocked during the pandemic. The demand has fallen way below the levels it was during the pandemic.

With supply chain snags continuing to impact the world economy and experts predicting a slow recovery, companies are focusing on digital transformation to make their supply chains more adaptive to future business disruptions.

While the likes of Samsung and SK Hynix have not commented on the strike so far, the Korea Enterprises Federation - which includes representation from South Korea's semiconductor companies, issued a joint press release asking the truckers to call off the protest.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Companies use vertical integration to gain control over the supply chain of a manufacturing or distribution process. By taking certain steps in-house, the manufacturer can control the timing, process, and aspects of additional stages of development. Owning more of the process may also result in long-term cost savings.

Businesses may focus on efficiency and cost-cutting by opting for a lean, streamlined supply chain with minimal inventory and waste. Other companies may focus on flexibility and responsiveness and implement a more agile and adaptive supply chain that can quickly respond to changes in demand or supply.

Many companies opt for vertical integration as one of the best business strategies to ensure cost savings, increased efficiency, and improved supply chain coordination. In this post, we will define vertical integration, discuss the pros and cons of vertical integration, explore the differences between horizontal and vertical integration, share an example of vertical integration, explain what differentiates vertically integrated companies, show why vertical integration makes sense, and help readers understand the importance of horizontal and vertical agreements.

Vertical integration necessitates complete oversight of suppliers, distributors, or retail spaces for a corporation to have more control over its supply chain. The process starts when a company identifies critical areas of the supply chain that it wants to control, such as a specific raw material, a manufacturing process, or a distribution channel.

Companies then achieve vertical integration by acquiring or merging with other companies that are involved in different stages of the production process. Creating internal divisions to handle various aspects of production and distribution, including goods or services procurement and other procurement processes, also helps companies achieve vertical integration by allowing them to coordinate and control their operations.

The companies also develop new capabilities internally, including purchasing new equipment or hiring a team of experts to manage the unique aspects of the supply chain, and in some cases using specific supply chain management software. This brings new expertise and knowledge to the company and increases the efficiency and coordination of the supply chain.

Backward integration is a vertical integration that runs upstream of the supply chain. Companies expand their business operations back to the earlier stages of the supply chain. They take control of the raw material and intermediate products involved in producing the end product that the company makes.

Backward integration gives a company greater control over its operations and supply chain. It can lower costs by eliminating the need to purchase raw materials or intermediate products from other companies.

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