| CLICK AND MORTAR TO PURE PLAY|
HOW APPLE AND DISNEY ARE MAKING THE MOST OF THEIR DIGITAL SUPPLY CHAINS
A Management Information Systems Project Assignment: Select two organizations in the same industry and study their SCM. Prepare a report on how the companies are managing their customers and suppliers. Make some recommendations as to how they can improve their efficiency.
Submitted to: Sir Waqas Saeed Submitted by: Muhammad Babar Suleman Hassan Irshad Atif Murtaza Arslan Sadiq Arslan Zafar Ran Amjid Mehmood Ehtisham-ur-Rasool
1.1 AMR SUPPLY CHAIN TOP 25: STRONG SHOWINGS BY APPLE AND WALT DISNEY
Apple stays on top with an unbeatable combination of killer financials and stellar opinion scores. AMR Research
The AMR Research institute recently published its list of the companies boasting the best Supply Chain Management procedures (see Appendix 01). Two of the top 25 players represented a radical departure from the traditional Supply Chains. Apple tops the list with a supply chain which is as much a revolution for traditional supply chains as it is a negation of almost everything the supply chains
have previously been characterized by. For one, Apple’s supply chain for its online store iTunes is completely digital in nature. It is the apex and materialization of what Management Information Systems and Information Technology Disney combines demand-driven advancements had hinted at. Another company in the top 25, the entertainment giant Walt Disney combines a digital supply chain with a streamlined traditional one with spectacular results.
replenishment with new collaborative models for pure content distribution. AMR Research
As lines between companies’ offers of physical and digital products become blurred, Apple and Disney are the forerunners of what will be the future of supply chains: The Digital Supply Chain. Additionally, both the companies’ supply chain models are based on the “demand driven excellence” model which is the modern solution to meeting the needs of the global market. 1.2 GROWING IMPORTANCE OF CONTENT AND INTELLECTUAL PROPERTY The reason why the supply chains of Apple and Disney were able to rank so high is because both the companies were able to recognize the immense significance of digital content and Intellectual Property in the modern era. The music industry has by far experienced the most significant effects (positive AND negative) of digitization of music (in the form of mp3s and other digital formats). However where piracy quickly became the biggest challenge for the industry, sales of digital music have exploded over the past couple of years, thanks to Apple’s ubiquitous online store iTunes. iTunes started with 99 cents per song- now it’s a thriving market leader that encompasses music, movies, TV shows, apps, eBooks, podcasts and so much more. Disney benefits from “the best of both worlds” (as the title character of its popular Hannah Montana TV show would say) by combining a digital supply chain with its traditional practices such as that of supplying stores such as Blockbuster and Netflix with DVDs of its movies and TV shows.
02. THE DIGITAL SUPPLY CHAIN
2.1 WHAT IS THE DIGITAL SUPPLY CHAIN? At the core of Apple and Disney’s fantastic success is the digital supply chain. The question arises as to what the digital supply chain is and how it differs from traditional supply chains. Before getting into the specifics, it is important to define the digital supply chain. According to Wikipedia: “Digital supply chain is a new media term that encompasses the process of the delivery of digital media, be it music or video, by electronic means from the point of origin (content provider) to destination (consumer). Similar to how a physical medium must go through a supply chain process in order to mature into a consumable product, digital media must pass through various stages in processing to get to a point where the consumer can enjoy the music or video on a...
References: Wikipedia Digital Supply Chain http://en.wikipedia.org/wiki/Digital_supply_chain AMR Research www.amrresearch.com PC World “How Apple’s Supply Chain fared during the 3G Rollout” http://www.pcworld.com/businesscenter/article/148429/how_apples_supply_chain_fared_during_t he_3g_rollout.html Cara’s Com425 Blog http://csmithcom425.wordpress.com/2009/10/30/week-6-supply-chain-management/ “Understanding the Digital Supply Chain” Presented at Media-Tech Conference, 23rd April 2009 by Sven Deutschman, CEO, Arvato Digital Services EMEA http://www.media-tech.net/fileadmin/templates/europe09/pdf/presentations/MEDIATECH_2009_Sven_Deutschmann.pdf Business Week “Hollywood Is Worried as DVD Sales Slow” http://www.businessweek.com/magazine/content/09_09/b4121056770437.htm MESA Disney developing ‘Keychest’ for Digital Content Access http://mesalliance.org/blog/2009/10/21/disney-developing-‘keychest’-for-digital-content-access/ Information Week “Q&A with Disney 's Patrizio: Digital Content Is the Future” http://www.informationweek.com/news/globalcio/interviews/showArticle.jhtml?articleID=160403913
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