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I have been reviewing a lot of start up supply chain oriented business models in recent months that require major shifts in industry behavior to be successful. I don't mean business models like Amazon, which, for example, cut out the retailers and sell directly to consumers. One can easily see the potential for Amazon's value creation by focusing on getting the consumer hooked on a new and easy way to buy most any product. The "industry changing" business models I have been seeing, on the other hand, require major shifts in the ways of doing business across an entire supply chain--suppliers, manufacturers, distributors, retailers and consumer all have to modify their behavior for the new entity to make money. It's just not going to happen...or at least not in a year or two, which the business models predict.
There are certainly a bunch of hard, somewhat intractable supply chain problems out there, such as product tracking across supply chain partners, supply chain security to reduce theft, integration of improved real time product demand data to improve supply chain efficiencies, to name a very few. And I wish they were as easy to solve as my diagram to the right portrays a decision process.
Here's a suggestion for supply chain start ups: try and solve one part of the tough problem for a key player in the supply chain rather than devise a revolutionary process requiring numerous supply chain partners to agree on standards, technology compatibility, who will pay for it, how will the revenue be shared, etc. etc.
The Wal-Mart/RFID story, detailed many times in the popular press, is a great example that even the biggest retailer in the world cannot easily change supply chain behavior. Critics can argue that RFID is still going to be a big success, but GPSS and/or wiFi platforms may supersede it. The point is that we do not know if everyone in all supply chains will march to the same drummer in the future. Highly unlikely.