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Inventory Management Solutions and Leaders

Netflix vs Amazon Effect on Supply Chains (1/2)

June 6, 2017


There are some companies who have redefined the way business is done. Netflix and Amazon are two prime examples. In fact, both of these companies have disrupted their respective industries in the way products and services are offered. Netflix brings content right to your screen with no wait time. Whereas Amazon lets you shop without even stepping out of your house.

This two-part series will take a look at how the ‘Netflix Effect’ vs ‘Amazon Effect’ has set different expectations on supply chains and what we can learn from them.

Netflix Effect

Netflix is a content streaming platform where thousands of movies are readily available to consumers. Just one click away, its services reach 80 million users in 200 countries. ‘Visbility’ is what the Netflix Effect revolves around. This means that all the content is visible to all customers at any given time. So here’s the top 3 lessons Supply Chains can take away from the Netflix Effect:

Real Time Content

Netflix offers its users real-time access to the content. You can watch a movie during any time of the day at any place. You could download it for offline watch or stream it online. Similarly, supply chains need to adopt the feature of Real-Time. Any transaction happening across any part of your supply chain should be updated in real time so you’re updated. Moreover, real time visibility of knowing when items have been picked, packed, shipped, processed, and received will help you to:

  • Make timely decisions
  • Reduce inventory holding costs
  • Achieve higher visibility

Order management

With so many movies and TV shows from all across the world spanning different categories, Netflix does a good job of organizing them in one place. You can search for genres or particular movies based on your liking and go from there. Supply chains that carry any number of products should make sure to manage their orders in one place. Bringing orders together from all your sales channels in one centralized location makes it easier to track and manage. Main components of order management include:

  • Syncing orders with inventory
  • All the client information
  • Track the flow of goods

Customized Recommendations

One of the perks of Netflix is that it can suggest you more content based on what you have previously watched. The platform recognizes what you like, and can recommend what else might interest you. How does that translate to a Supply Chain? Well, think about all your products and knowing automatically when to order more stock. Your supply chain process should analyze your past consumption and present inventory. Based on those numbers, you should know what you need to order. If you want to offer better customer service and improve delivery time, remember to track your inventory level.

In conclusion, Netflix essentially reflects a digital supply chain that puts visibility at core. There’s a lot more we can take away from the ‘Netflix Effect’. Are you interested to see how the Amazon Effect is different? Stay tuned for Part 2.


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