Are You Macro-Optimizing Your Supply Chain?

By Doug Surrett, BluJay Solutions Inc.

Do you remember the Blockbuster video store chain? The company dominated the video rental market in the 90s, employing 60,000 people in 9,000 stores in the U.S. When consumer buying habits began to change, Blockbuster ignored the obvious warning signs. When new competitors, such as Netflix, began offering more attractive alternatives, Blockbuster scoffed at their business models and doubled down on the retail store strategy. By 2010, the franchise was facing bankruptcy.

Blockbuster is just one of many examples of how a business failed to respond to the changing world around it and the business was reduced to irrelevancy as a result. The equilibrium between supply and demand is constantly changing, and when companies don’t respond, they run the risk of becoming the next Blockbuster. What does this mean for the supply chain industry? The supply chain models of yesterday no longer meet the needs of customers and new competitors are cropping up, eager to snatch market share from complacent “has-beens”.

Survival isn’t about just responding to change — you must be willing to embrace a new supply chain model…one that relies on cooperation and collaboration versus siloed, internal operations. You need to stop thinking micro, and start thinking macro.