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NETFLIX Supply Chain Management

Netflix uses supply chain management to track inventory and information as it moves through its business processes. This allows Netflix to reduce inventory levels and quickly deliver DVDs. Netflix also uses a web-based supply chain management system that allows all participants to share information in real-time. This has helped Netflix transition to a virtual supply chain and streaming model.

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Ruma Bhowmik
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5K views17 pages

NETFLIX Supply Chain Management

Netflix uses supply chain management to track inventory and information as it moves through its business processes. This allows Netflix to reduce inventory levels and quickly deliver DVDs. Netflix also uses a web-based supply chain management system that allows all participants to share information in real-time. This has helped Netflix transition to a virtual supply chain and streaming model.

Uploaded by

Ruma Bhowmik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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NETFLIX

SUPPLY CHAIN
MANAGEMENT

NFN Jotei, Toyamim Rahman,


Ruma Bhowmik
What is Supply Chain Management?
● It involves managing the flow of materials and

information from suppliers and buyers of raw

materials all the way to the final customer.

● This reduces the overall cost and increase

responsiveness to customers.

● Consists of physical flows and information

flows.
Who used it in history first?
● Supply Chain Management has a long history
● Frederick Taylor wrote a book in 1911 that focused his research on
improving manual loading processes
● Scientists demonstrated the value of analytics in the study of military
logistics problems during World War II
● These two ideas became the framework to address supply chain and logistic
issues and was referred to as “Supply Chain Engineering”
What company currently uses it?
● A supply chain includes:
○ raw materials
○ manufacturer
○ wholesaler
○ distributor and retailer
○ SCM system organizes the tasks for each.

● A SCM system organizes the tasks involved in the supply chain process.
● The objectives of a SCM system are to increase customer value and to
develop a reliable advantage over the competition.
Company Profile
● Netflix is the world’s leading internet entertainment
service
● Over 117 million members in over 190 countries
● They offer entertainment service such as TV shows and
movies
○ original series, documentaries and feature films.
● Members can watch as much as they want, anytime,
anywhere all without commercials or commitments.
How did it start? Reasons?
● Netflix always used SCM systems to run their business, however not always the same
software as they do today.
● They developed their own SCM software to serve the growing number of customers
and continue to grow as a company.
● Netflix uses SCM systems to track its inventory and information as it moves through its
business processes.
● By using SCM systems, Netflix can reduce the amount of inventory that Netflix keeps at
its warehouses and deliver its DVDs quickly.
● Netflix constantly tries to improve their SCM systems in order to keep their customers
happy, reduce costs, and increase efficiency.
Why and how did they use it?
● Web-Based SCM System
○ Advance Internet technology enables businesses to communicate with their consumers or
users.

● The Web-Based SCM System consists of commercially available software


packages that provide an integrated system to purchase.
● The Internet-based system allows all the participants in the supply chain to
obtain the information they need to improve their products.
Streaming and Real-Time Content
● Allows their subscribers to stream content anywhere, anytime
● With streaming, customers can watch videos wherever they are with no limits
on the amount of content they can access
● Through supply chain management, logistic managers can manage shipments
in real time
○ Their exact location
○ Collect data

● They collect real time info which allows Netflix to view their shipment at any
time and optimize their supply chain net
Big Data Analytics
● Takes the data that it collects from its
users to understand patterns and predict
what people want to watch
● Netflix can apply logistics along with
supply chain to combine big data with a
machine learning algorithm
● Instead of movie preferences, patterns
based on efficiency is analyzed
● Applications predict and recommend
solutions to prevent disruptions
Single System of Engagement

● The interface is built so that people can easily switch from movies to TV

shows

● Logistic company can locate all the info about every shipment so that

decisions can be made quickly

● This displays every route in the supply chain network


Innovative Technology
● Before Netflix, streaming videos was not popular or affordable

● With its breakthrough, Netflix put Blockbuster out of business

● Supply chain leaders have started to transit to better technology

● Implementation of loT (internet of things), big data, machine learning and

predictive analytics is revolutionizing logistics management

● This improves performance, efficiency, and costs


Supply Chain Strategy before 2011
● Used information technology and logistics to replace brick-and-mortar stores
such as blockbuster.
● Multiple distribution sites around the United States - more efficient to inspect
and quickly ship out DVD’s.
● One day delivery system and emailed customers a receipt as soon as a DVD
was shipped out or returned.
○ Flaws: If copies of a DVD were not available at one location, it was shipped from a further
location.
○ Shortage of DVD’s led to a longer shipping process and often damaged DVDs.
Supply Chain Strategy after 2011

● 2007- Implemented a more virtual storefront.

● But in 2011 moved to a virtual supply chain.

● No longer has a vast number of distribution centers.

● Flaws : Instead of relying on delivery services, Netflix now has to rely

on cable companies and ISPs.


Citations
● https://www.savi.com/supply-chain-visibility-netflix-model/
● http://www.chegg.com/homework-help/introduction-to-operations-and-supp
ly-chain-management-plus-myomlab-with-peason-etext-access-card-package
-4th-edition-chapter-2-solutions-9780134111070
● https://www.impigertech.com/blog/supply-chain-management-lessons-from-n
etflix/
● http://cerasis.com/2015/01/23/history-of-supply-chain-management/

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