Milk or Imaginery Arrows: Supply Chains for Digital Media

When most people think of supply chains they link of the movement of physical goods, such as cars, computers, food or clothing. Which is completely accurate, but while supply chains may have grown out of these industries the 21st century requires supply chains to evolve into new areas.

In an earlier post on June 3, I discussed how supply chains can be used to manage employee skills and talent, which is very cutting edge. But what about using a supply chain to manage digital media, such as PDF files, mp3 files, JPEG or TIFF images or the latest movies? Today, many of us participate in very simple digital supply chains when we email photos to our friends and family. But what do you do when you want to send 3,000 photos to 4 million people and make sure that they all pay a fee for the privilege to see the photo for only 30 days?

Similarly to the inventory, logistics and fulfillment processes of a traditional supply chain, digital media is just as complex if not more. For example, in the digital world inventory is limitless. Since digital files can easily be replicated, your inventory is only bound by the size of your harddrive. But this also adds a layer of complexity as content owners need to be concerned with security. I don't think automaker Ford worries too much that its new GT is going to be duplicated in the thousands and sold on the black market, but you can bet that it keeps the movie and music industry up all night. Another major concern for digital supply chains is bandwidth. Just like a 18-wheel truck can get filled, the bandwidth a company uses to disseminate digital files needs to be managed to prevent the system from crashing and halting the data exchange, which could lead to dissatisfied customers.

I recently read about a new trend in video gaming were avid gamers use real money to purchase virtual weapons and clothes for their virtual counterparts. Can you believe it? My mom would have killed me if I used my milk money in grade school to buy a bow and arrow for my Dungeons & Dragons character. But this is reality today and complex supply chain processes will be needed just like they are today in the more traditional industries. The question is how many businesses are ready?