Blu-ray Supply Chain Challenges

This week I had the opportunity to attend the Media & Entertainment Services Alliance (MESA) annual Entertainment Supply Chain Academy (ESCA)  in Beverly Hills.  As usual most of the discussion was on digital, digital, digital, which seems to be the overwhelming focus of all entertainment supply chain discussions these days.  However, there was one session on traditional physical products such as Blu-ray and DVD, which I found to be particularly insightful.  The session was presented by FutureSource Consulting, which has an amazing wealth of data and insights about the packaged home entertainment industry.  Below are some of the notes that I recorded during the session.  All of the data is from FutureSource.

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Apple iPad2 release exemplifies the Teardown Economy

This past weekend Apple released its highly anticipated iPad2 device.  Within hours the device had sold out at both brick and mortar stores and online retail sites.  The new tablet is currently back ordered with ship dates of 4-5 weeks from now.  But the aspect of the Apple’s supply chain that I found most interesting this weekend was not the out-of-stocks, but rather than the detailed analysis of the tablet’s supplier community performed by various gadget experts around the US.   Almost as fast as the product inventories were depleted, various web sites began to release detailed “teardowns” of the iPad2High resolution photographs of the Printed Circuit Board (PCB), battery and other components were published for all to see.  A complete Bill of Materials (BOM) listing each supplier and the cost of individual components were included as well.   There was even a teardown of an Apple branded case for the iPad!  Although the hype surrounding the iPad2 is significant, Apple is not the only vendor to receive such attention.  The Motorola Xoom received similar treatment in late February.

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GSA SmartPay Program

SmartPay allows government employees to use a corporate credit card to purchase goods and services from a wide variety of suppliers.  SmartPay was designed to simplify government “micro-purchases” with a dollar value of under $3000.  Government research found that the cost of issuing a purchase order, processing an invoice and cutting a check to be $75 per transaction on average.  As a result, the procurement and accounts payable groups at agencies might have been spending $75 to process a $25 or $50 purchase. 

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