Supply Chain Innovation

July 5, 2011 in Business Models, Competition, Innovation, Value Chains

The second stage of my career was spent in high-tech hardware and software companies, where I learned about supply chains and distribution channels. By this point, globalization was in full swing, and I was witness to a sweeping transition from heavy vertical integration to heavy outsourcing.

I saw how to use infrastructure and component costs to our strategic advantage. One company I worked for, while it was a much smaller entity, drove an entrenched multibillion dollar industry leader to the brink of bankruptcy. It developed a single-minded channel strategy, and then provided liberal margins to resellers, enabled by lower manufacturing costs in Taiwan.

Our competitor was stuck with sales overhead it couldn’t shed fast enough. It was an eye-opener: the unique power of the supply chain in all its glory.

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