Supply chain disruptions can cause significant negative losses in terms of finances (62%), logistics (54%), and reputation (54%).BCI Supply Chain Resilience Report 2018
Many people think a supply chain is just the group of providers from which you purchase products. But that’s an oversimplification. A supply chain is a complex system that allows you to build a product efficiently and at the right price point and then deploy and support it. In fact, they can have a major impact on your organization’s bottom line and performance. A well-designed supply chain for your CDN can help you gain buying power, anticipate inventory needs, increase deployment time and minimize downtime.
But setting up a supply chain for complex products like CDN hardware or edge infrastructure can be more challenging than setting one up for simpler products like office supplies or retail goods. Let’s look at some ways working with the right partner can help.
Why You Need a Supply Chain Partner for Efficient Production
We already mentioned some of the benefits of a supply chain, like buying power, access to inventory, and hardware testing. But how do these and other supply chain advantages translate into business benefits?
Consider the example of an over-the-top (OTT) media provider like Netflix. Netflix’s mission is to provide the very best content for its viewers. This requires producing original content as well as securing exclusive streaming rights to other TV shows and movies. The time, money, and personnel required to accomplish these tasks leaves minimal resources to create and manage a supply chain.
The Netflix example highlights the need to find a partner who can help create a supply chain. By working with a CDN partner, you can outsource these critical tasks and stay focused on your organization’s main goal. With that in mind, let’s consider three ways a supply chain can help you keep up with hardware demands without breaking the bank.
1. Inventory and purchasing power
Imagine that you need to build 25 servers over the next 12 weeks, but inventory delivery times range from 8-14 weeks. This means the soonest date you’ll have all of the parts to build a single server is too close to your delivery target. However, a CDN manufacturer will use a rolling inventory system to deliver your components faster and may even be able to negotiate better shipping times from the manufacturer because of their buying power. This inventory and buying power allows you to build your servers on time and on budget.
Additionally, if you don’t specialize in server supply chains, it’s not likely that you have the rolling inventory capabilities to deploy quickly. This is especially true since rolling inventory adds transportation, storage, and staffing costs that don’t make sense for sporadic deployments.
2. Optimized labor force
Depending on your supply chain partner, they may have measures in place to protect against natural disasters. Intequus has a comprehensive business continuity plan in place that protects its customers in a variety of ways. For example, in the case of a disaster, it’s prepared to move production across the country with minimal friction. Or, in the case of production backlogs, Intequus can shift employees to the overloaded line. This gives it an unparalleled advantage in keeping up with production in even the most challenging of circumstances.
3. Hardware testing
One of the most complex parts of choosing CDN network architecture is the vetting process. On paper, choosing the best available parts and putting them in a machine should yield the best results, but this is not the case. There are compatibility issues that can prevent components from working together or performing at their optimal capacity. An experienced supply chain partner can help you build your device and test it for functionality and performance.How does this benefit your organization? Building and testing hardware is time-consuming and expensive, not to mention critical to guaranteeing builds will perform consistently at scale. By choosing a partner who is correctly tooled for this type of work, you’ll avoid the headache of sourcing, building, and optimizing your hardware.
Build Faster, Smarter, and More Profitably
Your technology can help you give customers the best experience possible and stand out among competitors. Leveraging a supply chain will ensure you always have cost-effective, optimized technology available when you need it. Intequus can help take the work out of building your supply chain. Talk to an expert to learn more about how you can start building more profitably.
In the next article, Managing Your CDN Supply Chain, we’ll dig deeper into CDN supply chains and cover these three points:
- What are the basic components of an effective supply chain?
- Why do you need to understand the customer segment to build an effective supply chain?
- What change management issues do you need to consider?