Managing Digital Supply Chain in Microsoft

Introduction

To succeed and stay competitive in the digital and online media market, media companies should assist their teams to work together more efficiently, amalgamate content and business systems, and streamline business processes. The delicate act of balancing of sustaining a high level of service and at minimal costs is becoming increasingly difficult for supply chain managers as more businesses are desperately attempting to respond to the increasing demand by clients to obtain more for less. This pressure is being felt at a time when businesses defying boundaries to become more global, supply chains are becoming longer while competition is also becoming increasingly fierce (Bowen & Ford, 47 2003).

This paper highlights the challenges prompted by the Digital Media Supply Chain. The necessity to develop more efficient processes to slash costs, capitalize on the bottom line. The need for more nimbleness and litheness with regards to input and output formats. The need to run business processes such as sales, invoicing, customers, as well as suppliers.

In the process of Digital Supply Chain, management is essential in ensuring efficiency even to subsequent stages. Operations management is thus an essential tool in the application of this supply chain. Technological innovation and advancements have transformed Digital Supply Chain from local-network users to multi-users globally today. This continued transformation in technology has called for new strategies in managing operations of the Digital Supply Chain. This research thus applies operations management theories and strategies in the management of the Digital supply chain. (Hill & Hill, 15 2011).

Presently, most media companies control these processes manually. Regardless of this, companies keep growing to meet client needs, even though at a rather sluggish speed. Problems come about when fresh impromptu workflows are required to revise or get around standard procedures to avoid overrunning deadlines as well as surmounting limitations in the supply chain.

The digital supply chain is highly applied by many media businesses today, if not well managed it leads to the emergence of challenges/needs for these businesses. Businesses are faced with the challenge of efficiently managing metadata and packaging it with the delivered product. These businesses may also encounter the challenge of adapting to any content, any device, and any time media 2.0 paradigm. These businesses must see it as their need to be more flexible when it comes to input and output formats. Microsoft thus must consider challenges posed by the digital supply chain to businesses applying it.

Media and entertainment companies such as Microsoft nowadays encounter unparalleled opportunities in the markets they operate in. Advertising, broadcasting, film, music, and publishing companies may subscribe to diverse business models as well as have diverse goals, but have a lot of crucial concerns in common. The fast, continuous change from analog to digital creation, management, and distribution of content has presented many opportunities and new challenges as well. For example, clients want custom-made content, which is adapted to their specific interests as well as lifestyles. They want to receive that content on their favorable devices—televisions, computers, mobile phones, and handy digital players—and they want to be able to access the content anytime, anywhere. In addition, clients are searching for an exciting, enriching experience, and they want to be able to easily distribute as well as share content created by them(Chase & Apte, 56 2007; Slack et al, 105 2010).

On the other hand, markets are more disjointed than ever. End-users have access to a diverse array of content sources and media channels from which to choose. Organizations that are in the business of creating and distributing content like Microsoft face the challenge of offering that content to the end-users who need it most effectively. All this must be done while considering the safety of their digital assets and intellectual property, and protecting content and communications from illegal access.

The purpose of this research is to figure out ways Media organizations such as Microsoft:

• Generate, handle, and issue digital content as efficiently as possible, and obtain the maximum value possible from that content.
• improve their technology to allow for Digital Supply Chain that is highly efficient and reliable not only to customers but also to all stakeholders.
• Make most of and restructure their business framework about supply chain management, to meet business needs, and to closely link their business management systems with those concerned with content generation and distribution.
• Undertake management of operations in the Digital Supply Chain process from the source to the end-user while ensuring.

Literature Review

The digital supply chain includes the process by which delivery of digital media is carried out through electronic means from its point of origin /source to its final destination. Under the concept of Digital Supply Chain, the source of the digital media is known as the content provider while the destination is the consumer. Within the Digital Supply Chain, those boxes used to carry goods are replaced by bits while the warehouses in which the boxes are stored are replaced by data centers. In this supply chain, the management moves from conventional distribution to retailers to broadband providers. After the broadband providers, the management shifts to online, and lastly directly to the consumers.

In the process of Digital Supply Chain, the content provider supplies the actual products to be supplied to the consumers. The products provided, either disks or tapes are then converted to digital format under the capture stage. The converted content now in digital format is too big and is compressed to a smaller size in the compression stage. The compressed content undergoes the quality control stage where it is encoded with desired outcomes and free of corruption. The content is now ready to be uploaded online through Digital Asset Management to become available to its end-user. Thus the digital supply chain includes; true on-demand product availability, ease of use, and fast search for content, as well as pricing and subscriptions.

Research methodology

Considering the nature of the topic being researched, the researcher opted for questionnaires as well as interviews as his preferred mode of gathering the information that he needs to carry out the research (Liker, 47 2004).

The researcher interviewed a hundred people and issued the same number of questionnaires to be filled out. The interviews were structured to enable the researcher to read a pattern by analyzing how different people responded to the same set of questions. Some of the questions that were asked in both the questionnaire and the interview are whether Microsoft clients were satisfied with the products and services that they received from Microsoft and whether the mode of delivering the aforementioned products and services was suitable for their needs and demands. If their needs were not met entirely because of the model of service delivery, what improvements would they want to change for their needs to be met more efficiently and effectively?

These particular questions were asked to find out whether Microsoft was managing its supply chain effectively and efficiently in such a way that it was able to meet its customer’s needs fully or whether there was a chasm in terms of meeting their customers’ needs as a result of poor supply chain management. If the case was the latter, a quest to find out what exactly contributed to this undesirable state of affairs.

Findings and interpretations

Microsoft is known for having extremely bold ambitions relative to its peers. The world’s topmost software company offers a wide array of products and services that include its Windows operating systems as well as Office software suite. The organization has ventured into new markets like video game consoles, servers as well as storage software, and digital music players. In the year 2008, the organization made an unwelcome bid to purchase Yahoo at the price of $44.6 billion (IBISWorld, 12 2008).

The organization is renowned for its litheness to act in response to new demand even from up-and-coming markets. This was evident in the findings with Microsoft clients showing satisfaction with the availability of products needed. For instance, the company was well aware and took advantage of the current growth opportunities in China and Eastern Europe. It is also known to positively respond to the dynamic needs of customers that are always changing. This was evident with customers responding positively when asked about the availability of digital media in different formats. Reacting to the aforementioned global challenges, Microsoft provides Microsoft Dynamics, a suite of integrated, adaptable business applications for small and medium-sized organizations and divisions of large enterprises. These integrated solutions—delivered through a worldwide network of experienced Microsoft Certified Partners—work like and with familiar Microsoft software and help automate and improve financial, customer relationship, and supply chain management (Hayes et al, 23 2005). This was evident with customers accessing a variety of products from small, medium-sized, and large organizations across the world

The core process of a digital supply chain comprises three main aspects:

1. Realistic on-demand merchandise accessibility
2. Convenience of use plus fast content search as well as activation.
3. Pricing of the organization’s products or services as well as subscriptions.

Microsoft key strengths

Microsoft assists organizations to connect the whole of their supply chain in a prolific, expeditious flow. The business value between the organization and its relationships with business partners is improved considerably. These improved efficiencies in distribution subsequently result in better client satisfaction as well as considerably reducing the cost of carrying out business (Dash& Chase, 36 2010). This is because Microsoft can capture media content faster through business partnering and thus ensure customers get products quickly and in a constant flow.

Microsoft’s digital supply chain offers its employees myriad modes of planning, coordinating, and administrative delivery of products as well as services in a productive manner. Organizations register considerable return on investment owing to improved individual and group output, rationalized operations, and more effective teamwork. By involving the organization in the supply chain, Microsoft can offer products which consumers expect from those organizations. This was evident in the findings with customers showing satisfaction with products from different organizations supplied by Microsoft.

Microsoft Dynamics were instrumental in aiding the organization to enhance its supply chain efficiency without spending a lot of time on conducting training for the organization’s employees. The company ensured that the user interface appears to be recognizable, reliable, and convenient. In the findings, this was evident with customers showing satisfaction with the ease to use Microsoft in the digital supply chain even with or little training.

Microsoft Dynamics enables individuals through the entire supply chain to perceive the client’s demands as the transmission of products and services thus expediting their decision-making process. As a result, improved decisions about business are made leading the company to adopt the most ideal course of action necessary then (Klassen&Menor, 52 2006). By doing this Microsoft has ensured that customers’ complaints and suggestions are adhered to in a short time. The organizations are also enabled to ensure customer loyalty by understanding their needs and taking necessary measures quickly.

Drivers for Change

Several factors influence changes in supply chain management:

1. A wider variety of products and services to the consumers leading to increased market fragmentation.
2. Profit erosion
3. Deflation of prices
4. Increase in the range of products and services
5. Development of new product types by industry market leaders
6. Necessity for real-time visibility
7. New market entrants
8. Expansion in multichannel sales

Microsoft together with its network of industry partners are engaged in adopting solutions revolving around integration and collaboration, which will be crucial in assisting single stores and large enterprises to carry out the following:

Drive Retail Innovation

In today’s consumer-driven economy, customers are increasingly becoming receptive to the capability of conducting business and enhanced with no regard to borders. Regarding this Microsoft is managing the Digital Supply Chain differently by providing a one-on-one link between organizations and their consumers. To the retailers and the consumer product industry, this implies immediate incorporation around the supply chain. To shore up the future of retailing, Microsoft together with its industry partners are devising a common location whereby manufacturers, distributors, retailers, and consumers can interact. In the department of advertising, many organizations are circumventing conventional routes and marketing directly to their clients by way of cell phones, text messaging, instant messaging, as well as one-to-one personalization. The supply chain is gradually changing to become more consumer-focused and cooperation will hold up the customer experience, as opposed to cost reduction (Johnston & Clark, 41 2008).

Build High-Value Business Connections

There are by far many touchpoints in the retail market. Integration together with collaboration is not only vital to the client experience in a multichannel world but is also crucial to individuals in every facet of the organization. Retailers bear the brunt on two fronts: employees and suppliers. For employees, the future will be about getting more technology into their hands to improve productivity, provide supply chain visibility, and create a better work experience. For suppliers, it will be about instant access to data. Both, ultimately, will improve the customer experience, build loyalty and generate repeat business. Microsoft in the Digital supply chain has enhanced this through the use of online chat between customers and organizations to ensure collaboration between the two parties. Microsoft has also enhanced communication between both ends of the supply chain as a way of ensuring technological innovativeness to suit customers in the best way.

Strengthen Customer Relationships

Ultimately, the solution to Digital supply chain success entails finding ways and means to draw and establish beneficial relationships with clients through ensuring the availability of a variety of products. Microsoft together with its industry partners provides technology solutions that assist retailers to understand client requirements as well as trends in the marketplace at the same time enabling employees to better customer relations at every phase of a business transaction. Microsoft has enabled this by establishing a research team that reacts to and identifies problems experienced by consumers. Microsoft also provides an instant communication link between customers and itself as a way to allow customer-oriented supply. (Fitzsimmons et al, 34 2011; Slack et al, 87 2009)

Improve Operations

To act in response to consumer needs, the market, and industry changes, retailers are required to be alert for them to make the most out of technologies that allow faultless work determined by demand. This means a technology structure based on factual information management. In the future, technology will allow one outlook of the client across every channel, and suppliers will have to quit analyzing data and concentrate on the structure that holds it. The supply chain is going to be client-focused, and teamwork will improve the client experience as opposed to cost-cutting. All will be done by joining dissimilar systems entrenched in the business operations. When RFID technology matures in the next ten years, retailer-supplier cooperation will be a medium for operational innovation that allows faultless workflow at both the business process as well as individual levels. Microsoft has reacted to these trends in the supply chain through the introduction of easy-to-use and efficient technologies which enhance the efficient supply of digital media.

Supply Chain Visibility

Microsoft technology can be applied immediately to gain utmost benefit from existing systems and allow businesses to have instant visibility of their operations and product movement through their supply chain associates. With solutions that can more effort lastly offer a particular, consolidated outlook of product information when it is required, retailers and suppliers can swiftly share, look as well as analyze documents and information to make more educated and precise business decisions. By enhancing communication and visibility all through the supply chain, Microsoft together with its partners enables retailers to generate better experiences for their suppliers, employees, and customers. Integration with legacy applications, data warehouses, and enterprise resource planning (ERP) systems and the creation of internal and external vendor association solutions are gotten by way of standards-based, open, scalable, and adaptable technology that allows data to be held centrally and accessed by many devices.

This implies that end users can communicate easily. This will enhance productivity and precision because only one edition of the newest information is available.

Supplier Collaboration

Letting suppliers have access to certain sales information, forecasts and product information, and information relating to purchase orders can help expedite replacement and assist retailers and suppliers expect out-of-stocks. Microsoft has ensured supplier collaboration through instant recording of customers’ demand for media content. This has ensured a constant supply of new products especially through which are highly demanded.

The Technology

Most supply chain solutions influence applications that run on the Microsoft Windows operating system and Microsoft Office software, with which most users are conversant; this enables the implementation to be simpler in addition to lessening training costs. Microsoft systems and partners provide retailers the opportunity to lower the total cost of ownership through best-of-breed solutions devised in a way to enable the retailer’s technical team to easily run systems from a central source. For instance, it can run applications distantly, download upgrades, and check for troubles. This is on top of the cost-effectiveness of putting in place a Microsoft solution. Microsoft supply chain management technology is grounded by the Microsoft.NET Framework, the Microsoft Web services tactic for connecting data, people, systems, and devices. The gathering and management of data in supply chain databases are dealt with using Microsoft SQL Server, a potent device that can adjust to the number of requests dealt with by the activities taking place. A Vital connection in the supply chain is the synchronization and transmission of information between the parties concerned. Microsoft BizTalk Server is instrumental in ensuring this. Among its major roles is to direct the stream of information transmitted by Electronic Data Interchange (EDI) to applications or Web services. Microsoft Windows Server 2003 supports sophisticated communication and alliance. Supported by XML Web services, it offers shared services such as discussions, calendars, and document management.

Conclusion

Collaboration

One cannot overemphasize the fact that for any supply chain to operate with increase deficiency, all the individuals and groups involved ranging from the suppliers of raw material to consumers and every aspect in between are required to conduct their respective activities collectively as well as investing in technology that will allow the entire team to transmit information regarding their products with increased precision Perceptive business entities are focusing a lot more on where the yoke of ever-increasing costs will be borne. To ensure collaboration within Digital Supply Chain, Microsoft has established a chain of operations between all the stages of the digital supply chain. This has enabled a quicker movement of media content from the content provider to the consumers.

Supply Chain Networks

Successful futuristic business entities are going to be those that play a central part in creating an appealing supply chain with partners both up as well as downstream, as opposed to concentrating entirely on plans that facilitate individual success. It is estimated that the joint partnership approach could slash supply chain costs by approximately10 percent while enhancing the quality of the finished merchandise. There is a tangible craving for each of these networks to outstrip each other in terms of performance. This will be a crucial catalyst in providing cost-effective chains in the days to come. Microsoft has ensured a high network between itself and content providers in ensuring constant supply as well as the flow of information. Through this Microsoft has ensured availability of all customer need contents by ensuring efficiency in the content provider stage of the Digital Supply Chain

Obstacles to Change

Present technology remedies for supply chain management are at most times intricate thus they need considerable integration as well as change management attempts to implement. It is projected that not less than 65 percent of existing supply chain management approaches used by various business entities are domestic. This is mainly because, over the past years, integrated supply chain management technology providers were limited few. Since more eccentric remedies are readily accessible now, businesses are shifting from homegrown solutions to packaged solutions.

Enabling a People Ready Business

Whereas technology offers businesses a technical structure for the achievement of success, some businesses have known all along that it is people such as employees, suppliers, consultants, partners, and customers who are central to their achievement of success.

It is the knack of people who perceive technology’s latent to improve all features of business operations and link them with clients, which results in novelty and characterizes the way business operations are carried out. It is the joint awareness, abilities, thoughts of people, and technology remedies that assist businesses to establish, mature, and function more efficiently and profitably (Heracleous and Wirtz, 45 2010). A good business distinguishes the part that people are responsible for making the variation between just existing and prosperity in the progressively more competitive global marketplace. It is a business that goes out of its way to shore up people’s capacity to arrive at the best decisions and yield maximally at every stage of the supply value chain (Burnes, Lewis and Langer, 1000 2004).

What Does This Mean for You as a Supplier?

The transformation of businesses all over the world is inevitable in the coming years as they take up and assimilate revolutionary technological advances. Exhilarating advancements in software, hardware as well as end-user experiences will redesign how industries increase their respective bottom lines as well as make a distinction on the way they transact business with their clients. Ground-breaking technologies are going to enhance the way organizations observe and exploit their market trends, spot novel routes for satisfying customer’s needs, as well as make the most of chances to customize experiences to clients’ expectations (Slack, & Lewis, 98 2011; Womack et al, 74 2007).

Since digital supply chain research is at its infant stage, many obstacles face organizations that have decided to take up digital supply chain management. These challenges require solutions that are IT-based conducted by researchers with a deep interest in operations management for them to be comprehensively dealt with (Gulledge&Chavusholu, 756 2008; Bottrill, et al, 124 2008). Research is required in various facets:

Organizational Readiness

The questions below should be considered to indicate some signs of whether an organization is ready for digital supply chain adoption:

• Whether there is a clear consideration of the necessity for and repercussion of the digital supply value chain within the organizations in question?
• Whether the digital supply chain is a main concern for the organization?
• Is it urgent for the organization to shift to digital supply chain management?
• Are there enough and pertinent resources to undertake the proposed project?
• Does the organization have mapped out future processes?

Interaction between supply chain integration and digital content

It appears rather commonplace that the dealings between supply chain, supply chain integration as well as supply chain networks in the material supply chain situation may vary in the digital substance value chains. It is also a possibility that the dealings between vertical integration and digital substance may vary from the dealings between horizontal integration and digital content (Bitner, Ostrom& Morgan, 81 2008).

Success and failure factors of digital supply chain implementation

The statements below indicate the likelihood why succeed or fail at the effort of digital supply chain execution:

• the result of the novel digital supply chain system should be clearly understood.
• Management should allocate the relevant individuals to the digital supply chain project from the start.
• Cultural issues adversely affect quick decision-making.
• the future condition of the organization should be clearly defined, depicted, and comprehended by employees of the organization.

Recommendations

Microsoft should improve its technology that can be implemented to gain maximum benefits from present systems as well as allow businesses to gain round-the-clock visibility of their activities as well as that of the movement of their merchandise through their supply chain partners. By shoring up communication as well as visibility across the supply chain, Microsoft together with its partners assists businesses to offer by far superior experiences for their suppliers, employees, and customers.

Combination with heritage applications, information storehouses, and enterprise resource planning (ERP) systems as well as the creation of internal and external vendor association solutions are gained by way of standards-based, open, scalable, and adjustable technology that allows data to be kept in a single place and can be accessed by various technological devices.

As a result, the users can be updated well than before. This can enhance productivity as well as precision since only one version of the most recent information is obtainable. Medium and large organizations can increase the efficiency of their functions by running products, processes, transactions as well as relationships with their suppliers and customers for increased profitability through Microsoft.

Microsoft decided to improve its digital supply chain by altering its software systems that were extremely expensive to maintain. Microsoft offers information technology, operating systems, middleware solutions, small as well as medium business applications, professional services, and other software solutions. The organization registered yearly sales in the year 2008 of not less than US$60 billion and boasted of not less than 90,000 employees globally.

The core business motivators for the organization were as follows:

• Superior information integration between applications.
• Removal of manual inter-organizational processes.
• More efficient usage of excess funds and better working capital management.
• Increased straight-through processing of foreign exchange trading.
• Lowering bank fees and increased cost-effective processing of payments.
• Lowering of risks as well as better control of cash flows
• Improved usage of human resources.

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