The value in supply chain intermediation

Filed in archive Point of view on March 31, 2008

Robert Rudzki of Supply Chain Management Review has written a blog recently about the topic of disintermediation in supply chain.

We all remember late 1990's when people were talking energetically about power of web and the ability disintermediate and thus increase the share of the profit. But Robert remembers from those days that in a conference

the chairman of one of the major office supply houses, took the opposite view. In a very calm, logical manner, he explained why his firm (and perhaps others) would not be displaced by the Internet, but would in fact lead the adoption of the Internet's capabilities to strengthen relationships with their customers.

Now we know that his point of view was correct. The question Robert raised was: Do you know any examples where the intermediary offers something of value?

I immediately came up with one: Handleman is an external party which manages the music category in Walmart. The company has the deep knowledge of music trends, forecasting and a good knowledge on what sells and what won't. Therefore Walmart has been able to optimize the SKU levels and inventory in its store and achieve higher profitability through the help of Handleman.

Do you know other examples?