It’s been 22 years since I wrote a post introducing a concept I called “Supply Chain Operating Networks.” Here’s how I define SCONs today, which is not too different from how I defined them in 2003:
SCONs are the business equivalent of Facebook and LinkedIn — that is, industry networks that connect shippers, carriers, manufacturers, suppliers, retailers, logistics service providers, and other trading partners with each other. Instead of companies creating hundreds or thousands of one-to-one connections with their trading partners, they make a single connection to the network where their current partners and thousands of other prospective partners are also connected. Companies use the cloud-based software applications that reside on the network to communicate, collaborate, and execute business processes with their trading partners in more efficient, scalable, and innovative ways.
It’s fair to say that relatively few people understood what I was talking about in 2003. Facebook and LinkedIn were just getting off the ground at the time, so even social networks were new and unfamiliar.
Over the past two decades, I’ve continued to write about the “power of network effects” in supply chain and logistics. I’ve even made the case that companies need to create a new C-level executive role — that is, appoint a Chief Network Effects Officer who views supply chain management through a “network effects” prism.
In short, educating the market on the role and benefits of what many in the industry now call “Multi-enterprise Collaboration Networks” or “Multi-enterprise Supply Chain Business Networks” has been a long journey, and the education process continues.
That is why I’m excited to announce a new research initiative called Better With A Network, which will focus on answering some basic questions:
- How is Transportation Management better with a network?
- How is Supply Chain Planning better with a network?
- How is Procurement/Order Management better with a network?
- How is Trade/Regulatory Compliance better with a network?
The research will include interviews with companies currently using Supply Chain Operating Networks (SCONs) to understand how they use these networks, the benefits they’ve realized, lessons learned, and desired future capabilities. We will also gather insights from a diverse set of network providers to assess current market capabilities and explore emerging innovations and best practices in deploying and using SCONs. Initial research results will be published (via a market report, videos, and other mediums) in Q4 2025.
If you’re interested in participating in the research, either as a user or a network provider, please contact us.
Why do this research now?
Supply Chain Operating Networks provide a smarter, more efficient, and scalable way for companies to work together. Unfortunately, many companies still have a limited understanding or awareness of SCONs, even though we use networks in other areas of our personal and business lives — for example, in how we use travel platforms like Expedia to search for available seats (“capacity”) and fares (“rates”) across multiple airlines (“carriers”) connected to a single platform (“network”), and then we book and execute the transaction via the platform too.
Companies face many supply chain challenges and opportunities, including labor constraints, sustainability, global trade regulations, and more stringent customer requirements. In response, they need to develop stronger, more transparent relationships with suppliers; improve real-time visibility to supply and demand; communicate and collaborate more effectively with suppliers, customers, logistics service providers, and other trading partners; and obtain greenhouse gas emissions data from trading partners and ensure no forced labor exists across their supply chain.
Addressing these requirements cannot be solved or realized using the same level of thinking, the same technologies, and the same processes they have used in the past. Collaboration, especially with external trading partners, is no longer an option; it is imperative. We believe that Supply Chain Operating Networks are the best platform for driving change and innovation in supply chain management moving forward.
We also believe that Marc Andreessen’s famous quote from 2011 that “Software is eating the world” needs to get updated. Today, it is more accurate to say that “Software and networks are eating the world” — especially in the supply chain and logistics world.
It’s taken 22 years to reach this point, and more work is required to fully enable network effects in supply chain management, but I’m excited as ever for the road ahead.