Nintendo is taking supplier collaboration to a new level.
Unity and collaboration are two important factors in supply chain management, as they allow companies to enhance efficiency. However, achieving these operational goals often requires adjusting current practices in the supply chain. Consumer electronics company Nintendo understands this concept, and it just announced it will make a substantial investment in its distributor JESNET.
Nintendo Purchases Stake in JESNET
According to an official statement from the brand on August 25, 2016, Nintendo will purchase stock of JESNET, effectively subsidizing the distribution company. Specifically, Nintendo will spend $46.5 million to acquire 70 percent of JESNET. Additionally, JESNET will work with AJIOKA Co., Ltd, a video game wholesale business. All of this will be made official in April 2017.
According to Nintendo, the purpose of this action is to continue delivering excellent customer service through enhanced collaboration in the supply chain. This integration of product development into the supply chain is expected to improve decision-making and sales competitiveness.
As Digital Trends explained, Nintendo's announcement comes a months before the brand is set to release the NX, a console which will likely be a hybrid of a handheld and console system. This latest gaming device is expected to have high-quality graphics and cater to gamers' need for more data storage. The sales of NX may be influenced by Nintendo's purchasing of JESNET stock.
However, Nintendo will still need to make additional adjustments in the supply chain to better leverage alignment as new stakeholders enter decision making. The company must have the appropriate tools to minimize the disruption caused by subsidizing JESNET and ensure the supply chain makes the most of this decision.
How Nintendo Can Play up Collaboration in the Supply Chain
Nintendo is integrating its suppliers more tightly in the supply chain, and it can use general supplier relationship best practices to ease this transition. According to Supply & Demand Chain Executive, data collection plays an integral role in this process. Specifically, supply chain management teams need quality data from their suppliers. This data should convey information on company locations, second tier suppliers, services and products.
However, supply chain management must select data collection devices carefully. Ease of use is a crucial consideration, as complicated technology will only decrease efficiency. For instance, utilizing enterprise mobility solutions that integrate with existing ERP systems allows companies to seamlessly incorporate advanced technology into current workflows.
As Supply Chain 24/7 explained, supply chain management must also ensure the appropriate data gets to the right people. While this is vital for everyday efficiency, it is even more important when issues arise. Individuals who have the skills and knowledge to overcome challenges must have the data necessary to make informed decisions. Automated data collection solutions can assist with this as they ensure all supply chain stakeholders have access to the same information. This way, everyone can align their efforts to overcome any disruptions.
Because the subsidization of JESNET won't be finalized until April of next year, Nintendo has plenty of time to prepare its supply chain for the transition. Other companies would do well to follow this lead of early planning.