Other Network Effects

So far, when I’ve been talking about Supply Chain Networks, I’ve been mostly talking about networks of data providers sending data to us, so we can normalize the data and send it on to our customers. This is a vital network for managing your supply chain, but I wanted to talk about some other network effects that are in play at GT Nexus.

Another type of network that has become very powerful is our network for freight procurement. We have an application that allows shippers to submit requests to ocean carriers and other providers for freight transportation and allows the providers to respond. Unlike  traditional license and install software, the carriers log in to the application and respond directly to the customer’s bid online. The carriers respond to the bid using the exact same screens, regardless of the customer. Once the carrier has been trained for one customer, they will know what to do from the next. Over time, this has built up a powerful network of shippers and carriers who interact over the platform for freight procurement. As more carriers participate, the more streamlined the process comes for everyone new who comes along. More customers bring on heavier carrier participation, which, in turn, makes things easier and easier as more customers come on board. Just like in the data quality network, this network demonstrates how network effects increase the value for everyone.

Another network well worth mentioning is the GT Nexus Shipper’s Council. This is a group of our customers who have grouped together and meet every quarter to discuss best practices and to push for industry change to help meet their mutual needs. The Shipper’s Council has helped pull some of the “levers and knobs” of the data quality network to drive improvement. There is a real human component to the network here, beyond the network of bits of data traveling over wires. Like the data quality network, this network of major shippers pooling their resources to drive change is a powerful manifestation of the network effect. As the council grows, it’s influence expands and the benefit to each member increases.

In the online world, there are many opportunities to take advantage of powerful network effects that would not be available in the license and install world. When network effects are in play, there is value creation that would not be otherwise attainable.

Joseph M Juran

In my work on data quality, I’ve learned a bit about Joseph M. Juran, the founder of the modern science of data quality. Joseph Juran did a lot of amazing things during his lifetime, including creating the “80-20 rule” that 80% of the problems stem from 20% of the cause. This interesting individual passed away only last year and lived to the ripe age of 103, staying active well into his 90s. Among the many things Juran is credited with is adding the human component into the study and management of data quality.  I think we all need to keep in mind that this is about managing behaviors and attitudes as much as it is about managing data.

As a final note of trivia, Joseph Juran’s brother is an Academy Award winner, and the director of “Attack of the 50 Foot Woman”.

I recommend taking the time to learn more about this interesting fellow.