Known for their timeless animated classics and blockbuster franchises, this Hollywood powerhouse has captivated audiences for over a century with unforgettable stories on big and small screens. Today, they continue to set the standard in cinematic experiences.
However, in the early 2000s, digital streaming emerged and disrupted the film industry. With sales falling and costs rising, the media powerhouse launched a decade-long supply chain management transformation with outsourcing as the core strategy.
An Iconic Studio: At a Glance
Industry:
Entertainment
Size:
10,000 + Employees
Headquarters:
Burbank, California
Years in Business:
102 years
Recognitions:
Surpassed $1 billion in
international box office
for 19 years
Highlights:
Shifted to 100% outsourced
model and saved $18.4M
CHALLENGE
Facing Uncertainty in the Digital Era
As digital streaming started to become the new standard for media consumption, traditional revenue streams in the film industry faced increasing pressure. The iconic studio found themselves struggling to maintain profitability while investing in digital content.
- Steady Decline in Home Video: DVD and Blu-ray sales dropped by up to 50% from peak years, driven by the rapid shift to digital streaming.
- Increasing Costs of Physical Media: Production and distribution costs for physical formats continued to rise, cutting into profit margins.
- Mounting Pressure for Higher Margins: Retailers and stakeholders demanded cost efficiency and more competitive pricing, squeezing non-growth segments.
- Outdated Supply Chain Models: Legacy logistics practices couldn’t keep pace with the new demands of a digital-first entertainment market.
TURNING POINT
The Outsourcing Shift That Changed Everything
The challenges above made it clear that the media giant needed a more efficient supply chain strategy. To achieve this, supply chain executives led a transformation centered on outsourcing. The solution involved shifting non-core roles to external partners to reduce labor costs and increase operational flexibility:
Streamlined Headcount
By outsourcing non-core functions and consolidating roles, the media giant reduced total headcount from 244 to 91 between 2005 and 2016.
Targeted Role Outsourcing
A total of 92 roles were outsourced, spanning customer service, planning, and supply chain analytics, with an additional 61 redundant roles consolidated.
Stakeholder Collaboration
Working closely with stakeholders, the company was able to maintain critical performance standards and ensure service quality.
Adaptive Strategy
The company continuously assessed digital transformation impacts and adjusted the outsourcing model as needed to stay competitive.
IMPACT
Complete Supply Chain Transformation
Achieving change wasn’t an overnight success. Through careful planning and phased implementation, the media conglomerate made steady progress by adopting supply chain outsourcing strategies that overcame cost burdens in a span of 10 years.
100% Outsourced Business Model
By 2019, the company had fully outsourced critical functions, including logistics, finance, and marketing. Streamlined operations resulted in a total headcount impact of 153 roles.
$18.4M Cost Savings Achieved
Supply chain optimization through outsourcing delivered significant financial benefits, saving $10.6 million for the 92 roles outsourced, with per-role savings ranging from 30-55%. Additionally, phasing out redundant positions resulted in $7.8 million in cost savings, bringing the total to $18.4 million.
Sustained Profitability
Cost reductions, along with the operational efficiency achieved through outsourcing, helped the company maintain profitability despite declining revenues from physical media.
Investing in Digital Expansion
With resources reallocated from traditional operations, the iconic studio invested in initiatives aimed at driving growth in the digital space. This strategic shift allowed them to remain competitive in an evolving industry.
FUTURE PLANS
Sustaining Success in the Digital Age
The journey to supply chain transformation taught the media giant valuable lessons in embracing change. Through outsourcing, the company has set a strong foundation to adapt to future shifts in the entertainment industry. Moving forward, they will continue to apply these strategies to stay competitive:
Finding New Areas to Optimize
Continuously evaluate possible opportunities in other business aspects where outsourcing can make an impact
Staying at the Forefront of Media Innovation
Embrace emerging technologies, new distribution channels, and storytelling methods to keep audiences engaged and invested as demands evolve.
Reinforcing Outsourcing Success
Consistently monitor outsourcing outcomes to stay aligned with strategic goals and maintain high performance across all outsourced functions.
CONCLUSION
Beyond Cost Savings: The Real Impact of Outsourcing
The iconic studio’s journey to supply chain transformation shows how outsourcing can overcome operational challenges in the entertainment field. This transformation wasn’t just about cutting costs. It was about future-proofing an industry leader in an era of rapid digital change. By embracing outsourcing, this studio didn’t just survive the streaming revolution; they positioned themselves for the next wave of media evolution.
No matter your industry, you can achieve the same breakthrough for your company with the right outsourcing partner. Emapta builds high-performing teams with the top 1% of global talent who can drive resilient, future-ready operations. Connect with us today to explore how our outsourcing solutions can power your business today.
Join us at Emapta as we continue to lead the transformation in workforce innovation and supply chain consulting. Our journey is one where forward-thinking solutions meet measurable impact, setting new standards for what it means to optimize operations. With Emapta as your strategic advisor, the future of your workforce isn’t just more efficient—it’s also more agile, scalable, and resilient.
