In Warren's view, CanGo faces three main threats:

• Elimination of the middlemen by sellers buying wholesalers or wholesalers starting their own retail Web sites.
   
• E-commerce Web sites outsourcing the book distribution process to third party logistics partners.
   
• Authors selling directly to the public.

All of these threats involve one party in the supply chain bypassing existing organizations to shorten the supply chain, a process known as disintermediation. Warren has outlined three alternatives to deal with these increased uncertainties in the supply chain: CanGo can vertically integrate by buying suppliers, carrying extra inventory, or establishing stronger long-term relationships with its vendors. Warren also wants CanGo to give some thought to technological developments that underlie the quick response systems.

Just-in-time (JIT) inventory techniques, for example, minimize inventory by making sure inputs arrive just-in-time for use in manufacturing. As with JIT, quick response systems in service firms can reduce waste in the form of inventory and simplify the process of managing inventories. Computer technology, however, has played a much more important role in service quick response systems than is the case with JIT. Traditionally, electronic data interchange or EDI has served as a primary electronic link between business partners in the supply chain. Large retailers communicated through EDI with major suppliers, sending instant information on sales and inventory levels. The problem with EDI was the expense involved. Only the largest retailers and suppliers could afford the communications systems. The Internet offers a new, more cost-effective communications option to all sizes of competitors. Further, a new programming language, XML (extensible markup language) allows communication across the web between collaborators with virtually any type of underlying computer system. Where communication may have previously been difficult because of incompatible sales or inventory structures, XML enables close relations between buyers and sellers. It is important that CanGo be prepared for changes in this area.

 
 
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