The sharing economy: An effective model for supply chain management?

EmilyHunt

The sharing economy: An effective model for supply chain management?The sharing economy involves buying and selling temporary access to goods or services, usually arranged through an online platform. It is inevitably becoming a major source of revenue in today’s global economy, led by the likes of Uber and Airbnb. By using new digital platforms, the sharing economy has created an effective business model for the utilization of goods and availability of services.

To break it down a bit, the sharing economy leverages peer-to-peer, business-to-peer, and business-to-business connections to implement lending, accommodation, transportation, staffing and even music and video streaming services.

But what does the success of the sharing economy have to do with to supply chain management?

Some of the most successful sharing economy businesses are controversial because they seem to skirt public regulations for private gain. So instead, let’s focus on a smaller, less controversial business in the sharing economy–ShiftRide.

ShiftRide lets you “share your parked car with trusted drivers near you”, providing on-demand access to transportation where the user only pays for what they use in time and distance. ShiftRide, as do all businesses in the sharing economy, uses technology to connect the supply with the demand, and adds an environmentally friendly angle to its service.

So, what would happen if we transfer the ShiftRide or Uber sharing economy model to supply chain management? The answer is sustainability.

Benefits of the sharing economy model on supply chains

Integrating a ‘sharing first’ approach into supply chains creates endless possibilities. For example, businesses might participate in co-managed collaboration – sharing people or physical assets, planning technology, and data or reporting – all of which more effectively satisfies customer demand in a timely manner.

For the planet, supply chain sharing could mean a reduction in carbon emissions. For supply chains, it could mean a greater convenience and highly involved shareholders due to the nature of ‘sharing first’. More specifically, a company could pair up with third-party delivery services to achieve same day delivery, or find new and innovative ways to deal with unsold inventory such as renting it out to businesses and gathering data for which items are most popular to better target the needs of future customers.

As Alexa Cheater wrote in this post, new technologies with a sharing economy angle do drive savings.

“Nestle combined parts of its supply chain for fresh and chilled products in Belgium with PepsiCo, a clear rival. They bundled warehousing, packing and outbound distribution, and synchronized deliveries to fill trucks. The result was a 44% reduction in transportation costs, 55% lower carbon emissions and higher customer satisfaction levels.”

I’d love to hear how you think supply chains could be improved by taking a cue from the sharing economy. See you in the comments!

EmilyHunt

Currently working towards a Bachelor’s Degree focused in Global Business and Digital Arts from the University of Waterloo, Emily is in the midst of a co-op term with Kinaxis as a Content Developer in Knowledge Services. An experienced Digital Communications Specialist with a demonstrated history of working in the computer software industry, Emily’s interests include photography, user experience, computer science, and user interface design.

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