Daily Archives: July 20, 2016

Societal Sustentation 38: The Sharing Economy

Cookie: Me got some something that you want
You got some something that me want
Put both somethings together and share

Ernie: I’ll take my something that you like
You take your something that I like
Then put both things together and share

Both: One for all, all for one
Sharing every everything and having a ball

Sharing is a good thing. Unless, of course, you are the one who isn’t being shared with (or the one who refused to share).

And, as we discussed in our “Future” of Procurement series a couple of years back, the Sharing Economy is one of the few true future trends of the space. And while the sharing economy is currently in the domain of individuals like you and I, and a handful of small businesses that have latched on, the sharing economy is going to migrate to medium sized business en-masse (driven by companies like Uber). This is going to give these businesses access to the latest and greatest technology and economics of scale that these medium-sized businesses will be unable to acquire on their own.

But just because it could help, that doesn’t mean it will help. Especially if the organization cannot accept, embrace, and form the new reality to its advantage. This means the organization has to start by identifying opportunities that it cannot achieve on its own. Then it will have to identify what partners it would need to bring those opportunities within its grasp. Finally, it will need to put together a plan to unite those partners and execute it to completion.

How will it do this?

Identify it’s biggest costs.

Is it the need for specialized equipment owned by only a few select suppliers? Is it the constant LTL shipments? Is it the need for regular day labour?

Identify which of the costs could be reduced with cooperation.

If a group of mid-size suppliers that required the specialized production equipment formed a co-operative and created a production facility based on that equipment that was shared and used to maximum efficiency, that could reduce costs. If a group of suppliers in a small radius band together and synchronize deliveries they can always ship FTL and even manage their own fleet for reduced costs. But unless they can find nearby companies that need day labour at different times, this is not likely something that can be solved by the sharing economy.

Be prepared to lead the charge.

Put together a plan to make it happen. Make sure it demonstrates the tangible benefits to those who will join the cooperative you are about to form as well as outlines exactly what will be required, when, and when the benefits you are promising will be realized. It has to be attractive to all parties you want to join, and has to show your commitment by showing that you’ve thought it all out.

A lot of your peers might want it to happen so that they can compete with the big guys, but very few will want to lead the charge.