Spacious Potential in the Sharing Economy

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By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

The sharing economy is no longer just a catchy turn of phrase; today, sharing, renting and subscription services are everywhere. AirBnB for your holiday rental; WeWork for freelancers who prefer the office environment; Rover for the pup’s midday walk; Uber and Lyft when you need someone to drive you places; and Zipcar, LimeBike or Bird Scooters when you’d rather do the driving yourself. The potential applications are endless.

Although only 19 percent of U.S. adults have engaged in a sharing-economy transaction, PwC research reveals that 83 percent of survey respondents believe these services make life more convenient and efficient, 76 percent say they are better for the environment, and 43 percent admit that owning things can feel like a burden.

As ownership becomes unfashionable, the fashion industry is also taking notice.

“In October, the mall fixture [Express] launched Style Trial, a service that allows customers to borrow up to three pieces — with no limits on exchanges, free shipping both ways and free dry cleaning — for $69.95 per month,” writes Jasmin Malik Chua in Sourcing Journal. “If a subscriber loves something to death, she can buy it at a discount for keeps. Otherwise, she can keep garments circulating in an eternally refreshed ‘closet in the cloud’ with virtually infinite options yet zero commitments.”

Jim Hilt, Express executive vice president and chief customer experience officer, explains that this allows customers to tap the company’s “full assortment and styling services without breaking the budget.”

In addition to this kind of flexibility and cost savings, sharing clothes eliminates the hassle of shopping malls and the time spent packing bags for donation — not to mention all those minutes staring at our wardrobes trying to decide if an item still sparks joy.

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Shifting business models

Until very recently, most of us would never have considered staying in some random person’s home while on vacation, let alone sharing a sweater with a bunch of strangers. Yet today, Airbnb averages 425,000 guests per night — nearly 22 percent more than Hilton Worldwide.

“The data shows, renting and sharing are becoming increasingly popular alternatives,” the PwC report asserts. “Executives will be wise to assess the role of their product and brand in this model — are you squarely a purveyor of goods, or are you an enabler?”

For those supply chain managers bracing for change and facing some tough calls concerning clothing lifespans; quality control of shared garments; and logistics economics, especially for lower-cost items, there is some good news. The sharing economy is also flourishing in the education space, with LinkedIn Learning, Grow with Google, and a seemingly infinite number of instructive and informative videos on YouTube. Our own channel is bursting at the seams with customer success stories, webinars, research, annual conference sessions, and a multitude of supply chain education tailored to fit just right.

To join ASCM, joint membership is available through Australasian Supply Chain Institute for just $440 per annum. Visit our website for a full list of membership benefits.

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Indian regulations rain on Amazon and Walmart’s e-commerce parade

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

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Amazon and Walmart subsidiary Flipkart is scrambling to revamp its supply chains, vendor relationships and systems. New regulations from the world’s fastest growing economy have undermined these retailers’ business models and obstructed their sales in India’s burgeoning e-commerce sector.

Previously, foreign companies were forbidden from holding their own online inventory and shipping it directly to customers. Amazon had found a workaround in the form of local subsidiaries of firms in which it had holdings, which opponents insisted was violating the spirit of the rule. Largely due to such proxy sellers, Amazon and Walmart had controlled almost 80 percent of India’s e-commerce.

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But as of February 1, such goods are not permitted for sale by foreign companies. In addition, these firms are barred from entering into exclusive online sales agreements. A vendor’s inventory also will be considered under the control of an e-commerce marketplace if more than one-quarter of its sales are derived there.

The protectionist move follows ongoing complaints from domestic retailers over anticompetitive practices. Amazon and Walmart both requested a six-month postponement of the effective date but were denied.

“Thousands of products were pulled from Amazon.com Inc.’s India website Friday — the first direct impact from the country’s new e-commerce rules,” writes Corinne Abrams in the Wall Street Journal. The article goes on to explain that the restrictions are the latest effort by India to curb U.S. tech giants’ dominance in the country and “promote homegrown companies” as Prime Minister Narendra Modi seeks a second term.

“Both Amazon and Walmart have made big bets in India, where the e-commerce market is estimated to balloon to $72 billion in 2022,” Abrams adds. “Amazon has pledged to invest $5 billion to expand in [India], while Walmart’s takeover of India’s Flipkart for $16 billion was its biggest acquisition ever.”

Global supply chain know-how

The operations of these e-commerce giants have been thrown into disarray. As these companies, and others, navigate such severe regulatory pressure, success will hinge upon the effectiveness, responsiveness and flexibility of their supply chains.

ASCM provides the resources you need to plot your own course through the ever-shifting global marketplace. The APICS Certified Supply Chain Professional (CSCP) program enables individuals to master the fundamentals of supply chain strategy, business model design, relationship-building, risk management and much more. In particular, the CSCP learning system includes a module centered around monetary, regulatory and trade considerations; negotiation and collaboration; and international standards and compliance. Begin your journey toward this world-class certification today.

The Australasian Supply Chain Institute (ASCI) is the Premier Channel Partner for APICS and offers joint memberships with ASCI for local and ASCM for global membership for both corporates and individuals. Contact us today at http://www.asci.org.au/membership or enquiries@asci.org.au.

Climate Change Disruptors on the Rise

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

As I write this, the National Weather Service (NWS) is warning of severe cold here in Chicago, with wind chill temperatures expected to reach an excruciating 55 below zero. The NWS has even urged us to protect our lungs by minimizing talking and not taking deep breaths. Meanwhile, on the other side of the world, people in South Australia’s coastal capital of Adelaide are facing a different kind of lung injury — from dangerous air quality and ozone exposure. Adelaide recently reached 46.2 Celsius (nearly 116 degrees Fahrenheit), breaking a 130-year record.

When we talk about extreme weather statistics such as these, they are typically followed by warnings of disastrous sea levels, catastrophic Arctic ice decline, and life-threatening floods or hurricanes. “Not enough water to make Coke” and “sweltering Disney theme parks” do seem to pale in comparison. However, a recent Bloomberg article suggests that climate change will have a business impact that is devastating in its own way.

“Climate change is expected to cascade through the economy — disrupting supply chains, disabling operations and driving away customers,” author Christopher Flavelle writes, adding that numerous executives see “inherent climate-related risks with the potential to have a substantial financial or strategic impact on their business.”

Visit ASCI’s previous blog form Corporate Member – Nufarm – who utilises specific advanced analytics for predicting and planning for weather patterns.

One of the most commonly cited issues by company leaders is draught. Specifically, in addition to Coca-Cola fearing water shortages will threaten its bottling operations, Intel is concerned about escalating costs for the water-intensive process of semiconductor manufacturing.

Other professionals are kept up at night worrying about damage to their networks from hurricanes and wildfires (AT&T), global pandemics dissuading people from travel (VISA), and increased flooding and flood insurance premiums forcing mortgage holders to default on payments (Bank of America).

Interestingly, some organizations have identified opportunities amid the chaos, as climate change can “bolster demand for their products.” With more people facing illness, Merck & Co. sees the potential for “expanded markets for products for tropical and weather-related diseases,” Apple predicts disasters will make its iPhone “even more vital to people’s lives,” and Home Depot expects higher air conditioner and ceiling fan sales.

Sustainable supply chains

No matter where your company falls on the threat-versus-opportunity spectrum, climate change is altering the global economy immensely, and supply chains must transform to survive. At this time of both challenge and potential, ASCM is collaborating with a network of world-class organizations — including The Bill & Melinda Gates Foundation, Accenture, Deloitte and PwC — to create opportunities for the kind of supply chain innovation that will be mandatory in the coming years.

In addition, our new SCOR-Enterprise (SCOR-E) designation features an ecological dimension, which focuses on the circular economy, climate strategy, energy, water and waste, material usage, and product life-cycle stewardship. SCOR-E is the industry’s first and only corporate supply chain designation.

I hope you will make the most of these valuable member benefits. ASCM mission-driven strategic initiatives such as these draw on the power of supply chains to address pressing global issues and achieve the brightest futures for individuals, companies and communities.

For more information, please visit the ASCI website and select ASCI Plus Membership which include your local and global membership with ASCM.