Every supply chain manager is also an individual consumer, and there can be no doubt that the innovations in one market often alter the demand, offerings and consumer expectations of the other. Despite the fact that we have different priorities and perspectives on our personal spend than we do corporate spend, the rate of idea exchange between the two markets seems to be speeding up, ultimately bringing business and consumer supply chain and logistics closer together.
We’re all familiar with Uber as the upstart ridesharing service that has disrupted traditional taxi markets worldwide. In 2017, Uber entered the freight market, applying their ride sharing optimization technology to demand for truckload services. They provide quick, easy identification of suitable capacity and facilitate constant, real time tracking during the journey. It is flexible and cost effective due to Uber’s market driven pricing. This also makes the service ideal for small or medium-sized businesses who don’t have the leverage to negotiate competitive small parcel contracts but want to expand their customer base nationally.
Uber isn’t the only service available to meet this need. Convoy (which includes Jeff Bezos and Bill Gates among its financial backers) and Transfix both facilitate the matching of shippers with capacity. One of their advantages, again borrowing from their consumer business model, is quick driver payment. Rather than waiting a business-standard 30-90 days for payment, Uber Freight drivers receive payment within 7 days.
Last Mile Mastery
The final mile of consumer delivery is not only the most complex leg of transit, it can also be the most costly for carriers. Fewer and fewer households have someone at home to receive and/or sign for packages, requiring multiple delivery attempts. In an act of simultaneous customer service and self-preservation, for example, UPS and FedEx have both created services that provide consumers with B2B-like visibility and control over their packages and deliveries. FedEx Delivery Manager and UPS My Choice allow recipients to have the carrier, hold, redirect, and reschedule deliveries. In fact, once you have an account set up, it is not uncommon to be notified by the carrier that a delivery is expected even before the retailer associated with the shipment.
Both business and consumer delivery recipients have expressed the need for real-time information, not to mention the ability to affect how, when and where the delivery is made. While businesses are less concerned with making sure someone is available to receive the delivery, they are quite concerned with knowing exactly when a delivery will arrive. Consumers want as many options as possible to protect their goods. Carriers have to have the same set of information to meet the needs of both groups, making it possible to innovate across the board based on the same investment.
You have to give Amazon credit for its self-interested creativity. Dash buttons made a splash when they were introduced in 2015 (fun fact: many people thought they were an April fool’s joke because they were launched on March 31st). They are portable and make it possible to for consumers to place targeted just-in-time orders for specific consumer products. They are successful because (a.) they are cool, (b.) they cost Amazon almost nothing, and (c.) they eliminate all purchase friction except delay – and usually that is contained to 2 business days for Amazon Prime customers.
Amazon Business (which dates back to Amazon’s acquisition of SmallParts.com in 2005) combines the consumer convenience of Amazon Prime with corporate requirements for visibility, auditability, and cost-effectiveness. It provides a catch all for small purchases (not unlike p-card programs) and offers purchasers the convenience of staying put to place orders while procurement remains confident about where the money is going. By leveraging the same reputation for frictionless buying at a competitive price point as they depend upon with consumers, Amazon Business is disrupting many traditional eProcurement platforms and approaches to small dollar MRO spend.
The Convergence of Consumer and Commercial Supply Chains
From convenience to delivery turnaround to order visibility to user experience expectations, the consumer and commercial buying markets are evolving forward and moving closer together at the same time. Both are equally sophisticated in their own way, and are eager for new ways to easily get the things they want and need. When an investment is required on the B2B side, companies should explore whether there is any application for that new capability in the B2C market – and vice versa. The target consumer is the same in both cases, despite the fact that they are sitting in a different place and making different purchases. The opportunity to simultaneously increase ROI and expand brand recognition is just too appealing for any company to ignore.
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