Executive Briefings

Opinion: Uber Your Supply Chain

The sharing economy, aka Uberization, may be the biggest disruptor to supply chain strategic thinking since lean. Surprisingly, it still ranks last among our Future of Supply Chain survey respondents as a "disruptive and important technology." I suspect this will change soon.

I had a chance to speak last week with Neil Ackerman, formerly of Amazon and now in charge of e-commerce initiatives for Mondelēz. Ackerman is an advisor to a company called Flexe, which makes a market of spare warehouse space for companies looking for storage capacity but not wanting to build or hold the typical long-term lease. The company is still private but is apparently growing fast with 25 million square feet of space available and reported plans to add 10 million more this year.

The pitch to supply chain executives, especially for smaller companies looking to offer decent e-commerce capabilities, is exactly like that of Airbnb — why not share an otherwise empty room? With Airbnb, this could be a great little apartment in the center of Ibiza’s old town. For Flexe, it’s a few thousand square feet of warehouse right inside your fastest growing new market. Cheaper, easier and more customizable than booking with a hotel. Plus, it’s readily available and very personal.

Just like Uber, the basic idea boils down to using a software platform to facilitate reliable supply-demand matching at transaction sizes too small to justify the attention of traditional providers. The resulting market-making mechanism thereby taps a gigantic pool of unused capacity. Uber does it with cars; Airbnb with rooms; Convoy (and many others) with trucks; Instacart with direct-to-consumer groceries; and now Flexe with warehouses.

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I had a chance to speak last week with Neil Ackerman, formerly of Amazon and now in charge of e-commerce initiatives for Mondelēz. Ackerman is an advisor to a company called Flexe, which makes a market of spare warehouse space for companies looking for storage capacity but not wanting to build or hold the typical long-term lease. The company is still private but is apparently growing fast with 25 million square feet of space available and reported plans to add 10 million more this year.

The pitch to supply chain executives, especially for smaller companies looking to offer decent e-commerce capabilities, is exactly like that of Airbnb — why not share an otherwise empty room? With Airbnb, this could be a great little apartment in the center of Ibiza’s old town. For Flexe, it’s a few thousand square feet of warehouse right inside your fastest growing new market. Cheaper, easier and more customizable than booking with a hotel. Plus, it’s readily available and very personal.

Just like Uber, the basic idea boils down to using a software platform to facilitate reliable supply-demand matching at transaction sizes too small to justify the attention of traditional providers. The resulting market-making mechanism thereby taps a gigantic pool of unused capacity. Uber does it with cars; Airbnb with rooms; Convoy (and many others) with trucks; Instacart with direct-to-consumer groceries; and now Flexe with warehouses.

Read Full Article