The platform economy is gaining ground, also in logistics. What is the impact of this on our supply chain? Do those platforms offer opportunities or especially threats? Shippers' organisation evofenedex organised an SCM Summit to answer the questions. One of the speakers was Cor Molenaar. "And what are we doing in Europe? Nothing at all to increase our competitiveness."
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"Selling products and services is a finite path. Today it's all about helping customers buy," Cor Molenaar argues. That is exactly what online platforms are good at - helping customers buy. They do nothing but bring supply and demand together. Platforms provide the transparency that allows customers to buy anything online whenever and wherever they want. "All they do is link. And with that, they turn profits of six billion," the professor of e-marketing at Erasmus University Rotterdam told the SCM Summit, organised by shippers' organisation evofenedex.
Molenaar is author of a recently published book on doing business in the platform economy. "The end of competition?" is the title. He likes to throw caution to the wind. "Take a platform like bol.com, which offers other companies a platform to sell their products. The only data bol.com shares with those companies is transaction data. All other data they keep for themselves," said Molenaar, who sees such platforms growing bigger and bigger. "In every market, there is room for only one big platform. The competitive power is in those platforms."
Virtual stock exchange
The fact that these platforms are all about data has now got through to the US government. This week, it announced it would investigate the distortion of competition caused by platforms such as Amazon, Facebook and Google. "This is about data, about data sharing and especially about using data for one's own benefit. And what do we do in Europe? Nothing. We do nothing to increase competitiveness in our market. Yes, occasionally the EU hands out and fine. And again next year. Amsterdam would prefer to ban Airbnb. But with banning you don't create progress."
Platforms are also gaining importance in the supply chain. According to Molenaar, they are causing traditional supply chains to turn upside down. Producers can now skip entire links and sell directly to consumers. "The value creation happens on the platform, not in the traditional linear supply chain. That's where it's all about operational excellence. For example, why should we all still have our own inventory. It's about being able to deliver at the right time, not about doing so from our own stock," states Molenaar, who talks about a 'virtual stock exchange'.
'Excuses for doing nothing'
Molenaar calls on companies to act now. "We are only at the beginning. Those who do nothing are really lost. Yes but, I hear companies say, all those platforms don't make a profit yet. All excuses for doing nothing. Just like the excuse of waiting for the Brexit first. Those who can see one or two years ahead can come up with measures now. You have to take action yourself. From the government you do not have to expect any help."
Erik van Dort, supply chain consultant at Capgemini, referred to Richard Branson in his presentation after Molenaar's. This British entrepreneur, owner of many record shops, announced back in the year 2000 that he would enter the battle with Amazon. Branson lost that battle. "Many retailers have hesitated for a long time to get started with an online channel. Their fear is that setting up a new channel will cannibalise the old channel. But what did Branson say? If someone is going to cannibalise my existing business, I better do it myself."
Expected time of arrival
In many supply chains, Van Dort sees opportunities for improving performance. Digital technologies, including platforms, can contribute to this. "The pursuit of visibility could be called a first step towards a digital supply chain. But what does a customer get to see when he wants to track his parcel? That his order has been picked or that his parcel has arrived at the sorting centre. But that customer doesn't want to know that. All he wants to know is the expected arrival time of his parcel."
Many new initiatives are emerging in the market that promise all kinds of things. Van Dort warns that companies should not be seduced by all the pretty stories. "Ask again and again what these parties actually have to offer. What can they really do? What problem do they solve? What do they do better than existing parties?"
Liability
Another warning comes from Wouter Verheijen of the Erasmus School of Law. Because what laws and regulations apply if transport - established through a platform like Uber Freight, Transporeon or Cogoport - leads to problems. "Transport law only talks about a carrier and a forwarder, not about a platform. For many platforms, this is the argument for rejecting any liability. Therefore, look carefully at the commitment you enter into with a platform. Does the platform undertake to carry out the transport? Or does the commitment only consist of them passing information correctly through the platform?"
Significant is the conclusion of a participant during the discussion at the end of the SCM Summit. He asked the platforms present what they do when something goes wrong with a shipment. The platforms pointed out that all the transparency allows users to see early on when something goes wrong, so they can take proactive action. "So then I still have to take action myself? Now that's a shame."
