Using High Technology Drive Agenda Sharing Economy Lead Mechanical Design Engineer Bmw S S Q43889060
USING HIGH TECHNOLOGY TO DRIVE THE AGENDA FOR A SHARING ECONOMY.As lead mechanical design engineer for BMW’s sprawlingmanufacturing plant in Spartanburg, South Carolina, Ryan Lambertheads a team of nine engineers responsible for designing andprocuring custom jigs, fixtures and other tools for the assemblyline. Until recently, the task required spending a lot of time onthe phone and email, finding local machine shops with the abilityand capacity to execute his plans. That changed a few years agowhen Lambert began using Xometry, a Maryland firm that’s oftendescribed as “Uber for manufacturing.” Now, he uploads design specsto Xometry’s online platform, which then uses artificialintelligence and algorithms to instantly price jobs and selectivelybid them out to a network of some 2,500 pre-screened smallmachinists scattered around the country. “It allows me to hand overmy prints and know I can get the finished product on a set deadlineand at a set cost,” Lambert explains. “It makes me more efficient.”It’s a set-up in which each player gets something of value: BMWgets the tools it wants faster and cheaper; the machinists generateadditional revenues by getting the opportunity to use an otherwiseidle asset thereby creating more work capacity. Like Uber, theride-hailing platform, Xometry takes a percentage for bringing thetwo sides together. PROGRAMME BACHELOR OF COMMERCE IN INFORMATIONTECHNOLOGY MANAGEMENT MODULE INFORMATION TECHNOLOGY MANAGEMENT 2BTOTAL MARKS 20 MARKS “There’s a huge amount of potential capacityand capability in custom manufacturing that goes unused,” saysRandy Altschuler, privately held Xometry’s CEO. “This is aboutusing the sharing economy to make it easier to get things done.”BMW and Xometry are both players in a blossoming sharing economythat is transforming the way many industries conduct business. Onlya decade ago, sharing was viewed as an intriguing peer-to-peer ideathat wasn’t very relevant for established companies. Today, it’sthe latest rage—albeit more evolutionary than revolutionary—withpotentially far-reaching implications for how business gets done.“I’ll be very surprised if we’re still talking about the sharingeconomy five years from now— not because the activity will stop,but because it will simply be part of the way we do business,” saysUrvesh Shelat, a Berlin-based venture architect lead at BostonConsulting Group’s Digital Ventures and former ambassador to BCG’sHenderson Institute. Purists say true sharing occurs only when theplatform serves as an intermediary and doesn’t own the assets.Others take a broader approach that includes platforms owned bymanufacturers or their partners. As sharing spreads into thebusiness-to-consumer and business-to-business arenas, theunderlying trend is becoming clearer: a mindset shift fromownership to usage that, played right, can benefit end users, assetowners and the environment. (Sustainability, in the form of gettingmore out of existing assets, is part of sharing’s appeal.) “Peopledon’t care as much about ownership as they used to. They just wantto use things,” says Vibhanshu Abhishek, a professor of informationsystems at the University of California, Irvine, who studies thesharing economy. “That’s a fundamental shift in the marketplace.”At its core, the sharing economy is a technology play, employingdigital platforms to lower transaction costs and matchunder-utilized assets—be those room space, farm machinery, hospitalequipment, clothing or even talent—with paying users. “Thealgorithm is our most important employee,” says Sebastian Sorger,CEO of LoadFox, a subsidiary of Munich-based MAN Truck & Bus.LoadFox operates a platform that matches European freightforwarders with carriers that have extra space in their trucks.“Humans can’t combine loads as quickly and profitably as theplatform can,” he adds. Sharing works best with pricier assets thatare used often enough by some to justify ownership, but are neededonly occasionally by others who are willing to pay for short-termusage. In a market with frequent and infrequent uses, the modelgives manufacturers a way to serve users who would never considerpurchasing their products, and to sell more to owners who canmonetize their purchases. “[With sharing,] low-usage consumers endup renting instead of forgoing consumption,” says Abhishek. “It’s awin-win-win for the borrower, owner and manufacturer.” The downsideis that owning assets is capital-intensive. One key benefit ofsharing, says BCG’s Shelat, is the ability to change “capitalexpenditures into operating expenses,” which frees money for otherpurposes. In India, where according to BCG only about 15% offarmers can afford to buy tractors, Mumbai-based tractor makerMahindra & Mahindra runs a platform called Trringo, whichallows owners of Mahindra (and rivals’) equipment to share withfellow farmer-users by the hour. Arvind Kumar, formerly Trringo CEO(now with Force Motors), praised the company’s role in “drivingrural prosperity by empowering farmers,” and says it has helpedachieve several strategic objectives, including expanding thecompany’s customer base and reputation. “If you think you can’tsell heavy machinery, expensive electronics or high-end fashion ina market because the local population can’t afford it, then this isyour way in,” Shelat says.
Having read the above business case, answer all the questionswhich follow:
a. In the context of this Case Study, explain what is meant by“sharing”, hence explain further what a “Sharing Economy” is. (5Marks)
b. List at least five [5] benefits of a technology-enabledsharing economy as highlighted in the Case Study. (5 Marks)
c. Explain how a sharing economy can benefit the environment. (5Marks)
d. Explain what is meant by “more evolutionary thanrevolutionary” in the context of the Case Study. (3 Marks)
e. Under what circumstances does sharing work best? (2Marks)
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