Learning to Share
- October 8, 2019
Sharing is a lesson all parents teach their children and as children grow, some are better than others at learning and benefitting from the concept. The same can happen in business. It’s called the sharing economy and some small to medium sized enterprises who are looking at innovative ways to shave costs within their organizations are beginning to embrace the concept as a new business model.
The concept is built on the idea that sharing of some goods, services and skills is more efficient and can help people and businesses reduce costs. It also happens to be one of the fastest growing business trends in recent years with investors pouring more than $23 billion in North America in venture capital funding since 2010, according to Boston Consulting Group (BCG).
Readers may more readily associate the sharing economy with consumer-based services, such as the sharing of rides, homes and clothing, but the concept holds benefits for SMEs too.
Perhaps the most compelling reason is that sharing makes economic sense for SMEs operating in increasingly competitive markets. BCG cites an example of an automotive division of a company in India called Mahindra & Mahindra that saw an opening for a sharing business. According to BCG, only about 13 per cent of the country’s 120 million farmers use mechanical equipment because the rest can’t afford the cost of ownership and existing rental arrangements can be inefficient and complex. The company created a sharing platform which allowed farms to rent equipment made by Mahindra or even by its competitors. The sharing platform called Trringo has provided Mahindra with a way to increase its customer base and build brand awareness and, according to CEO Arvind Kumar, it has played a “pivotal role in driving rural prosperity by empowering farmers,” notes BCG in an online article.
SMEs could benefit from many sharing services such as shared workspaces, storage, delivery and logistics platforms.
SMEs in manufacturing could take this concept even further. For example, businesses could turn idle downtime into profitable opportunities by renting out time on their machines for manufacturers who may not have the same processes and only need occasional use of a particular machine tool or process. And on the flip side, manufacturers would have access to innovative processes they may not otherwise be able to afford as well as access to a new pool of skilled workers.
The Canadian Tooling and Machining Association (CTMA) recently launched a portal that addresses this.
The current economic uncertainty in North America and abroad is likely to present ongoing challenges for manufacturers. Exploring new approaches to operating more cost effectively only makes sense in such a climate. SMT