You probably got in your car this morning to get to work and depending on where you live, it may have been a horrendous experience. That is about to change in a big way because the entire “driving a car” paradigm is about to get disrupted big time. And it is fascinating to watch how a well-entrenched auto industry is fighting this existential threat instead of embracing it. Google’s self-driving car (already legally on the road) is going to change the ownership model to a service model. You need to get to work – a “car” (more on that later) shows up and gets you to work-that’s it. You don’t need to own a car, drive a car, maintain a car – and that is scaring the %^$# out of the auto industry. And that explains why Google’s attempt at collaborating with Detroit has fizzled.
Detroit looks at the disruption and knows that it will relegate them to being nothing but hardware providers to a transportation service company that uses software to move people and therefore has decided not to collaborate with Google. As a result, Google is looking at non-traditional Detroit options like Tesla or bypassing Detroit altogether and going to their major suppliers like Continental. We could see a scenario where Detroit’s supply chain could eliminate their customers from the entire business model!!
Driverless cars also mean that the cost ($871 billion-33,000 deaths) of humans driving cars will go away so it’s not just a convenience issue and that has many people even more excited. This is, of course, not the only implication and here are a few more from Dan McLaughlin’s article,17 Ways Driverless Cars Could Change America:
- “Car” design: no driver needed so “car” could be a sofa on wheels
- Roads and traffic patterns
- Who can “drive”: kids, elderly, handicapped
- Auto Insurance industry
- Car culture
- Extending telecommuting: you will be working while sitting on that sofa and moving from one place to another
- No more taxi/truck drivers needed
- No more privacy: where you go and when is recorded
- Disrupting law enforcement
- Risk of “hacking”: already an issue
These are just some of the implications – can you think of others? Take a few minutes and force yourself to imagine driverless cars and what impact it may have on your life.
And as you think about it from a personal angle, don’t forget to think about the impact on your business – it may be significant! Keeping tabs on Innovation is a critical issue and one that Sourcing and Supply Chain must play a critical role in. Mining innovation in your supply chain is a major Value Driver for your stakeholders and it allows you to play a much more strategic business partner role and not just be a paper pusher. This is an issue that many Sourcing/Supply Chain organizations don’t pay a lot of attention to even though it has a significant impact. If your competitors are much better at finding and deploying innovation from the same supply base, you have just cost significant value loss for your corporation. And if Google is successful in collaborating with Detroit’s suppliers, it may even be an existential threat.