When the Gates foundation decides to attack a problem, you know it’s a serious problem with significant impact and they are going to commit some serious resources. They are currently predicting an unparalleled improvement in the lives of the poorest and one of the key enablers of that is mobile banking . While we still carry cash/credit cards, Africa, Asia and others have already been using mobile banking. Apple pay was recently introduced in the advanced countries and continues to struggle while 2/3 of Kenya is already using mobile banking – a phenomenon called “leapfrogging” -large parts of the world will never know credit cards or physical banks and are going directly to mobile banking.
Safaricom (the leading telecom in Kenya) derives 18% of their revenue from banking (more than SMS/data combined) thus developing a new business model for telecoms. They have human ATMs (81,000) or agents who act as local “banks”(what the Knights Templars used to do)-thus leading to more ATMs/capita there than in the US!! This also makes banking available where there is no electricity yet and phones are solar powered.
According to the Gates foundation, 2 billion people will have access to banking services which will fundamentally change their lives. While only 10% of Tanzania have bank accounts, 67% have mobile phones resulting in the “leapfrog” effect. While this clearly has an impact on the cost of banking services and access to micro loans and employment for the human ATMs, it also fundamentally changes social behaviors. Savings may have been an alien concept when your wealth was stored in goods (cattle) or currency was hidden under the mattress but not anymore. This allows them to deal with normal life downturns (bad crops), health emergencies, education etc. on their own with their savings and stay away from the predatory money lenders or indentured servitude to pay off loans. Generations of a family have suffered because of loans that keep increasing the principal as bad crops continue.
Bill Gates also theorizes that a number of innovations coming from these 3rd world initiatives will actually “trickle up” to consumers in the advanced countries and may threaten the banking industry at some time. This will also open up these geographies as potential markets because there is a reliable payment system in place.
This is but another lesson that innovation provides little value unless it’s adopted. And while the phones being used in these countries are very basic with b/w screens etc., their huge adoption rate makes the realized value of the innovation humongous. The lower adoption rate in the advanced countries makes the realized value significantly less. Looking for innovation in all the expected places(advanced countries) may actually make us miss a lot of innovation taking place in the 3rd world.
Did you like this? Share it:
Are you one of those people that never RSVPs? Even when it can be as easy as the click of a button these days? Have you ever thought about the potential consequences of not sending in a reply, particularly if you do show up? A recent article in the Wall Street Journal entitled : “Nobody RSVPs Anymore” illustrated some very dramatic examples of the problems bad manners can yield. For me this article was very timely because it came out two days before I hosted a holiday open house where less than 50% of the people responded. My husband thought I was crazy when I insisted that we have enough food and drink for twice the number of respondents BUT I was right and he was wrong (not the first time ). Sure enough almost all the invitees showed up even though most of them did not respond.
Now, you may be wondering what this has to do with Supply Chain – EVERYTHING. Demand planning is a critical element in a Supply Chain and knowing how many people will need to be “supplied” with food and drink is critical information for the supplier (me). Inaccurate information or none at all can result in way too much inventory (perishable food in this case) or not enough inventory (my WORST nightmare). In my scenario, I had a risk mitigation plan in place (bought more food) because I felt having too much food was less costly to me than running out (resulting in dissatisfied guests – especially those that were kind enough to reply). In the case of a hosted, home party, it does not cost the invitee anything whether they RSVP or not (other than perhaps being taken off the list for future events). But, when you think about a buyer / supplier relationship the risk associated with No RSVP (demand planning) will be transferred to the buyer through a higher price. Those are real consequences and can add up to real dollars.
In general, many organizations do a poor job in demand planning or if they do it, it is not always shared with the supplier. Why not? If, as a supply chain organization we can make it easier for the supplier to serve us, why don’t we do it? In the article noted above, many people do not RSVP because they want to maintain maximum flexibility. In other words they want to be able to “decide that morning if they want to go out that night” – as a hostess that is maddening. As a supplier, those buying organizations that provide the courtesy of a reply (demand forecasts) will reap the benefits. I am also a supplier (beyond hosting parties) and my consulting clients that can provide me with predictable demand can expect my best resources and best pricing. The greater the commitment, the stronger the relationship, which has even greater benefits.
If you believe that not providing your suppliers with demand forecasts when you can is a good strategy think again; particularly if you are buying goods or services that are critical to your business. If you have ever played the Beer Game you will remember that the most valuable asset up and down the supply chain is information. Keep in mind that your suppliers may also have suppliers that they rely upon to provide you goods and services – your demand information will be critical for them as well.
The next time you receive an invitation, think about the “supply chain” implications and just RSVP. The same goes for your supplier relationships, the favor of a reply can pay huge dividends in more ways than one.
Join in the conversation and let us know what you think . . . . . . .
Did you like this? Share it:
I’m sure you’ve been enjoying the lower gas prices. Where the credit card would max out at $100 without filling my tank, it now costs around $60 for a tankful! However, there are many un-intended consequences to this windfall. This is a huge economic impact in less than a year – annually in the US alone, it means $14 Billion in the consumers pocket. While that sounds like a great economic boon, if consumers use that money to pay down debt and not use it towards consumption, it can actually cause dis-inflation or deflation.
Transportation tax revenues which are a % of the price of gas have taken a huge toll and government transportation budgets will suffer. Economies which are totally dependent on oil revenues are in turmoil which could lead to significant social and political upheaval (Russia, Latin America etc.). Sales of SUVs (higher) and energy efficient cars (lower) have already seen a shift. Other economic sectors are already feeling the impact (steel industry announced layoffs) because of lower demand for exploration. Fracking for natural gas is becoming less and less attractive economically as an alternative. The Keystone pipeline is facing the same issue as it is no longer commercially viable.
The one thing I’ve never understood is how prices can vary so much at different gas stations. I was just passing a major intersection with 3 gas stations at the corners (Shell, BP and Mobil) and one of them was 10¢ higher than the lowest and the other was 20¢ higher – at the same intersection! Surprisingly, there were more customers in the two highest priced gas stations, a phenomena that defies all logic. You would think people would drive across the street for a $4 difference per tank? What would you do – especially since all three are brand names?
Shankar Vedantam recently had a story on NPR where he points out that 9,000 more people will die due to the lower gas prices based on a recent study. There are the obvious factors that people drive more and therefore more accidents cause more deaths. Interestingly, it’s also tied to how we drive, as people tend to drive more conservatively (therefore more safely) when gas prices are higher. The composition of who is driving also changes. When prices are higher, younger drivers drive less as they cannot afford as much gas and the inverse is true. And younger drivers are far more risky on the road than older drivers. More truck traffic because of lower gas prices is surely another contributor. By the way, the people who tend to drive less in times of higher gas prices are the poorer people so the increase in the number of road fatalities due to higher gas prices impacts them the most.
Have the lower gas prices impacted your personal behavior? I’m assuming that you are reviewing all your supplier contracts where fuel costs are significant cost drivers and looking for relief – just like you had to agree to surcharges when they were high. Of course, we are all waiting for airlines to slash ticket prices immediately (don’t hold your breath). Are you starting to see any impact on your “order book” at all? Clearly, lower gas prices have both micro and macro impacts but they are a mixed bag. Such a large transfer of wealth from the producers of oil to the consumers of oil has many un-intended consequences.
Did you like this? Share it:
A Little Christmas Humor:
Did you like this? Share it: