Supply chain management is all about how contingencies are handled among a group of diverse enterprises with common needs. The most common need is information.
That's the theme I'm working on for my October supply chain technology feature, anyway. But in talking to technology vendors about such ethereal stuff, it was almost quaint to hear one of them talking about equipment leasing. Isn't that more of a lift truck thing?
Not when the economy isn't doing very well and Christmas is around the corner. In that case, what's on a technology vendor's mind are ways to get more customers—and obviously keep them by serving them better. In that way, technology suppliers are becoming more like service providers. Bruce Stubbs, director of industry marketing for Intermec, told me his company's customers are leery about owning more bar code scanners than absolutely necessary.
“Some of these folks have been asking us if there is some way we can package solutions so they don't have to own the equipment,” he told me. “They would lease the hardware, software and services for a period of time and treat it as an operating expense vs a capital expenditure.”
Stubbs says his company is looking at developing that model further and is even helping justify the return on investment. The thinking goes, if a user is increasing their efficiencies and productivity, that turns into a daily ROI so why not track it that way for their company and spread it out over several months vs purchasing it and hoping for a payback in a year.
That kind of model is even more attractive to a lot of retailers gearing up for the holidays.
“If I typically need 30 devices to meet my demand throughout the year but at my peak season I need 50, why go out and buy 20 additional and have them sitting for the rest of the year?” Stubbs reasons. “How about owning those 30 then at my peak lease an additional 20 and after my six to eight week period I can shift them back to the vendor.”
He told me Intermec's also going to embrace rental. I just thought it was interesting to hear those creative financing terms being applied to the creative technology coming out of supply chain R&D. Let me know if you agree and want to see this applied to other supply chain technologies you're using or thinking of using.