Each night after dinner I find myself scrolling through Netflix. What’s new? What haven’t I seen yet? How many other people are doing the same thing? More than doubling their 7.2 million subscribers in the first quarter this year, this is one company that has benefited from families stuck at home.
Convenience plays a role. Monthly subscription service companies continually flood our lives. Personally, I pay for Netflix, Spotify, and membership to the YMCA each month. No checks to write. No cash to dish out. I trust them to access my account, pull out what they need, and call it good until next month.
I’ve often wondered, could this work in the B2B world? That would certainly free up time for buyers and sourcing professionals. Software, like Adobe Creative Cloud, is a yearly subscription. No more disks to buy! A new version is released each year with all their upgrades and users download the latest version.
Overall, consumers are getting used to subscription-based models and manufacturers need to get on board or be left behind.
How could B2B subscription services work in manufacturing?
A set price. If it’s an item used throughout the year, have the vendor price it based on yearly usage. That’ll result in less time going back and forth to get a quote every time an order is placed.
Automated inventory replenishment. Scan tagged bin internally or by the vendor to restock parts that are out of inventory. Minimums and maximums are agreed on and set in advance. You never have too many or too few!
Monthly shipments. Divide yearly usage by 12 and get equal shipments that show up each month.
Dedicated customer representatives are vital to implement and monitor these strategies. With open communication, any or all of the services will work.
A jarring statistic was revealed during a recent webinar: Half of the world’s largest companies will disappear by 2027. The average lifespan of S&P 500 Company in 2027 is 12 years.
That really puts things in perspective! There’s no going back to 1964 when the lifespan was 33 years.
As society changes, so must business.
