Paul Bestford (left) and David Owen at the CIPS Annual Conference © Leo Wilkinson
Paul Bestford (left) and David Owen at the CIPS Annual Conference © Leo Wilkinson

Jaguar Land Rover planning for sharing economy

Will Green is news editor of Supply Management
20 October 2017

Jaguar Land Rover (JLR) is planning for a future in which traditional car ownership is replaced with “mobility solutions”.

David Owen, global purchasing director, production and aftermarket parts at JLR, said in a sharing economy consumers would select different vehicles, from potentially different manufacturers, to suit particular journeys.

Coupled with this trend is the shift to ACE vehicles – autonomous, connected and electric – and this would require more “coopertition” among firms.

Speaking at the CIPS Annual Conference in London, Owen said: “The driving force for coopertition is: ‘We don’t have the internal ability’.”

He gave the example of the charging infrastructure required for electric cars.

“[Coopertition] can help cut costs. Sometimes the investment is more than one automaker can stand. Recognise you can be better together.”

Owen said relationships were the cornerstone of a successful partnership and he advised buyers to enter into such arrangements with “eyes open” and to “understand motivation”.

“Be more open-minded than ever,” he said. “There is not a one-size fits all.”

During a panel discussion of alternative delivery models, Paul Bestford, CPO at the John Lewis Partnership (JLP), said the company spent as much on indirects as it did on salaries for staff, known as partners at JLP. He said 60% of indirect spend went on services such as delivery drivers, management consultants and design agencies.

Speaking about the gig economy, Bestford said there was a “clear issue” around “this decision we have to take about whether that is a good or service we will buy in from the market or whether we can provide a role for a partner”.

He said JLP operated in an “intensely competitive environment” where lowering labour costs was important.

Bestford said in the future the gig economy might be the norm. “Will we all be working as freelancers for a number of different organisations?” he said. “Will we all be working in the gig economy?”

Concerning automation he said: “With the impact of Brexit I think our issue will be the supply of low-skilled labour and that will push wage rates up and that will push investment in automation, which will eliminate many of those jobs.”

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