In early January, Toyota President Akio Toyoda announced at CES 2018 – Consumer Electronics Show, the world’s largest fair in the sector, the concept of the e-Palette: an electric and autonomous vehicle that can be used to transport passengers, carry out deliveries or even as a mobile point of sale, as a kind of “shop on wheels” . The company also suggested that the vehicle could be configured to function as a mobile hotel, or as a workstation (so that the time people spend in transit can be used productively), or even as a mobile medical clinic.
Video 1 – Promotion of the e-Palette at CES 2018
At the event, the company also announced the “e-Palette Alliance”, a partnership with the giant Amazon, with e-hailing Uber and Didi Chuxing (Chinese company now owner of 99 in Brazil), with Mazda and Pizza Hut for collaboration in vehicle development. During the presentation, the terms “mobility service” and “mobility commerce” were emphasized. Hence, there is no doubt about why Uber and Amazon are involved.
Figure 1 – Toyota e-Palette concept for Pizza Hut
For Pizza Hut, the goal is not to fall behind the competition. In 2017, the company introduced new delivery options in the United States, including the possibility of placing orders through devices such as the Alexa, and providing the ability to receive real-time order status updates via the app, website or text messages. Of the three largest American fast-food pizza chains, Pizza Hut is now the furthest behind in delivery. The company envisages that e-Palettes will be part of the delivery strategy in the future, and can even be adapted in mobile kitchens.
Figure 2 – Pizza delivery by autonomous vehicle in Black Mirror episode
If you like me follow the series Black Mirror, no doubt he thought of a specific scene from the new season when he caught his eye on the e-Palette with the Pizza Hut logo. Charlie Brooker's science fiction/thriller series explores in each episode the consequences of possible new technologies in an alternative future, often a future that seems far away. However, despite the fact that the e-Palette is still just a concept, the intention is that in 2020 the vehicles will be tested at the Tokyo Olympics and Paralympics.
The announcement made by Toyota reflects the intention of evolving from a company that manufactures cars to a company that provides mobility solutions, in order to transform the disruption brought by new technologies into gains instead of being knocked down by them. However, Toyota will hardly be the only one. In the last two years, most automakers have started to adapt their business models to become providers of mobility services in the near future, and this movement is clearly seen by the association of manufacturers with technology companies and start-ups, such as mapped by Magda Collado.
With autonomous vehicles, how much could it be possible to reduce transportation costs? Could reductions in the cost of delivery lead to less decentralized logistics networks? Or would service-level pressures impede this centralization? Would vehicles like Toyota's e-Palettes create a new sales channel? How would this new channel impact the companies' distribution strategy?
Although there are still a few years to go and many barriers to be overcome before autonomous vehicles become part of our daily lives, it is impossible not to stop and reflect on the possible impacts on the supply chain.
References:
Automotive Logistics – How autonomous vehicles will impact the supply chain. https://automotivelogistics.media/opinion/autonomous-vehicles-will-impact-supply-chain
Bloomberg – Toyota Signs Amazon, Pizza Hut as Driverless-Delivery Partners. https://www.bloomberg.com/news/articles/2018-01-08/toyota-taps-amazon-to-join-driverless-delivery-vehicle-alliance
Business Insider – Toyota and Pizza Hut are teaming up to make self-driving cars that could deliver pizza. http://www.businessinsider.com/toyota-pizza-hut-team-up-for-self-driving-pizza-delivery-2018-1
Fortune – Toyota Working With Amazon, Uber, and Pizza Hut to Develop Self-Driving Shuttle. http://fortune.com/2018/01/08/toyota-amazon-uber-pizza-hut-self-driving-shuttle/
Magda Collado – Alliances Between Automakers, Tech Companies and Mobility Start-ups, An Update. https://mcollado.kumu.io/the-race-towards-smart-mobilityv
Thatiana Nomi
5 years of experience in consulting projects in Logistics and Supply Chain. Worked on logistics network optimization projects, service cost, logistics master plan, inventory policy definition, sales forecast, S&OP (Sales and Operations Planning) and transportation planning and management.
