Social media in the Supply Chain

One of the hot trends in supply chain these days is the use of social media. As this blog is called supply chain trend, I had to give this trend some thought. Without a lot of research and more or less from top of mind, here is my take on what social media can bring to supply chain. Let me know what you think.

Responsiveness: currently information closest to the customer and consumer is point of sales (POS) scan data. Social media can actually provide information beyond POS. Imagine a group of consumers that scan with their smart phone on shelf information in a couple of major stores on some hero sku’s and send this through twitter. They count sku availability on certain times during the day. In this way manufacturers can actually assess on shelf availability and see if a replenishment model, including in store replenishment, needs change.

New product development (NPD): social media can be used to integrate consumer insight and feedback in the development of products. There are examples of food companies that used social media to give their product a new name. It is possible to take this a step further and integrate feedback from a group of consumers through social media on new product ideas in the NPD stage gateway process.

Quality: Train a group of consumers on how they can detect right or wrong quality features of your product and let them provide feedback on a timely basis. In this way there is an ongoing feedback loop on your product in the market place. This can be done by country or worldwide and provides a continuous stream of quality feedback. It might have helped Toyota detect their problem in the market place earlier. Risk detection can be done in a similar way for early warning.

Tracking and Tracing: on top of GPS systems for location and technology to tag pallets and containers to read temperature or other product information, we can get qualitative information from the truck drivers through twitter on weather, road accessibility and the sign off on the proof of delivery. In this way we provide context to the usual transactional data or get notification of events that impact the movement of products.

Consumer satisfaction: get the customer or consumer to react directly after a feature of your service or product doesn’t satisfy them. The feedback might not be rationalized and thought through, but will be hot from the press and guaranteed to be open and honest.

Consumer’s needs insight: in some industries a small percentage of brand adorers consume 70% of a brand total volume. A company can select a group of brand adorers and let them tell the exact moment they purchased a product, what was their need for the product and information on price and location. Similar for a group from which the company knows are not brand adorers, but who do buy the product occasionally. This insight can tell a company how to make consumers adorers of their brand, while maintaining the adorers’ base and in this way create more demand.

Common language: maybe the biggest win in supply chain can be the common language used in social media. Traditionally sales, marketing and supply chain have difficulties understanding each others language and needs and it’s hard to come to consensus. Even when supported by S&OP processes. Gen Y and even more Gen Z, the “Net Generation”, are brought up with social media and might just cross the traditional functional boundaries with this new ‘social language’.

Once you start thinking about it, the possibilities are endless, of course dependent on the industry and type of supply chain. But many questions remain. How to get relevant information out of these big data streams? How do I react back if I get information on quality or a risk factor or another event? How do I control and protect sensitive information? Who should be part of this network of information? What software and hardware infrastructure do I need?

These questions need answers and technology solutions. Therefore expect some start-ups coming on the market with product that will provide supply chain and business services through social media. Some sources already talk about a bubble in social media, see http://www.youtube.com/watch?v=iWnVutNLfVE, and a good comparison with the IT bubble in1999 http://dealbook.nytimes.com/2011/03/27/is-it-a-new-tech-bubble-lets-see-if-it-pops/ . But whatever happens, innovation in this area will continue.

Widely used social media in the supply chain might be still science fiction, but one day it will be here to stay. Better be prepared.

4 thoughts on “Social media in the Supply Chain

  1. Niels,

    Great off the top of your head article. Effective use of Social Networking/Media to strengthen relationships with and insight to consumers can deliver value. Our company has invested heavily in the Social Supply Chain for the past 5 years but from a different perspective.

    Instead of taking a consumer perspective with all of the good ideas you’ve suggested, we have developed and delivered the technology that bridges the “old-school” enterprise software found in ERP’s to the Social Supply Chain. We do this without modifying, replacing or integrating those existing systems. By leaving these systems in place with full control of what they know and do today the cost, risk and disruption of change are mitigated. Because we don’t disrupt their “view” of the business they remain blissfully ignorant that the employees, vendors and customers who interact with their information are actually achieving greater value “outside” of their boundaries.

    The Social Supply Chain starts from the transactions of business: orders, inventory, resources, visibility, productivity, accuracy, etc. Currently controlled by ERP and Best of Breed systems, these transactions are constrained in the data, process and technology they use. We decouple those three elements so that the transactions can be made more efficient with higher quality and greater collaboration. No IT involvement is required and a dynamic team of subject matter experts can convene, design and deploy a “pop-up” IT solution in a matter of hours. The fall back systems are still in place and prototyping down to a single user can provide value measurement to assess if the strategy/approach meets corporate investment guidelines.

    After improving the transactional elements of business, our application takes direction from the group on how to leverage Social Media. As an example, now that BabbleWare has improved order fulfillment, a Sales Team for a Major Account can establish a Twitter/Facebook account to which the BabbleWare application will post customer related events: orders placed, released, picked, loaded and delivered are posted to the respective account to the detail required by the Team. Exceptions or errors can also be posted with appropriate # tags to help the Team track pertinent information. Employees of the customer can also be granted access to the account so that they can see whichever information the vendor would like to share.

    By enhancing the existing systems without disruption to accommodate social networking communication, customer value will increase and the effectiveness of your teams to be proactive will sky rocket. Taking this one step further, since the process, data and technology of the existing systems are decoupled from their death grip, innovative changes can be designed by a collaborative team. The entire administrative expense related to “ordering” can be minimized if not eliminated. The uncertainty of Forecasting can be mitigated as real time visibility replaces educated guesses.

    Now the ideas that you posted in this article can be tied into the Operation of a business and Supply Chain. Getting consumer input on product availability, location, quality, etc. all feed the engine of continous innovation. So thank you for your great ideas on how the Supply Chain can increasingly extract value from the consumers while at the same time delivering greater value to the consumer, the customer, employees and vendors.

  2. Thanks for your feedback Steve.

    It sounds very interesting what you’re doing at babbleware. I’m going to follow that for sure
    Pretty strong statement you’re making on the bableware website on current enterprise software
    I like that attitude!

    cheers,
    Niels

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