Over the past few years the social trend has spilled over into the business world. Social sites such as LinkedIN and Xing (Germany) are providing business professionals with the opportunity to network without having to leave the office. LinkedIN now boasts over 175 million users looking to trade contact information, land a job, or discuss pertinent business issues, all from the comfort of their desk. What does this have to do with the supply chain you might ask? Supply chains and B2B relations are not immune to the social trend. The following presents 3 ways in which the social movement is revolutionizing the supply chain.
1. Strengthening supplier relations
Large, complex supply chains are difficult to regulate and big companies can easily lose touch with their suppliers. Walmart, for example, was completely unaware it was working with the clothing supplier in Bangladesh that caught fire, resulting in the deaths of over 100 factory workers. The company recently promised to fund supplier training in the coming months in order to improve supply chain standards.
Given all of the social platforms available, Walmart and other similar companies, could set-up training sessions online using Google+ and other similar tools. Companies can now create a supplier community in which problems are reported, solutions are exchanged and networks are grown. An excellent practical example is the social initiative undertaken by Lockheed Martin. The company recently announced the launch of “Supplier Wire.” The social website provides suppliers with important educational material, video tips and supplier testimonials. There is also a live chat function available to encourage direct contact with even its smallest supplier.
2. Creating transparency
Social platforms are beginning to create more transparent supply chains. Whether a company is searching for a new supplier or a curious consumer is attempting to find out the source of a particular product, Sourcemap appears to be the go-to social platform. Sourcemap was a project that started in the MIT Lab in 2007 and launched as a company in 2011. The social platform consists of published maps which provide information as to where the various parts of a product come from. That makes Sourcemap a valuable tool for all supply chain stakeholders as the network allows people to get into contact with key players along the entire supply chain. This open source supply chain network also provides information about the sustainability of supply chains. Sourcemap appears to be an innovative way to keep up with dynamic supply chain information for both consumers and businesses.
3. Enhancing internal processes and communication
In order for a supply chain to run smoothly, several parties must work in harmony. If there is an interruption at any point of the chain, major setbacks can be expected. With the rise of multinational companies, it becomes increasingly important for offices and factories overseas to remain in contact to ensure proper internal coordination of supply chain processes. This is where social tools can come into play. Social media encourages collaboration and allows people to come together to discuss problems and collectively find a solution. Knowledge sharing, for example, is an excellent byproduct of social platforms and could prove helpful in solving supply chain issues. Real time communication through these platforms can also speed-up decision making processes and enhance supply chain effectiveness. According to research conducted by the Aberdeen Group, the theoretical advantages discussed previously are brought to light. For example, businesses engaged on various social platforms delivered goods to customers on time 94.3% of the time compared to 92.2% for those who do not participate. Additionally, out-of stock rates were reported at 3.4% for companies engaged in social networks compared to 7.2% for non-socially engaged companies.
So where will the social supply chain be heading in the future? Only time will tell. What are your thoughts regarding the integration of social platforms into supply chain operations? Have you noticed any other trends?