Crowdsourcing has shaken up business processes this year. But how can socializing the supply chain help your organization gain competitive advantage?
In the past, organizations invested heavily in technology to improve process efficiency. This involved implementing traditional ERP platforms that allowed end-to-end visibility of the supply chain. However, new technology is changing the way businesses approach supply chain problems and traditional technologies alone are no longer enough to remain competitive.
Although these ERP systems offer significant useful insight into supply chains, these systems do not evaluate the impact of risk. As a result, when problems occur, they have to be resolved using insufficient retrospective data. Moreover, failing to evaluate risk can leave the business exposed to higher costs and firefighting which could compromise service levels. Savings made though creating efficient processes can often be negated by the cost of finding solutions to unforeseen emergencies.
On the other hand, crowd sourcing offers CEO’s a proactive real-time approach to supply chain management. This solution presents a potential treasure trove of influence and insight to a company’s ever changing environment. For example, there are an increasing number of social media tools, mobile and location services that make it easy for people to broadcast where they are and what they are doing. This means a plethora of real time information is constantly available. Data can include everything from pinpointing road closures to highlighting which products are out of stock.
Real time data could prove to be a valuable aid alongside planning and forecasting technologies. For example, during times of disaster or extreme weather, crowdsourcing could provide critical information necessary for maintaining operations. Managers can then proactively plan ahead and begin to anticipate problems before they arise. This enables businesses to react instantly by putting in place strategies which confront supply chain challenges head on
In my opinion, crowdsourcing will become a key enabler for agile response and process handling. Firms must begin to establish listening posts on various communication channels to capture critical conversations that can drive decisions within the supply chain. Organizations must then filter these messages to identify those with the most relevance. Such information is not only enlightening for operations management; it can be equally as essential for making longer term decisions.
To gain these strategic advantages, businesses require forecasting systems that provide accurate statistical information based on historic sales and dynamic parameters which learn continuously. Data assimilated through crowdsourcing can then be utilized for both supporting and verifying suggestions given by forecasting systems. This in turn will enable supply chain managers to improve the flexibility of the supply chain by keeping current and future planning parameters up to date. More reliable information should increase availability, improve optimization of stock levels and allow you to confidently make the most appropriate planning decisions.
I strongly believe now is the time businesses should become more “social” in their approach to supply chain management. Those organizations that effectively layer crowdsourcing over forecasting and planning solutions will drive competitive advantage through making better informed decisions.
Are there any examples in the UK, USA, or otherwise, where companies are crowdsourcing their suppliers? Any in the high tech industries?
Great question. One MNC that has really embraced the idea of crowdsourcing is Unilever. Starting on page 13 of the following PDF Link, Unilever’s thoughts and plans for crowdsourcing the supply chain are discussed:
The paper also mentions Sourcemap as the first open source supply chain network.
A big company with its name tied to Sourcemap is Office Depot.
The concept of crowd-sourcing suppliers is still in its infancy with few firms fully embracing this social approach to procurement. However, Aachen based Street Scooter GmbH is a great example of how crowd-sourcing can be applied throughout the entire business with impressive results. During the development of their innovative electric car, Street Scooter completely revolutionized the roll of their suppliers. Perhaps this is a hint at how the future supply chain will look…
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