The Revolution has Begun - Supply Chains and Social Media
by Inez Blackburn, President, Market Techniques and Innovation
In 2007 I wrote an article that defined what I believed is a “Best in Class” supply chain. While we have made progress with the deployment of new technologies and processes, there is still a long way to go. Consumers continue to evolve and will become more demanding. Technologies and processes across the supply will feel the pressure to adapt to these new demands as smartphone’s become the shopping weapon of choice. Why then, do companies continue to resist rather than embrace the new world order of social media and the future of supply chains?
“The best supply chains are not just fast and cost-effective. They must be designed in a way that effectively leverages technology to allow full visibility. Knowledge is most potent when it is shared in an environment that promotes collaboration. If you want a supply chain that is agile responsive and adaptable, make sure that all your processes are anchored to a positive customer experience. Too often companies limit their view of their supply chain and in doing so define their customer experience.
If you want to create a demand driven supply chain you need to give equal credence to the continuous flow of information. Collaboration cooperation and transparency will happen if you have full access to information that results in one version of the truth.”
White paper commissioned by Compliance Networks - Author, Inez Blackburn 2007
When I think about social media, I think about Facebook, YouTube, Instagram, LinkedIn, and Twitter because these social media platforms tend to be the most popular and dare, I say the most invasive in our lives. Social media is a platform designed to encourage communication and collaboration across communities of interest. Sharing information on these platforms is expected and encouraged because who doesn’t want to get thousands of “likes” about their style of clothing, recipes or words of encouragement or inspiration.
Not long ago in the late 1990's, I was working at the University of Toronto analyzing” Point of Sale” data and building predictive models to forecast consumer demand. The internet was starting to gain momentum, and even though we had access, external websites were limited due to a demonstrated fear of employees surfing the web rather than working. This belief existed in an era of dial-ups and slow internet speed where companies embraced the new world order with fear and trepidation.
The next five years paved the way towards the “Internet of Things” as we found ourselves in a tsunami of dot-com initiatives. It was considered trendy to attach the “e-” prefix to every business process, and any company with a “.com” in its name was poised for greatness and ridiculous valuations. History has taught us that what goes up must come down and the dot-com bubble eventually burst. But not without a significant impact as the “.com” bubble effectively transformed how people and companies worked. “E-business” returned to its’ roots and became “business” again. This transformation paved the today towards Social Media as we know it today and the quantum of opportunity that it creates.
To understand the opportunity for Social Media and the Supply Chain, we must first understand how and why social media was created and evolved.
What is social media?
According to Oxford Dictionaries
Social Media: Websites and applications that enable users to create and share content or to participate in social networking.
What is social networking?
Social networking: The use of websites and other internet services to communicate with other people and make friends in tandem with the activity of sharing
When you think about it, is social media new or a natural evolution of communication. While we all agree that social media has evolved online, become faster and more sophisticated do we understand and embrace its’ potential. Being social has become faster more reliable and complicated, but is it really different? Are Facebook, YouTube, Twitter, LinkedIn, and Instagram merely the evolution of traditional media or something so disruptive that it is changing our beliefs and behaviors.
Let’s look at the history of social media for the answer.
Human beings are hard-wired to be social creatures that thrive on and crave social interactions to emerge as healthy and happy humans. Social media is a master in tapping into these primal needs, so it is no surprise that social media platforms and apps are so popular today. Many social media platforms Facebook, YouTube, Instagram, and Snapchat, have a significant impact on our brains. Research on how social media impacts our ability to think and focus and the effect and influence on our brains is increasing geometrically. Heavy users of social media crave validation and constant feedback. So, it is no surprise that social media platforms often get a bad reputation. Unfortunately for humanity the continuous interruptions that texting and social media platforms can influence our ability to focus and critical thinking. How then can we leverage Social Media and Social Networking to our benefit?
We have come to accept that social networking sites such as Facebook, Twitter, Instagram, and Tinder define a modern society that thrives on constant communication and connection. Social media enables those who embrace it, a sense of belonging and defines an ever-evolving way of being and interacting in society. Most will agree on the many positive benefits of social media, personally and professionally as numerous social media platforms have crossed the chasm from consumer to business models. Machine learning in tandem with AI (Artificial Intelligence) has created opportunities to leverage the power of social media for marketing to understand and influence shoppers.
Unfortunately, despite the numerous benefits, and opportunities, the abuse, and manipulation of social media by Cambridge Analytica have put social media on notice. The Cambridge Analytica scandal lit the fuse for further scrutiny about the role and impact of social media and social networking sites in society. How do we differentiate between social media as a platform for communication and collaboration and a social network platform that leverages the power of machine learning and AI to influence and manipulate society and how do we protect users from abuse? Many studies highlight the negative impacts of an addiction to social media but what if social media platforms and networks evolved to help companies communicate and collaborate more effectively.
What are the opportunities of social media?
I believe that social media can be much more than consumer social networking and will offer companies that embrace it a significant advantage over their peers. Social media can if deployed correctly can play a pivotal role in supply chain management. Is social networking about socializing in isolation or is it about facilitating people-to-people communication cooperation and collaboration?
When you take a moment to think about it, every major brand is committed to leveraging the power of social media to connect with consumers offering customized messaging and promotions.
Many companies actively monitor social media platforms to understand what the marketplace is saying about your company and your brands. They also use social media platforms to communicate with consumers and strengthen relationships. Actively engaging in social media to influence demand and leveraging the demand signals in your supply chain represents a significant opportunity for efficiency. Actionable insights into customer sentiment, beliefs and preferences enable companies to understand and communicate with consumers on their terms.
Marketing’s embrace of social media is significant as the opportunity for social media in the supply chain evolved from the emergence of demand-driven supply chains. When you think about it, a demand-driven supply chain designed for responsiveness will benefit from a social network. If marketing’s goal is to stimulate and influence demand through social networks, it makes sense for supply chains to have a line of sight into this valuable information.
Social Media and Supply Chains Perception versus Reality
Too often supply chain executives can’t get past the word “social” and the negative perception it often creates. Many executives believe that work is about effectively completing a task rather than socializing. Numerous interviews with supply chain executives confirm my hypothesis that supply chain executives often do not understand the role social media could play in supply chain management.
Unfortunately, when supply chain executives hear “social media,” they think about Facebook, YouTube, LinkedIn, and Twitter. Moreover, because these social media sites fail to communicate any supply chain and logistics advantage, it is difficult to see how a social media platform or networks will positively impact transportation and warehousing operations. Rightly or wrongly the term “social media” has too many negative connotations in supply chain circles. The negative baggage from abuse on the consumer side continues to impact any description that includes the word “social” on the business side.
Maybe, positioning social media for the supply chain as a platform for continuous innovation that will help you understand demand signals in pursuit of increased efficiencies would help with acceptance and adoption. When deployed correctly, social networks in a supply chain will positively impact communication, collaboration, data mining, and data sharing.
Further complicating the issue is the fact that human beings are hardwired to resist change. So any platform or process that challenges the status quo will face numerous obstacles. Experience has taught me that any new application or technology will not be successful just because you tell people to use it. New technologies and processes often demand new skills and performance metrics and face considerable resistance. Supply chain practitioners are often creatures of habit, and embracing change is a daunting task. We must be able to convince key decision makers that leveraging social networks for supply chains will deliver positive and measurable results in the following areas.
- Help companies identify, understand and monitor demand signals, customer concerns, and opinions
- Create stronger links with marketing and many departments to deliver a more responsive supply chain and break down silos
- Effectively communicate key performance metrics; inventory levels, shipping, delays in transportation (e.g., weather, disasters, holidays)
- Create synergy and break down departmental silos with internal staff and suppliers
- Establish a line of sight to track products and communicate status visually
- Manage risk mitigation and demand volatility and identify and manage risks through data sharing and data mining
- Create continuous supplier feedback and identification of new vendors, business partners, suppliers
- Effectively communicate sustainability and ethical sourcing commitments and protocols
- Reduce labor costs by managing day-to-day supply chain activities more effectively
- Create enhanced opportunities for machine learning and AI for a sustainable competitive advantage across your supply chain.
Quantifying the business case for social media in the supply chain will be a daunting task as it will be difficult to validate and quantify the business value of using social networking technologies. Calculating how much will it cost versus how much will we save and the impact on productivity will create hurdles and bottlenecks for adoption. Companies who embrace social networks for their supply chain will not be able to answer these questions in the short term, which explains the slow adoption. Companies will not realize efficiencies until they take the first step down the social network path and make creating a best in class supply chain their goal.
To effectively leverage the quantum of potential that exists, all stakeholders must embrace the fact that social media in the supply chain is about creating a social network to get past the negative connotation of being about socializing. Social media in a supply chain is about creating an environment that facilitates and enables more effective communication cooperation and collaboration — thus building a strong foundation for effectively managing and executing supply chain processes. Social networking for a supply chain must go beyond the confines of traditional social media platforms; Facebook, YouTube, Instagram, LinkedIn, and Twitter to include an extended universe that encompasses leading software vendors that companies can leverage to more effectively manage their business processes across their supply chains.
What does the future hold?
In five to ten years social networking in supply chains will be ubiquitous. There will be one version of the truth, and the strength of your supply chain will dictate the power and potential of your company. Businesses will have no choice but to embrace social networks as a competitive advantage in a world of automation, machine learning and artificial intelligence. Being replaced by robots will be displaced by the importance of learning to work with robots.
Mobile technologies will move to center stage and innovation will evolve from the ability to harvest and transform data into knowledge. There will be an emergence and convergence of mobile computing and social networking driven by smartphones and mobile devices.
The continuous consumerization of IT and the growing acceptance of the fact that software in isolation will never be enough to address the challenges of demanding consumes and evolving supply chains. Social media will emerge as social business platforms and leverage the power of AI and Machine Learning. Lines will blur between in-store and online shopping and supply chains will adapt to meet the challenge.