The Social Supply Chain

Stephen DeAngelis

May 10, 2012

During an interview with Dustin Mattison, George Ellis, a global supply chain executive at Tyco International, defined the social supply chain as “the application of social media technology across the entire breadth of the typical supply chain, all the way from supplier’s suppliers to customer’s customers. It also includes the integration of social media technologies or social media-like collaboration technologies within organizations to connect and empower the people across the entire spectrum of the supply chain.” [“Views on Social Supply Chain,” Dustin Mattison’s Blog, 24 April 2012] Lorcan Sheehan discusses socializing the supply chain rather than creating a social supply chain. [“Socializing the supply chain (Part 1)” and “Socializing the supply chain (Part 2),” ModusLink’s Value Unchained, 3 and 16 April 2012] In the end, I believe Ellis and Sheehan are talking about the same thing. Sheehan writes:

“Like it or not, social media is an extraordinary phenomenon. With the exception of a few obscure chat rooms, the concept of social media did not exist 10 years ago. Yet, it is now estimated to involve and connect over 1.2 billion people on the planet, or more than 80 percent of the Internet population. Facebook, YouTube and Twitter are undoubtedly the leading forces behind the social era. However, a number of other networks are also making a remarkable ‘social’ contribution for supply chain professionals.”

During his interview with Mattison, Ellis admitted that the customer facing side of the social supply chain has received most of the attention. He said:

“We are seeing quite a bit on the customer facing side of organizations today. Customers are leveraging social media to connect with their customers from a marketing standpoint to promote and advertise their services and capabilities. Social media is also playing a significant role in customer service. Consumers are able to communicate with the customer service departments of a growing list of organizations through Twitter and Facebook. These are examples of applications on the customer facing side of the supply chain.”

Ellis notes that, although the supplier facing side of the supply chain has been slower to adopt social media technology, part of the reason has been that “applications [are] just now becoming visible and promoted, such as Volerro which is developing a social media type application for managing suppliers.” He went on to say:

“I believe we will start to see social media-like capabilities being developed any place in the supply chain where there is a need to drive a more holistic, broader and deeper level of collaboration between players. What is interesting is that we are seeing the development of commercial or B2B solutions, versus the consumer driven social media solutions out there today. The consumer-oriented applications don’t have the robust security, search and information management capabilities that a robust commercial collaboration platform would need to have. That is why new tools that incorporate these requirements are being developed today.”

Sheehan agrees with Ellis that tools are rapidly being developed to help companies collaborate better with their suppliers. He writes:

“Supply chain professionals have had access to specialized procurement platforms for decades. But what the Internet has brought is a faster way to access this information with a wider reach. Now brands like Salesforce are incorporating social media to create Enterprise social networks like Salesforce Chatter. Enterprise social networks like Chatter are cheaper and more informal ways of inquiring about solutions, prices or any other type of information that can help streamline sourcing, pre-qualification or even risk-management. This is also becoming an effective way of disseminating information (be it new policies or else) to your supply base and keeping an eye on what is happening with them. Finally, embedded survey tools or more sophisticated RFP (request for proposal) solutions can also help a great deal in making their administration more efficient, and this is also valid for the supplier selection process.”

Ellis next turns his thoughts to internal corporate communication. He begins by talking about Twitter. When Twitter was first introduced, who would have predicted that a business leader, several years down the road, would be extolling its virtues? Not me. Now I find myself tweeting (@EnterraSolution and @EnterraCEO). Ellis says, “I have found that Twitter is one of the most effective channels for learning about what is going on in supply chain and learning broadly and deeply. Twitter is emerging as a wonderful learning platform.” I’m learning that there is a real art to getting a salient point across in 140 characters. Admittedly Twitter can be a waste of time, but Ellis reports that “there are all types of courses at all levels, science programs for school classrooms for example, being developed on Twitter feeds. In the future we are going to see Twitter-like or other social media applications provide much greater focus and more solutions for learning within organizations.” He went on to say:

“I can tell you that both my current and previous employers have internal social media networks within the companies, with firewalls. Companies are going to have to allow their employees to link up with external social media networks as well. These well defined silos, and the barriers between internal and external, over time will erode.”

I am only one of many pundits who have insisted for years that corporate silos need to be broken down so that a company can get better aligned and take advantage of information sharing opportunities that have emerged in the era of Big Data. Obviously Ellis agrees. He is also a big fan of LinkedIn, where he started a Social Supply Chain Networking Group.

“I am very excited about it. It has grown very rapidly. Within 3 weeks we … had 220 members join the group. These are mostly people who were in my network but we have also attracted members from the broader LinkedIn community all over the world. The vision is that we will have an opportunity to engage with some of the solutions providers. As we move forward we will also have an opportunity to see some of the jobs offered by those players, and jobs within companies that want to leverage social media across their supply chain organizations.”

Sheehan agrees with Ellis that professional networking plays an important role in the social supply chain. He writes:

“Sales representatives were the first people to safeguard and organize their Rolodex through online solutions such as Plaxo. However, these address book alternatives have been outpaced by professional networking sites such as LinkedIn. Professional social networking sites offer value-added tools that allow you to make targeted connections, leverage your extended network to a level never seen before, or just ‘keep in touch’ with more direct contacts than could have been manageable a few years ago. Industry groups and forums on LinkedIn are also becoming a meaningful way of identifying opportunities and gathering intelligence on your market as well as your competition.”

Ellis concludes, “There is a lot of interest in social media and how it is going to be integrated across supply chain and logistics operations down the road.” Ellis didn’t dwell too much on the customer facing side of the social supply chain, but it has obviously had tremendous impact over the last few years. Sheehan writes:

“It is probably fair to assume that a large portion of your customers are active social media contributors. In the last few years, a number of companies have seen that it only takes one influential and dissatisfied customer to damage your brand reputation online. However, this is a risk that can be mitigated. Dell, which relies heavily on its own e-commerce site to sell its merchandise, has recently taken an active step in monitoring what is said about the company via social media. The company is using a social media monitoring platform called Radian6 in its Social Media Listening Command Center to listen to and analyze more than 20,000 daily posts – and act where necessary to convert negative comments into satisfied customers. Before social media, satisfied or dissatisfied customers would share thoughts with a handful of their friends. However now in the social era, one unhappy person’s thoughts could be shared with a network of ‘friends’ averaging over 100 people. The good news is that this also creates an opportunity for positive messaging which Dell well understood.”

If you want to read a fascinating account of how social media can bring a company to its knees, read Bryan Gruley’s and Elizabeth Campbell’s account of how social media contributed to the dramatic downturn of Beef Products Inc. [“The Sliming of Pink Slime’s Creator,” Bloomberg BusinessWeek, 12 April 2012] By referring to BPI’s “lean finely textured beef” as “pink slime,” social media pundits created a toxic environment that resulted in BPI having to close three of its plants and let go of almost 700 workers. BPI’s story should be a cautionary tale for any business. Sheehan concluded his two-part series this way:

“I believe we are still in the early days of social media in the workplace and various elements will need to be addressed such as privacy, confidentiality, legitimacy, piracy to name a few. No doubt that it will shake-up a large number of policies – perhaps much further than the emergence of ‘e-mails’ triggered in its early days. One thing is fairly clear – if you intend on keeping the lines of communication open with your customers, staff and other stakeholders, you will need to connect with them on the social platforms where they are congregating. Go on, give it a go, you could even save costs in the process!”

I still believe that what Ellis and Sheehan describe is better referred to as a demand driven supply chain than a social supply chain; however, whatever you call it, the objectives remain the same — better supply chain visibility and information sharing.