After publishing my last post on social media and the supply chain [More Thoughts on Social Media’s Impact on Supply Chains], I received a nice note from Ashly Li, whom I quoted in that post. She directed me to another short post she had written [“The Goal of Social Media in Supply Chain Management,” SpendZen, 6 June 2011]. In that post, she refers back to her earlier post (the one I cited in the above-mentioned post) and writes:
“I was trying to look forward on the possibilities rather than [the] present on the problems. Also, I was more concerned about the methodologies of social media to be utilized in the whole supply chain rather than the existing social media tools to be used for supply chain predictions on end user demand. Using social media in [the] supply chain will sure help provide useful and real-time information, but to me customer demand analysis is more in the scope of market research department than in supply chain department. Also, although I have been learning greatly by reading insightful articles on similar topic and I believe we can always gain useful insights in a tool by weighing its cons and pros, being analytical and critical is not the goal. The goal is to move forward and solve the problems. On [a] trip to NYC …, I happened to see a poster ‘Life isn’t about finding yourself; Life is about creating yourself’, which is very inspirational to me. It can be applied to every aspect in our life and work. In this case, using social media in supply chain is more about how you want it to be.”
In my posts about innovation and creativity, I have commented that new technologies are often used in ways that the creator of the technology never imagined. Put new tools in the hands of smart people and they will figure out how they can best be used — whether that is the intended use or not. I think that is what Li is recommending. We have social media — now what can we do with it? We don’t have to be confined to the obvious. Many people seem to believe that social media will primarily benefit retailers; but analysts like Li see creative uses for social media throughout the supply chain. Gabriel Gheorghiu is another analyst who sees social media benefiting others in the supply chain besides retailers. “Social media and collaboration,” he writes, “are … not industry-specific, and they can bring advantages to any company … concerned with the satisfaction of its customers.” [“Social Media and Collaboration: Not for “Serious” Manufacturers? Think Again.” Technology Evaluation Centers Blog, 14 April 2011] He continues:
“At the Gartner Portals, Content & Collaboration Summit I attended recently, several analysts shared some personal experiences they had with companies seeking to understand how social media and collaboration can impact their business activities. Of interest, they mentioned that manufacturing companies tended to take a cautionary approach and think as follows:
• Social media is a form of entertainment, and our business is not to entertain customers.
• We don’t need social media, and our customers would not react well to such an initiative.
“These statements are based on assumptions that are not necessarily true—e.g., consumers of fast-moving consumer goods (FMCGs) (toiletries, soaps, cosmetics, shaving products, detergents, and non-durables, such as batteries, paper products, and plastic goods, etc.) are interested not only in the quality of the product, but also in the buying experience of that product. They are also based on non-verified facts, such as the opinions of individuals—if you search the name of your company on Google, Facebook, or Twitter, you will probably find that people are already talking about your company.”
In previous posts on this subject, I noted that manufacturers who are trying create buzz or get people to try their products are much more likely to find success with social media outlets like Facebook. By offering free samples, coupons, or other special offers, they can improve “the buying experience of that product” as Gheorghiu states. B2B companies found business-oriented social media outlets like LinkedIn better fits for them. Gheorghiu goes on to address how manufacturers can use social media since they are part of “an industry sector that is still very reluctant to adopt them.” He continues:
“As manufacturing companies need to manage complex processes, they have to find ways to enable individual employees and entire departments to work together. But this is usually done through a mix of rigid business processes introduced by management and informal habits created by people to compensate for missing or weak workflows. Unfortunately, employees in manufacturing companies usually see collaboration as just another aspect of the job or a way to make one’s life easier—and not as a strategy and culture that benefits everyone (including business partners and customers).”
As I have noted in several past posts, more and more analysts believe that collaboration throughout the supply chain will differentiate winners and losers in the decades ahead. Gheorghiu apparently also believes this, which is why he wants to demonstrate “why social media and collaboration are important to medium and large manufacturers.” He lists two primary reasons. The first has to deal with customer relations. He writes:
“• Social media is not only a popular and widely used forum, but also a great source of information that can prove to be extremely valuable to manufacturing companies. From end-user communities to unstructured data that can be found on Twitter and Facebook, feedback can be gathered regarding the products and services companies provide. This feedback can be used for several purposes: improving the quality of the products, designing new products, enhancing the customer service experience, and staying current of changes in customers’ purchasing behavior.”
Supply chain analyst Lora Cecere, believes that social commerce has “the power to redefine the shopping experience allowing companies to anticipate, personalize and energize the shopping experience in new ways. Untapping the potential of this technology shift will make the vision of customer-centric value chains … a new reality.” [“The Rise of Social Commerce,” Supply Chain Shaman, 15 October 2010] Cecere goes on to assert, “[Social commerce is] reshaping value chains. More than ever, retailers are now manufacturers and consumer products manufacturers can now sell directly to loyal shoppers. The power is shifting to the shopper. The digital consumer now has the power of the value chain in the palm of their hand, but more importantly, it allows a company to have a direct dialogue with a consumer in a more meaningful way.” Gheorghiu’s second reason that manufacturers need to embrace social media focuses on collaboration. He writes:
“• Collaboration can be the differentiator between a successful company and its lagging competitors. Extensive collaboration can empower a company to produce more innovative products, run the business with better processes, and make employees work more efficiently. A culture of ideas and information sharing, along with the right tools and processes in place, can enable employees to contribute to the enhancement of their activities, which can have a huge impact on the success of the organization. Collaboration may include partners, and even communities of users and customers (existing or potential).”
“Supply chain analyst Trevor Miles insists, ‘Collaboration can bring tremendous value to outsourced supply chains, such as we see in electronics and apparel.’ [‘Visibility is a Start. Collaboration is the Goal.‘ The 21st Century Supply Chain, 28 March 2011]. He then asks a fundamental question: ‘But what is collaboration?’ He continues:
‘All too often collaboration is viewed in the context of exchanging data. Visibility to data is important, but collaboration is ultimately about teams of people working together to achieve a shared objective (but perhaps not a common goal). The potential value of collaboration in the supply chain is enormous in terms of both reduced inventory and increased supply chain agility, not to mention the reduced cost of ‘policing’ supply chain relationships. Visibility is a start. Collaboration is the goal.'”
“Medium and large manufacturers should take advantage of both collaboration and social media tools to improve the overall business performance of the company. But, as any major initiative, this should be done cautiously. Do not jump onto the bandwagon without first understanding what this initiative would mean to your company, and stay away from experts who promise you fabulous results over the short term. Instead, start small—there is surely someone in your company who would like to get involved in a social media initiative. … And if you fear that you’re going to lose control over what’s being said about your company, you should know that this has already happened, or it will happen soon—and there is nothing you can do about it! The idea is not to control people, but to give them the environment and the tools to work better as a team and contribute to the growth of your company.”
Gheorghiu asserts that if you want “a very good example” of how a company can successfully use the combination of social media and collaboration you should study “the Procter & Gamble Connect + Develop innovation strategy.” In a future post, I’ll examine how consumers are beginning to warm to the idea of using social media outlets as channels for making purchases.