Forbes had an interesting article, asking its readers whether they are ready for the social supply chain (“Are You Ready for the Social Supply Chain?”). It seems that the author and I don’t really know what is a social supply chain, but the article brings several interesting points
A recent report by Buddy Media and Booz & Company identified Facebook (with 850 million users, it shouldn’t surprise anyone that 94% of respondents regard it #1), Twitter(77%) and YouTube (42%) as the top three preferred social media platforms for brands to utilize. This information does not mean that the functionality of other social media platforms, including blogs, and enterprise systems like Moxie Software and Yammer are not valuable to enhance external communication and collaboration. “
Yammer improves communication within the organization by creating internal social networks for enterprise purposes, allowing employees to communicate among themselves. Clearly improving communication within the organization is a lofty goal, but is a social network the way to do it? I have seen firms in which employees were sitting in adjacent offices, and did not even share a common forecast, not to mention that none of them knew what inventory policy was the other person using. Is the only goal of this “social supply chain” to create a vehicle for communication among the different nodes in the chain?
The article that is part of collaboration between SAP and Forbes describes a recent acquisition made by SAP
SAP recently announced the acquisition of Crossgate to instantly connect SAP customers and their business partners to networking at the enterprise level. Crossgate helps companies connect with any trading partner by joining the network once and linking with prebuilt business partner profiles. This is a full-service alternative, which eliminates the need for costly point-to-point integration. It lowers costs and enables further partner participation in B2B initiatives
One can recognize the potential for social networks to enhance the way people across the supply chain communicate and collaborate with one another; improve the way companies process information to make potentially better decisions. From reading the article, it seems that the lack of communication stems from not having the right space to communicate and exchange ideas. But to me it seems that incentives play in huge part in it: the lack of incentives to share information and the lack of incentives to share forecast. Many of us are familiarize with the bullwhip effect that emerges due, in part, to partial information sharing among firms in supply chains. Tools for Collaborative Planning, Forecasting and Replenishing already exist for many years, and if firms do not use them, it’s not because they do not have a nice user interface.
It’s not that there are no opportunities in the intersection between social networks and supply chain (or operations management in general), but the rush to put the term “social” in front of everything becomes a little stale.
Gad – The Social Supply Chain includes increased communication but offers much more. I agree that Social gets slapped on too many things in an effort to spice them up. However, we have invested heavily in the development of a Social/Collaborative Supply Chain, or Supply Chain 2.0 (call it what you’d like), and can define it exactly even while its name fluxuates. First, lets look at the rise of consumer computing power in the past 5 – 10 years.
As consumers, we can begin using Facebook today. We don’t have to undergoe massive requirements gathering, cross functional team development, budget requests, RFI’s, RFP’s, scripted demonstrations, site visits/reference checks, etc. We just decide to use it and it delivers whatever value it might contain for us. Our continued use reflects that value. Add to this example any of the Social Media applications, iPhone Apps, etc. As consumers we have way more computing power at our fingertips than we do as employees.
Business has never enjoyed this luxury. Yes, the advanced strategies you’ve identified: Collaborative Planning, Forecasting and Replenishment have existed for years. While the concepts of collaboration have existed very few companies actually do it because their existing enterprise systems, regardless of age or sophistication, were not built to change. Evidence of this is everywhere when you look at the average time to implement (17 – 24 months) and the high percentage of projects that overrun budget and schedule (93% and 59% respectively). Many of these projects have been famous failures – where millions were spent, months/years elapsed, and the system is pulled.
So a Social Supply Chain requires agility, immediacy and self-control; all polar opposites to ‘legacy’ software. The core elements of business change very slowly, if at all. The edge elements of business change very quickly and constantly. The edge includes Operations: Vendors, Mfg., Distribution, Logistics, Field, Customers, etc. The transactions of these Employees, Vendors and Customers need to be improved so that they are more accurate, deliver on-going increases in productivity and visibility. Each legacy system in play, across the entire Supply Chain, cannot change: so a Social Supply Chain must be agile enough to immediately/seamlessly connect the legacy applications AND mold the transactions to fit the need to provide self-control.
The contents of a Social Supply Chain include the legacy apps, next generation enterprise apps (http://babblewareinc.com) and the eventual selection of one or more ‘social/collaboration’ platforms. We anticipate the more secure Yammer, Chatter or Google + will prevail in these situations – but the customer and their supply chain will decide. Companies can design, pilot and deploy the Social Supply Chain Apps themselves and continue to extract value and on-going improvements. Process Differentiation is a competitive weapon that has lay dormant too long (http://www.babblewareinc.com/index.php/2011/09/process-versus-product-differentiation/). Those companies that make the first moves will create tremendous competitive advantages as their internal subject matter experts flourish with new, proven innovations that deliver measured results before being rolled out.
Call it what you will; Social Supply Chain is the necessary evolutionary step to allow all strategies, innovations and company viability to be achieved without having to touch, disrupt, fund or be patient with the legacy apps that have choked business’ for 2+ decades.