Consultant Kim Doyle offered the following advice to those attending the Women in Manufacturing Summit last month: “Supply chain professionals must adopt a new approach to management to tackle the complex challenges posed by the expanding globalization of manufacturing.” This new approach should include:
1. Improve Supply Chain Visibility
Social Media could be invaluable in this regard, provided that companies would be able to gather and share the information needed by all members in the Supply Chain, both internal and external. However, even within a company, not all functions work closely together on Social Media. A research conducted by Tata Consultancy Services demonstrated that only 26% of respondents had four or more functions working together on Social Media. Functions that should be collaborating closely on Social Media but are not, include manufacturing, distribution, logistics, and risk management.
Moreover, manufacturers are not excelling in the area of supply chain visibility, in general. Only 9 percent of the respondents, to an Economist Intelligence Unit Survey of global manufacturers, said they could assess the impact of unplanned disruptions within hours. For most of the companies, it would take them more than a week to do so.
2. Become a More Agile and Flexible Supply Chain
The ability to detect changes in the supply chain environment is a key ingredient for agile operations to be effective. Social media is shifting control of brands to consumers, but companies have not yet adapted to this transition. Just half of the companies surveyed think Social Media is transforming the relationship between manufacturers and consumers.
Furthermore, speed and capacity to act are key qualities of an agile supply chain. Here again, only 25% of the companies indicated that they are good at creating an agile supply chain.
3. Focus on Risk Management
Cross functional groups in the value chain, both internal and external, should identify all sources of risk, and establish a monitoring and communication process to allow them to respond to problems as they arise.
Among risks, availability and cost of raw materials is ranked number 1 among consumer product companies. Six out of ten agree that it will become increasingly necessary to secure long-term supply of critical resources and commodities.
Some of the the risks the use of Social Media is more adept to spot include: changes in consumer demand, patterns in complaints, trends in brand reputation problems, angry customers, flaws in products or business processes, quality problems in suppliers’ products and services, problems with distribution and with problematic distributors, marketplace risks, etc.
4. Get the Right Supply Chain Talent
Doyle said. “Being globally oriented, obviously, having those deep analytical and strong technical skills are important. And because of that strong ability to collaborate and coordinate with other groups internally and externally, they need to have strong communication, and coordination skills.”
Moreover, talent and capabilities are considered the most significant barriers to executing strategy, with only 20% of the companies indicating that they are good at attracting and optimizing talent and resources.
Supply Chain environment is changing and companies need to adapt to them. In doing so, Social Media can be a key contributor. Nevertheless, companies will need to incorporate five best practices by which most successful users of Social Media differentiate themselves:
They have a much greater appreciation of the competitive potential of social media and how they should use it.
They are better at making sense of the mountain of digital consumer data – sensing the sentiments and other consumer comments, and then acting upon them quickly.
They are much more likely to have a big internal and external ‘social circle’ – more functions that use social media and jointly decide what to do with it.
They structure their social media activities more effectively, combining central and functional listening with local action.
They have a culture of ardent listening and transparency – both to consumers and with each other, internally and externally.
Submitted by: John Andrade – SMBP student University of Waterloo. To contact the author of this entry please email firstname.lastname@example.org
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