Organization Name: Teva Pharmaceuticals
About Teva Pharmaceuticals
TEVA is in the business of buying raw materials from companies as far away as India and Canada, mixing those materials according to a precise recipe, encapsulating them in pills, packaging them, and selling them through distributors. Tony Martins, TEVA Canada VP of supply chain said “We found ourselves living in the world of ‘not supposed to happen’ where more than half the time managers, supervisors, and key resources were handling surprises–things that were off script.”
What this pharm business did
Whenever a business process didn’t fit neatly into an ERP (Enterprise resource planning software) application form, the resulting problem would have to be addressed manually, Martins said. Operations managers might not even find out right away that something had gone wrong, and while the message worked its way up the chain of command, precious time was lost.
TEVA introduced Employee Spaces, Martins said, convincing employees to share their work issues more widely. That proved challenging at first. Also, not all employees were used to the social style of interaction, and even some of those who had Facebook accounts for their personal lives were puzzled about how to apply the same techniques to getting work done. But they learned to do it once they saw it produced results.
The social software implementation is, so far, a regional implementation at TEVA Canada, a division of the Israeli manufacturer of generic drugs. In addition to applying social software internally, Martins has created joint social communities with some key suppliers of raw materials. In one case, this resulted in a 15% reduction in lead time, while in another, where the social integration went deeper, the supplier cut lead time by 60%, Martins said.
What Teva learned
Social networking allows you to stay in touch, in real time, with your entire supply chain so you can manage it more efficiently, save time, keep everyone in the loop, and increase productivity. It increases collaboration among the partners and allows for transparent group conversations. You can track logistical updates, share data and knowledge, improve relationships, and monitor progress across your entire network of suppliers.
According to Aberdeen Group Inc. (2012) 44 percent of companies currently use social networking to support their supply chain while 37 percent of companies confirm that they will start to use social networking for their supply chain processes in the next 12 – 24 months.
Social networking has demonstrated that complex ‘enterprise’ solutions can pop-up with very little effort, expense or user training. Source: informationweek
Over 70 percent of all Fortune 500 companies rely on social media as part of their marketing strategy and supply chain management.
Simply put, the term “social media” has an image problem in supply chain circles. It carries a lot of baggage, and other names being used, like “enterprise social software,” aren’t much better.
In fact, 30 percent of the supply chain professionals surveyed reported that their companies currently block access to social media sites. At the same time, however, 45 percent said that “social networks will make supply chain processes more efficient, responsive, and cost effective” over the next five years. Another 30 percent said that “social networks will transform supply chain processes (for the better) in ways we can’t imagine today”.
The successes at Teva Pharmaceuticals
TEVA Pharmaceuticals recognized that the speed of supply chain is about people talking to people, and has harnessed the power of social media to enhance communication between internal functional groups.
TEVA Pharmaceuticals reduced manufacturing cycle time by 40 percent in four months and improved lead time from upstream suppliers by as much as 60 percent.
Teva employed social enterprise software to address a challenging business environment from shifting consumer demand and changing regulations to supply shortages. Like most organizations today, TEVA Pharmaceutical’s business had become unpredictable, but the company tackled critical issues by employing enterprise social software, leveraging one of its key benefits — “spontaneous association,” that allowed its employees the ability to come together quickly to solve specific problems.
TEVA Pharmaceutical reduced manufacturing cycle times, became more responsive to vendors and partners, and streamlined business processes through social enterprise software, dramatically increasing operational efficiencies.
Why Companies Aren’t Using Social Media Supply Chain Management
- The word “social” creates the wrong (a non-business) impression
- How do you get people to change the way they work?
- Why is using social media better than how we’re working today?
- Social media is too generic for supply chain use
- Executives don’t have the time or desire to access yet another information system
Using modern technologies, such as social media, can improve an organization’s supply chain management. It can create more visibility, improve communication, increase control, and reduce operational and labor costs. When you have a more efficient and stable supply chain, you can enhance your customer satisfaction. The ripple effect of using social media to improve supply chain management can expand outwardly across virtually an entire organization, which is great for business.
- Better communication with customers
- Better communication with your supply chain
- Increased visibility
submitted by: Christine Diesbourg, University of Waterloo