A brave new world: Social media, supply chain management and risk

In today’s highly competitive market, organizations must strategize to create avenues of innovation, efficiency, and increased productivity to hold on to their competitive advantage. An area with room for growth for many firms is more effective supply chain management. With a vast array of social media tools available, organizations can improve operations in several ways including but not limited to increased visibility, communication, coordination, and reduced costs.

“Although a vast majority of people reference only the most popular social networks – Facebook,  Twitter and LinkedIn when thinking of social media, the true social media experience is much larger for companies. They can engage users through smart phone applications, RFID, IoT, Big Data, business social media (for sharing information between partner groups) in order to help information spread much more quickly.” Ranjan Sinha, Logistics and Supply Chain Management Professional

Supply chain coordination

In today’s marketplace, firms communicate with multiple partners throughout their supply chain logistics process. Social media applications have various benefits, for example, they facilitate more efficient management of inventory and improve communication channels between partners. Logistics can be shared, along with data and supplier processes. It is also helpful to contact individuals within a real-time space, thereby improving efficiency and productivity. Social media also allows firms to access a vast pool of potential suppliers across the global marketplace resulting in cost savings. Social media applications facilitates more functional integration along the supply chain trajectory. The same applications used for personal social networks can also build and grow
relationships between trading partners and determine
key performance indicators.

 

Using social media to mitigate risk

Typical components of a risk management plan

1. Risk identification (risk events and their relationships are defined)
2. Risk impact assessment (consequences may include cost, schedule, technical performance impacts, as well as capability or functionality impacts)
3. Risk prioritization analysis (decision-analytic rules applied to rank-order identified risk events from ‘most to least’ critical)
4. Risk tracking (watch listed risks and mitigate)
5. Risk mitigation planning, implementation, and progress monitoring (risk events assessed as medium to high critically might go into risk mitigation planning and implementation; low critical risks might be tracked/monitored on a watch list.)
6. Reassess existing risk events and identify new risk events.

There are three main ways in which social media can be used as a business tool to support supply chain risk management strategies.

1. Obtaining news in real time – it is imperative to identify and address natural disasters and political upheavals in areas housing components of the supply chain.
2. Data mining for emerging risks – social media can help organizations pinpoint problems throughout the supply chain in a timely fashion.
3. Communication with customers – a firm can quickly and easily disseminate information to customers about a potential problem or delay. Social media channels enable firms to communicate quickly and broadly across the customer base.

Lessons for Others

Social media is an excellent tool for businesses to employ as part of their supply chain management strategy. As outlined in the discussion above, social media channels can help companies identify and mitigate risks in real time while also ensuring communication is ongoing with their customer base. Firms can collaborate with stakeholders, peers and suppliers. They can ensure retention rates of existing customers remain high while ensuring costs are kept at the margin.

If you have concerns as to the accuracy of anything posted on this site, please send your concerns to Peter Carr, Program Director, Social Media for Business Performance.

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