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The Impact of Social Media in Supply Chain Intelligence

In a recent post, Luciano Cunha on the Warehouse Management Systems Guide poses some interesting questions about how companies may begin thinking about application of social media in the supply chain context. Specifically, he notes that “The absolute real-time nature that is inherent in social media can act as a blessing and a curse for professionals overseeing a supply chain. In one sense, access to real-time data can help supply chains run ultra lean – as proper analysis can lead to producing just enough product to meet consumer demand.”

The beauty of social media, of course, is that it is in “real time”, as customers (and suppliers, for that matter) are interacting digitally and responding to situations, product or service preferences, and events and are communicating these to others that happen to be on the network.

“Yeah right”, you say. Unless I am a teenager interested in the latest color of iphone that others in my peer group are buying, who else is using social media? But it may be taking on more significance than you think. Cunha notes that “earlier this year, analytics firm ForeSee Results found that social media is driving just 5% of visitors to retail websites. But across the world in China – recently named by CNBC as the world’s hottest emerging retail market – an Internet population of 404 million trusts brand information from social media three times more than from an acquaintance’s recommendation (per 2010 Global Web Index data, cited by Ogilvy’s Andrea Fenn).”

Other than from a marketing and sales perspective, social media can be a real tool for market intelligence. Cunha notes that the “cultural peculiarities of any group and the risk of looking at all social data in aggregation. Social media data, like the traditional data used to make supply chain decisions, ebbs and flows, from one extreme to the next. This is where behavioral analysis – especially from those embedded within your markets – can be invaluable in humanizing the ERP intelligence data.”

The application of social media in managing supply chains has appeared in a few conversations I’ve had as well. For instance, one manager noted that if he was worried about a possible supplier that was facing financial hardship, he didn’t turn to the D&B ratings, but looked at Linkedin and Facebook to see if any of the suppliers’ employees were posting their resumes en masse! Similarly, a manager I interviewed recently is exploring how to use social media to drive Supplier Relationship Management. Social media could be a tool that facilitates socialization of people between organizations that is fundamental to the development of supply-based advantages. These are trends that have a theoretical basis in socialization as a mechanism to trust but to my knowledge, a concept that has not yet been explored in detail.

He envisions this as a way of communicating with suppliers to let them know about current initiatives, opportunities, events that impact the buyer-seller relationships, and to be able to do so with multiple companies at the same time as opposed to point-to-point. This could be, for instance, critical information that may not necessarily be shared with their competitors, and a way to make sure that the right people get the right information.

First movers here can have a real advantage….