Electronics supply chain managers generally agree that social media has a role to play in business, but nobody’s sure exactly what it will be. All partners are struggling with the same set of questions regarding social: What information should be shared, and with whom? What do businesses do with incoming data? How much can this information be trusted? And what will it cost to get involved?
Right now, many individual companies are working within their respective silos to figure this out. E2open, which provides a connectivity platform for supply chain networks, is expanding the base through an initiative to integrate social technologies into its E2open Business Network. “Our customers tend to be innovative, and want to use this technology to be more productive,” Lorenzo Martinelli, SVP Corporate Strategy at E2open, told EBN in a recent phone interview.
E2open cites research published by the McKinsey Global Institute in July 2012, which says:
Improved communication and collaboration through social technologies could raise the productivity of interaction workers by 20 to 25 percent… These technologies, which create value by improving productivity across the value chain, could potentially contribute $900 billion to $1.3 trillion in annual value.
E2open is focusing on three key areas most pertinent to the supply chain: issue collaboration, demand sensing, and supply risk monitoring. These areas could benefit from social media application, Martinelli says.
The most common communication among trading networks is collaboration to resolve supply chain issues, E2open has found. Currently, this communication is typically done via email, instant messaging, phone/conference calls, war rooms, and face-to-face meetings. “There is a belief that the current structure, with different companies in different time zones, is not as productive as it could be,” Martinelli said. He went on:
Since the supply chain already uses a process of exception management, this is a good context in which to start the conversation. For example, if there’s a shortage, have the right people been notified? Are there costs associated with this shortage? Since mobile is already a common communications tool, we think that could be escalated to a higher level of structure. Facebook and Twitter may not be the right platform for this; if not, we could provide one.
One of the biggest challenges across trading networks is inaccurate demand management due to the volatile nature of forecast planning and limited real-time visibility. According to Martinelli:
The concept is pretty simple. Let’s say I come up with a new lipstick in red and pink. Our forecasts are at best a guess. Now, let’s say we are tracking what people are saying on the social network on red vs. pink. We see more people talking about pink, but my production forecast is for 50 percent red and 50 percent pink. Social can be an indicator to what people really want, and that can help a forecast.
Supply risk monitoring
A critical risk across trading networks is the occurrence of an unplanned event that has a negative impact on the supply of products and/or their logistics movements. Many E2open customers have identified the combination of social media monitoring with cloud-based, big-data, predictive analytics as a potential way to change the economics of supply risk monitoring. Martinelli went on to explain:
There may be a problem with a particular supplier, or a problem that affects all suppliers and logistics lanes in a specific geography. The concept is similar to demand modeling, but the information is about a specific supplier or the logistics route a company takes. Let’s say the Occupy movement has shut down a seaport and I have cargo coming in next week. I could contact a commodity manager and let them know that there will be a delay and help this supplier rebalance inventory. The challenge is building the knowledge base to look for the right things. If we had known about the rains in Thailand, we could have saved millions of dollars.
E2open's customers — and most members of the supply chain — spend most of their time just resolving issues, Martinelli says. “If you approach these things in a more structured way, you can improve productivity.”
Anyone interested in the initiative can get involved through this link.