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Social Media for the Supply Chain: Help or Hype?

Once a new technology tool becomes embedded in the business world, one tends to forget the doubt and confusion that marked its debut. As anyone over the age of 30 will recall, companies once debated the value of having websites. Early users of the internet were actively hostile to the notion of a network that was created for the defense and academic communities being co-opted by the commercial sector. Now, of course, any business that isn't on the internet is either utterly clueless or not serious about being a success. Yet we seem to be having the same debate all over again, this time centering on the proper role of social media.

To be sure, companies of every size and industry have jumped on the phenomenon, embracing popular social networks such as Facebook, Twitter, LinkedIn and Pinterest, among many others. (How many advertisers have invited you recently to "join the conversation" about their products?) The latest Survey of Third-Party Logistics Providers, conducted by Northeastern University and sponsored by Penske Logistics, found 64 percent of respondents with LinkedIn accounts, 47 percent with Facebook pages and 36 percent with Twitter accounts.

To date, however, such efforts have focused mostly on marketing, advertising and customer relationship management. Relatively few have tapped into the social networks as a means of communicating both internally and with key supply-chain partners. And there's even a lot of push-back on the marketing side, too.

Multiple surveys underscore this state of affairs. According to a 2011 report by IDG Research Services and Kemp Goldberg Partners, only 40 of respondents were using any form of social media to interact with supply-chain partners. Fifty-eight percent said they were "totally unaware of how their primary supply-chain vendors are using social sites, or that their primary supply-chain partners are not using social sites to interact with customers." Even more alarming were the 43 percent who saw absolutely no likelihood of using social media in their supply-chain relationships, even if they were presented with the opportunity to do so.

A more recent report by Aberdeen Group, Inc. was slightly more positive. It found that 44 percent of respondents were already using social media in some manner to manage their supply chains, while 37 percent said they intended to begin within the next one to two years. But the remaining 19 percent had no plans of any kind. As Santa Clara University professor Terri L. Griffith puts it: "They need to get a clue."

Griffith, author of The Plugged-In Manager, is a big advocate of deploying social media on the business side. Yet in a recent presentation to the San Francisco Roundtable of the Council of Supply Chain Management Professionals, even she admitted that she "wouldn't normally be talking to people in supply chain."

So it would seem. "But as I got to understand the area better," she said, "it became clear that supply-chain professionals are the perfect audience to talk to about social media."

Or at least begin the conversation. Griffith acknowledged that companies are in the very early stages of adopting social media within their supply chains. "We had a hard time tracking down great examples outside of customer relations," she said. One is Con-way Inc., which is using the tool to instruct drivers to pick up loads. Another is Penske Truck Leasing, which is deploying several social networks for product marketing, customer service, sales, news updates and recruiting. That's still a far cry, though, from tying together multiple upstream vendors and suppliers through social media.

When approaching these new channels of communication, businesses should not feel obligated to embrace them all. "You don't have to be in every social network," Griffith said. "You have to make educated choices."

In addition, don't feel as though you have to take full advantage of the open nature of social networks. Businesses aren't as inclined toward "sharing" as private individuals, especially those who want the whole world to know what they had for breakfast this morning. "You want limited, key connections," said Griffith. "You don't want all your suppliers talking to one another."

Some of the newer tools are expressly designed with that kind of selectivity in mind. Smartsheet, a vendor of software for online project management, allows users to choose which rows of an Excel spreadsheet to share. "You get transparency, while still managing privacy when you need to," said Griffith. Other collaborative applications with relevance to business include Foursquare, which lets participants "check in" on the progress of joint projects, and's Rypple, which extends that capability to allow companies to monitor employee performance.

Other possibilities with a social slant include micro-blogging, by which companies can exchange small bits of information in the course of the workday ("It's like passing in the hall," Griffith said); wikis, websites for groups to write documents collaboratively, and user forums. Some of these have little or no relationship to social media as they are understood by the general public, but that's exactly the point. "It's not just about social networking," said Griffith.

The real value of social media for business lies in their ability to tie together disparate aspects of the supply chain, which is every global company's number-one challenge. They can help to fill in the information gaps that keep manufacturers, distributors and retailers from asserting full control over the flow of product and data. And, if utilized properly, they can do it on a real-time basis.

You don't need Facebook, of course, to reach that goal. Moreover, there are aspects of social media that are clearly unsuited for business. As the dizzying array of options begins to shake out, companies should get a clearer sense of how the tools can help them unify their supply chains.

Hype and trendiness notwithstanding, they need to be taking the options seriously right now. "Social media," said Griffith, "can help you connect more dots than you thought."

Now excuse me while I go tweet this post.

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Keywords: Collaboration & Integration, EDI Communications (XML/EDI), Technology, Business Intelligence & Analytics, Business Process Management, Customer Relationship Mgmt., Sales & Operations Planning, Sourcing & Procurement Solutions, Supplier Relationship Management, SC Planning & Optimization, Supply Chain Visibility, Global Supply Chain Management, Business Strategy Alignment, Supply Chain Management for Marketing, Aberdeen Group, Social networks for supply chain, social media, social marketing, internet technology, supply-chain collaboration, customer relationship marketing, business intelligence

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