Make the Social Network Work for the Supply Chain

By Andrew K. Reese

Consumer-oriented social media and social networks have existed since the mid-1990s, but they only entered the broad public consciousness in the mid-2000s. In fact, do a search for "year of the social network" on Google and you can find one source or another suggesting that every year since at least 2004 was, in fact, "The Year of the Social Network." Of course, 2004 was the year that saw the launch of Facebook, arguably the most successful of its breed to date — and the site that inspired the very movie "The Social Network."

Business use of social networks, predictably, started with Sales and Marketing, which have tended to view the networks as yet another channel for connecting out to customers. But Engineering and Product Development, too, have made use of social networks as tools for gathering consumer feedback on products to detect quality issues or to understand features in demand for future products.

Supply Chain has been slower to embrace social media. But supply chain practitioners increasingly are coming to see opportunities to leverage social networks as another tool for managing the supply base. At the same time, social networking opens up new risks for enterprises and their supply chains. Either way, supply chain executives are finding they can no longer afford to ignore social media or social networks.

Social Media — The Survey

To understand the impact that social media are having on the supply chain, Supply & Demand Chain Executive conducted a quick survey of a slice of its online readers. While only a small sample of 41 readers, the results were nevertheless revealing. The results also might be comforting for Mark Zuckerberg, co-founder of Facebook, which drew the greatest number of users who frequented a social media site more than once a day. The career-oriented LinkedIn, on the other hand, proved most popular of the sites, with nearly half of the respondents (49 percent) visiting the site at least several times a week. (See Illustration 1 — click here to open in new window/tab.) In fact, when asked to name the top three social networking sites they used for professional purposes, LinkedIn came out on top, cited by 76 percent of the respondents. Facebook followed at 41 percent, followed by Twitter (34 percent) and industry blogs (32 percent).

We also asked about the primary business reasons for using social media Web sites. Not surprisingly, the most commonly cited reason was "personal career advancement" (cited by 56 percent of respondents). But just over half (54 percent) also cited "interacting with peers to discuss relevant business issues" and "research market conditions or trends" as important drivers behind their social media activity. What was somewhat surprising was that respondents more frequently cited externally focused activities like "external engagement with customers," "external engagement with suppliers" and "research/search for new suppliers" than more internally focused activities like "cross-functional engagement within my company" or "internal engagement within my department/function." (See Illustration 2 — click here to open in new window/tab.)

The focus on personal professional advancement was evident in responses to the question about the importance of social media to one's career. While social networking sites are still relatively new, more than one-third (36 percent) of respondents said that the sites were "very important" to their career, and another third (33 percent) said that sites were "somewhat important." Just 7 percent said that the sites were "not at all important" to their careers. In comparison, 15 percent said that social media were "very important" to performing one's job, while 44 percent rated the new social tools as "somewhat important." (See Illustration 3 — click here to open in new window/tab.) Those figures are likely to rise in the future in light of the responses to the question, "How do you see your use of Social Media tools as part of your job increasing in the future?" Four in ten (38 percent) respondents said that their use of the tools on the job would be "increasing significantly," while 43 percent responded "somewhat increasing." Notably, no one saw decreasing use of social media for the job in the future. (See Illustration 4. — click here to open in new window/tab.)

Tools of Engagement

Justin Fogarty believes it's only natural that Supply Chain practitioners are turning to social media sites as part of their jobs. Of course, social media is a big part of Fogarty's job as online community manager for Ariba, the provider of spend management and business commerce solutions. He oversees Ariba's customer community called Ariba Exchange, as well as five separate LinkedIn groups — the largest of which, Strategic Sourcing & Procurement, includes more than 23,000 members globally.

Supply Chain practitioners are constantly looking for new sources of intelligence, whether on market conditions, competitors, or current or potential suppliers, Fogarty notes. So it's to be expected that they would be looking beyond their own organizations and beyond the circle of people that they know to find credible sources of information. "You have your network of peers and colleagues, and you might have events that you go to every year and other offline ways that you connect with peers. But that might not be enough. They might not have the information that you need, or they might not have information that you find credible. Or it might be that they are not using the same tools as you. So there are any number of reasons that you might go looking for a broader group."

Tools like LinkedIn groups or vendor-managed sites like Ariba Exchange or BravoSolution Education Network give us the opportunity to engage with, and get answers from, sources that offer different perspectives than what we might be used to within our circle of friends and colleagues. The vendor-managed sites can be particularly useful, Fogarty asserts, because they offer a largely spam-free setting in which users can obtain tips on how to take advantage of specific functionality within a solution from other users just like themselves. "These platforms are intended to facilitate that type of discussion, so you don't have to wait for the next user conference to get an answer to your question," he says.

"Devastatingly Effective"

The kinds of intelligence and insights that can be gleaned from social media can be surprising, according to Brian Sommer, president of technology research firm Vital Analysis, a part of TechVentive, Inc. LinkedIn, for example, can be useful for tracking executives at a strategic supplier. If key leaders suddenly begin updating their profiles to reflect new jobs, including jobs with competitors of the supplier, a supply organization should take note and start looking at the health of that supplier.

Sommer also points to sites like Slideshare.net and Scribd.com, which allow users to post presentations online for anyone to download. It can be surprising to discover, for example, that competitor or supplier executives have given presentations at trade shows revealing business plans, strategic initiatives or detailed information about company financials. Often the executives who gave the presentation doesn't even have any idea that the conference posted the presentation online via the event's Web site. All this information can be readily found using a few simple searches on Google, Sommer says.

In general, the proliferation of online news sites, blogs and other media channels has opened up a Pandora's box of information available at no charge. "With what you can find out for free, it's almost like, 'shame on you for not looking," Sommer offers. And yet many people aren't aware of the sources, or haven't yet made the effort to begin exploiting them, according to Sommer. He continues: "A lot of people think that it takes a long time to pull this kind of information together, but it really doesn't. The problem is that people don't have the time or patience — or just have never tried — to make a discipline out of it. But many people just aren't aware of how much information is out there. You only need to know a handful of search optimization parsing rules and you can be devastatingly effective."

Jon Bovit, chief marketing officer for CVM Solutions, which provides supplier information and risk management solutions, noted in a recent blog entry on forbes.com that Chatter on Salesforce.com makes it easy for procurement staff to subscribe to updates from suppliers or groups of suppliers. "Supplier managers can choose to 'follow' ... any supplier information stored and be notified as data changes automatically," Bovit writes. Supply managers also can use Chatter to comment on suppliers or post relevant information on discussions with co-workers that are interested in a particular supplier. "This helps to cut across organizational boundaries and leverage the power of specialists," Bovit suggests.

Defensive Policy

Of course, with all the data points available freely on the Internet, it make sense to consider the types of information that your company and you personally are putting out on the 'Net, including on social networking sites. "Procurement may want to have a conversation with Legal about what kinds of documents can never be put out into the public domain, subject to legal limitations," Sommer advises. Marketing also should be brought to the table to similarly discuss what information is acceptable to put out about the company. And HR needs to be engaged in setting and enforcing a company policy about what employees can and can't say on sites like Facebook and LinkedIn.

Debbie Wilson, a research director with analyst firm Gartner, agrees that that management will need to balance the opportunities for mining intelligence from social media sites with concerns that employees either will use social networking for personal purposes — like job hunting, for example — or will go too far in sharing internal company information. Notably, in the Supply & Demand Chain Executive survey, just under one-third (31 percent) of respondents said that their business-related use of social media Web sites was covered by a formal enterprise policy, directive or guidelines. A further 9.5 percent cited a formal departmental policy, while more than half (55 percent) said "no formal policy" governed their use of social media. When asked about the barriers to great adoption of social media as part of their supply chain processes, the top obstacle cited was "concerns over employee use or abuse," followed by "lack of clear business benefits" and "information security concerns."

Wilson points out another issue with leveraging social media tools on the job, the challenge of simply keeping up with all the different accounts on different sites. Facebook, LinkedIn, Ariba Network, Scribd, Twitter, Quora — who has the time to keep all your profiles up to date. "Are we going to have to have 'Master Facebook Management'?" Wilson asks, only half-joking. Even restricting on-the-job social networking to an internal company collaboration tool carries certain risks — namely, that once it becomes easier for colleagues to find you within the company, they'll actually want to engage with you, eating up more of your time. "We do find," Wilson says, "that once a procurement organization gets known for being helpful for doing bids, reducing prices and helping people meet their budgets, the floodgates open, so they need some way to manage that stream of requests for help."