Social media is providing a key link in the new generation of cloud-based supply chains. Cloud-based supply chain management (SCM) platforms have been around for more than a decade now, although they haven't always been described as such. In recent years, though, this kind of software is starting to be built with social media capability as a central pillar. Companies with long supply chains that need to communicate with myriad partners across the globe are recognizing the unique contribution social media can make to the dynamic supply and demand loop.
Case study #1: Indigo Books & Music
California (US)-based Moxie Software Inc. provides an Amazon-hosted cloud solution, chock full of social media tools, to Indigo Books & Music Inc. in Canada. The platform includes profiles, activity feeds, micro-blogging, and forums, among other things.
Previously at Indigo, the company communicated using a battery of methods, each of which had certain downsides when it came to the fast-moving supply chain, wrote Michael Smyth, director of service and sales at Indigo, in an e-mail message to ComputerWorld Canada.
"We have creative, talented leaders spread out across a vast geographical area," he wrote, "but with no central means of capturing their ideas and feedback. Traditional means like e-mail could move information, but could not capitalize on spontaneous dialogue or collaboration; conference calls or meetings forced users to contribute on someone else's schedule, or not at all."
Moxie’s enterprise-focused software, Employee Spaces, was the answer, wrote Smyth. The new platform allowed the company to consolidate its internal lines of communication and incorporate customer feedback into its product development.
"We needed a tool that would allow us to provide information vital to the project directly to the participants; at the same time, we had to have a way to capture our field staff's feedback on any technical challenges, and the customer reception to the new product. Moxie helped us deliver both, through one view."
As a cloud-based solution, it also allowed for increased employee mobility, both in space and time, and across different systems, he says.
"Having a tool like Moxie, which an employee can access on their own time and in a place of their choosing, allowed the widest possible participation and still promoted connections between our users. That flexibility and potential went a long way to winning advocates."
Employee Spaces was received enthusiastically by Indigo staff. Part of the reason for its widespread adoption at Indigo was its relative ease of use, says Dennis O'Malley, Moxie’s vice president of services.
"We never touched anything with those guys. We were never on site. We never provided any extensive training to anybody other than Michael. It got 99.9 percent adoption within three months and they continued to expand the usage."
Ease of use is indeed one of the biggest reasons enterprises adopt cloud-based supply chain systems, says Gartner analyst Michael Dominy. "They can typically be activated more quickly than the traditional supply chain applications," he says.
Case study #2: SAP Supplier InfoNet
Moxie, however, is a relatively small software company, at least when compared to the likes of SAP, one of the world’s leading providers of enterprise supply chain software. In January 2012 it launched a cloud-based platform, SAP Supplier InfoNet. SAP says it will take business analytics to a new level, providing better, faster business intelligence through the use of benchmarks and alerts, which depend in part on social networking. Supplier InfoNet also makes use of social media for what it calls "multitier network visibility," which it says can "expand your view of risks that may exist in the subtiers of your supply base… [by requesting that] your top-tier suppliers provide visibility into subtier suppliers" (source: SAP Supplier InfoNet Solution Brief [PDF download]).
SAP InfoNet can also harness the power of social media in the form of a dynamic performance review process:
SAP Supplier InfoNet collects and aggregates supplier performance information from multiple participants in the business network and creates performance benchmarks. The solution also ensures that the data is anonymous, protecting the confidentiality of participating companies. You can view how a supplier performs against a specific metric and compare that to the same KPI [key performance indicator] performance for other customers in the network. You can view percentile rankings for all suppliers in the network and identify specific areas in which your suppliers need to improve.
Other companies without platforms like Employee Spaces or Supplier InfoNet are still using social media in the supply chain, says Dominy. Customer posts on popular sites like Facebook or Twitter can be monitored and collected for further review: "Getting something that’s happening out on the social networks relative to your brand, feeding that back into the supply chain processes on customer service and support, in particular, so you can potentially identify problems more quickly and then take corrective action,” he explains.
"The other piece," Dominy adds, "is taking that same kind of insight, what’s happening in the social context and feeding that back into your product development process so they can innovate or change a product."
Dominy says the cost savings associated with cloud-based supply chain management can be very attractive to companies, both large and small. But he warns that businesses with their own systems in place should look at the bigger monetary picture before migrating to the cloud.
"Companies really need to make sure they compare the total cost over time…usually five, to seven, to ten years, over a traditional application," he says. "It may turn out to be, even though it’s low per user or low per transaction cost… more expensive over time, the SaaS-based or cloud-based solution."
Conclusion
It seems fairly certain that one thing will hold true in the future: cloud-based supply chain solutions will become more affordable. As more supply chain management goes to the cloud, social media tools will naturally follow. Companies like Indigo will have increased incentive to experiment with, and eventually adopt, a cloud-based supply chain solution that directly incorporates social media functionality.
Smaller software firms like Moxie will thus pose a challenge to more established supply chain management software companies like SAP that cater to enterprise. With SAP's introduction of Supplier InfoNet, it is clear that the larger players in the supply chain software industry are beginning to recognize this.
Brian Bloom is a staff writer at ComputerWorld Canada, covering enterprise infrastructure, information architecture, and enterprise software topics. Previously, he worked as a communications consultant, writing, editing, and translating scientific and technical material, primarily for federal government agencies.