I recently read an interesting article in the Financial Times that discussed how social media and big data are being used to help solve supply chain issues and improve supplier management practices at a number of large companies.
This article asked thought provoking questions such as “Can social media reduce the price that a retailer pays for bread?” and “Can big data help a manufacturer reduce hundreds of thousands of dollars worth of waste?” The article provided excellent examples of how organisations are beginning to use big data and social media across their supply chains.
What the article failed to cover however, was the value-adding potential that both social media and big data have for procurement.
Talking more with experts at Proxima, various procurement practitioners in the industry and my LinkedIn network, I was able to group together 3 reasons why social media is important to procurement (I’ll explore the benefits of big data in the next post):
One of the major reasons that companies use social media is for customer engagement. For procurement however, using social media to engage with suppliers is an increasing trend. Connecting with suppliers on platforms such as LinkedIn, and Twitter provides not only an easy and fast way to connect with suppliers on mass, but can keep procurement up-to-date with the latest news around their suppliers. The informal setting makes it easier to impart a sense of personality into the communication; forging relationships, promoting open dialogue, and in turn, building trust. Creating these intimate relationships help to build a reputation as a customer of choice.
Knowledge sharing and innovation:
Whilst the traditional social media tools have undoubtedly been helpful in assisting procurement practitioners share knowledge and ideas for a number of years; new social network sites aimed specifically at procurement professionals (Procurious, CorporateBrainz etc.) will not only increase the depth of knowledge being shared, but also the ease with which ideas are imparted and knowledge is found. For procurement professionals; being able to absorb new ideas and guidance from other professionals outside of their organisation is often crucial for driving innovation and building a competitive edge. However, with promoted tweets, bots, fraud and self-promotion, the trust that comes from online testaments is constantly being called into question. Caveat Emptor holds true, even more so now. Do further due dilligence in regards to information gathered on social media, and remember that just because something is written down, does not make it true. On a more positive note however, there are a number of stories beginning to circulate of companies setting up bespoke social media platforms to connect customer R&D departments and supplier R&D departments to encourage idea sharing and customised innovation - a sure sign of things to come.
Real time information:
Recent studies show that around a third of us now turn to social media for our news. In an age where everyone has the ability to be a publisher, traditional news outlets are experiencing a decline in readership. Consumers are increasingly turning to social media feeds which highlight only the most popular news and discussions tailored directly to the user - thanks to a range of complex algorithms. For procurement, the ability to monitor news and information in real-time is invaluable. News around suppliers, innovations, product recalls, and supply chain disruptions shared by peers is often easier to find, and more accessible on social media networks. Having a real-time view of not only your suppliers, but also the wider industry, can be used to identify issues quicker, enabling you to react before your competitors, and often before the effects are felt downstream in the supply chain.
Clearly then, social media is an increasingly important tool not just for the supply chain, but also for procurement. For those who chose to use this tool effectively, the opportunities to build and maintain stronger, more collaborative and more informed relationships with suppliers can be vast.
Please use the comment box below to let us know ways in which your procurement team has utilised social media, and whether you think its importance will continue to grow?