Supply chain social media

Juniper Innovations TwitterMost people are familiar with, or use social media these days  in one form or another.  With usage on the rise, can social media be exploited to help improve supply chains?

In his blog, Luciano Cunha makes the point that social media could tighten supply chain links through a better connected experience.

We agree.  Social media can bring supply chain links closer together in a number of different ways.

1. Real time consumer information visibility

Updated Facebook comments or new Twitter Tweets can give demand indications.  In theory, Luciano comments that if social media data is aggregated and combined quickly, it could be used to produce demand forecasts.  As Luciano points out however this is simply one method to produce a forecast.  It isn’t based on actual purchases and therefore real demand.  Therefore forecast data needs to be analysed and produced carefully.  It needs to be used alongside other demand and forecast data.

Additionally further issues must be considered.  Quick and sometimes off the cuff social media comments can be misleading.  For example Tweeting about buying a pair of jeans may not be any indicator whatsoever about product purchase if precise brands, sizes, colours or volumes aren’t discussed.  Plus the Tweet may not relate to a specific purchase location i.e. supply may not be readily available to meet real time demand, where real time demand is “now” yet supply lead time could be days later or longer.  Social media can be all about the here and now and consumers may not be willing to wait to purchase in this case, a pair of jeans.

To help consumers and as an example of countering this real time problem, in yesterday’s blog “disruptive barcode scanning” we wrote about being able to locate products by essentially scanning a barcode then having a software program do an automatic internet search, to locate the same or rival products nearby.  This might enable the consumer to quickly find and purchase the pair of jeans they require.  For the fortunate retailer selling the product they would then potentially have analysis between any social media forecasting they do and actual buying behaviour i.e. real demand.  For all other retailers however there is no shared correlation between social media forecasts and buying behaviour.

Luciano also makes valid points about understanding data in what he calls the China paradox.  In this case to understand:

  • Customer segmentation across all markets e.g. demographics, seasonal buying habits and locations
  • Cultural pecularities when using social media e.g. China trust social media and therefore drives more traffic to retail websites

Understanding some of the advantages and disadvantages of using social media data to forecast demand however isn’t simply a theoretical model, as delayed buying activities below show.

2. Delayed buying activity

Interestingly Luciano points out studies that show spikes in social media activity have resulted in buying behaviour 3 months later.  This is possibly from early adopters buying products then recommending them, leading to delayed purchases from others using social networks.  Analysing this data further could affect supply chain strategy, fine tuning forecasts, improving buffer stock and retail stocking and replenishment policies for example.

3. Driving supply chain innovation

In Juniper Innovations’ recent blog about “Accelerating Supply Chain Innovation,” sharing information freely across the supply chain was seen as a way to drive ideas and improvements.  Social media can be used as a vehicle to help.  In his blog Christopher Sciacca gives examples of where and how this can be the case, for example using:

  • YouTube videos to improve processes such as loading fork lift trucks
  • Twitter to keep procurement colleagues informed of new suppliers

So using Social Media to improve supply chains is more than just a few ideas and theories.  You can use it today.