Social Media & Supply Chain Strategy

Disclosure : I am no logistics expert!

I was lucky enough to get a free pass to the Strategic Supply Chain Management Forum http://ow.ly/1dtXa organized by the Conference Board of Canada, in Toronto March 2-3, 2K10. Thanks to @JeffAshcroft, and the power of social media, I was able to gain some global perspectives, which I wanted to share with you. So, here is what I learned today, and these are my interpretations only, and do not represent those of the speakers 🙂

Top 2 Supply Chain priorities:

• Secure Supply
• Cost-effective Supply

Three Supply Chain risks:

• Economy – tighter credit markets, frugal consumers
• Social Unrest/Natural disasters – Iran/Nigeria (Oil), Chile (Copper)
• Technology – ability to keep up with the rate of change to maintain competitive edge

Ken Bradley, Lytica Inc. (one of the two speakers on this plenary session. James W. Lawton from Dun & Bradstreet was the other) was also of the opinion Environmental and Green Movement did not constitute as threats to the Supply Chain per se (based on restrictions imposed on CEOs on allocating investments – they’d rather not put money in initiatives that dont have an immediate impact on shareholder value…). He thought they were risks that will be incurred through legislation (like Ross Alliance in Europe), and once in place, all companies would be on a level playing field in terms of complying, and not lose their competitive edge…so not really a Supply Chain risk.

And here is what I enjoyed the most…. he talked about the accelerated rate of change, and the simultaneous reduction in reaction times to address (problems), through a nifty little curve – essentially an inverted half parabola (for golfers, think of it as a high draw), with time on the x-axis, and the “rate of change” on the y-axis. As the curve gets steeper (which it will, led by technology & computing power increases), the time to react is reduced exponentially, and hence the need to be ever agile in reacting, or better still, having predictive algorithms in place, for preventing disruptions in the Supply Chain, need to become standard practices.

On the Supply Chain financing side, there seemed to be 4 main drivers (considerations) :

• Reducing Cost, and Working Capital requirements
• Accelerated Cash flows
• Reducing Supply Chain risk AND
• Technology (which makes it scalable, visible)

Fergus B. Groundwater from Export Development Canada, and Philippa Fitzsimon from BMO were the speakers on the financing portion.

In both these sessions, there was a common theme with what we see in Social Media. Immediacy & Collaboration – the imperative to respond in real-time, and also to use a more inclusive approach in designing outcomes that fill a particular need – in this case making  sure the assembly line does not shut down because of a custom built screw that your sole supplier could not deliver on time, or avoid a 7 day or $68 million delay due to shopping carts not being there for simultaneous multiple retail store openings.

From what I gathered, SM is by far non-existent in the realms of Strategic Supply Chain Management. It seems they do not have the TIME, which again is a common refrain among hesitant adopters of  SM. However, successful companies will be those that have processes, and policies in place, to harness the power of the diverse web population as part of their overall early warning signal system.

What do you think? Are there any other factors that may impact Supply Chain & Enterprise Risk Management?

Cheers,

Prince