Do we really need a “social” supply chain?

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Social Supply ChainThere’s a lot of talk out there about supply chains “going social”. But what does that really mean? I recently came across a report from McKinsey that I had saved because I thought it raised some really interesting points.

In their “Building the Supply Chain of the Future” piece, McKinsey recognized that future supply chains will have the same information that they do now, but will use it very differently. An important piece of their argument is based on what is happening with social technologies. In today’s complex global supply chain environment, much of an enterprise’s value lies beyond its four walls. McKinsey found that the highest socially networked organizations are realizing competitive gains and performance improvements relative to their less networked peers. The more than 4200 global executives McKinsey surveyed found that boundaries among employees, vendors, and customers are blurring, and that social media is increasingly crucial for forging connections with customers and vendors and successfully navigating the external environment.

So let’s fast-forward a few years and assume that McKinsey’s trends continue. Can supply chains really become social, and do we even want a social supply chain?  From my experience at One Network I can confidently say “yes” to both questions. In addition to the benefits that McKinsey listed above, I can add increased working capital, decreased inventories, near zero system latency, and improved service levels as benefits of going social.

The challenge to going “social” is to successfully model the complex web of real-world relationships found in today’s supply chains. For example, consider the unprecedented success of Facebook. With a user base of nearly 1 billion and growing, Facebook is easily the most successful social network. But why did it succeed where MySpace and Friendster failed? One thing that Facebook got right and other competing social networks (e.g. Myspace, Friendster) did not, is that a Facebook user’s social network better reflects real-life interactions. In almost every case you become Facebook friends only after you have met them in real life. Facebook is successful because it lowers information barriers between people who have already demonstrated the desire to communicate with each other in the real world.

On the other hand, Facebook’s missteps have come when it has tended to be a too open with how and with whom its members’ information is shared. How often are you in the same room with your boss, college friends, co-workers, parents, and next-door neighbor?  In the real world, we allow these groups to access different kinds of information about ourselves and each other, and periodically Facebook has come under intense criticism because these groups are suddenly able to interact with each other in a way that seems unnatural.

Your fully-realized social supply chain can only emerge after the right balance is found between capturing the complexity of real-world relationships found in your supply chains without being too open. What kind of technology can enable this? The answer is a network-based platform that will allow each member of the supply chain to easily connect and share the right kind of information. To my knowledge, there’s only one technology that has been demonstrated to do this successfully—a many-to-many network.

What do you think? Please respond via Linked In or Twitter…

Aaron Pittman