I interviewed Richard Wilding who discussed Social Supply Chain Management.
( Apology for some background noise I interviewed Richard from my mountain cabin using Skype and forgot to mute, you will hear in the background some nature sounds :-) )
Can you provide a brief background of yourself?
Yes, Dustin. I'm Professor Richard Wilding. I'm professor of supply chain strategy at Crownfield School of Management. I also currently have a role of chairman of the Charter Institute of Logistics and Transport in the United Kingdom. That means I've got 18 and a half thousand members in the UK. Then there's 33,000 members worldwide. And those members are all professionals working in the area of the movement of goods and people, and they're associated supply chain. So it covers a very broad group of individuals.
And really, one of the things which is really quite interesting about institutes like this, charted institutes — it’s our 100th anniversary in just a couple of years in 1919 — it's about innovation. And that's what I to actually pick up on on this discussion with you today, Dustin. Because innovation to me, innovation is taking ideas which are new to you and create economic, social, or environmental value.So professional institutions and universities are key to creating innovation.And the social supply chain — and I'll define that in just a moment — is also critical in creating innovation within organizations. So that's a bit quick insight into me. I think you can find me on Wikipedia now and just google me. You'll find more.
Can you talk about what is social supply chain.
Yeah, so social supply chain... Social supply chain management seeks to incorporate the social network, social interactions, and so data to enhance relationship management with all stakeholders in order to maximize value in the final marketplace at less cost to the supply chain as a whole. That's the long definition I came up with.
But critically, what we're trying to do here is to use, if you like, social media approaches, social interaction. It could be data as well, big data from social media, really to really improve the supply chain, to maximize value for the customers, of course, but also reducing costs for the supply chain as a whole. That's really what we're trying to achieve with this.
And this sort of concept has been sort of ticking away for a while, but it's really starting to come into its own currently. The Financial Times a couple of years ago did some... There's an article just picking up on the use of social media within organizations. And they found that companies adopting social collaboration tools obtained a 15% boost in productivity — which that's pretty significant gains — by using such techniques. And also, what people are starting to find is that... I mean, there was some work done by Yammer, which is an internal social network. Some organizations might be using it. But they found that [inaudible 00:03:28] achieved 76% more visibility into other departments or locations when using Yammer.
So what it's actually doing is it's also enabling people to trade greater levels of transparency within the organization. They were also finding, for example, that it was getting a 37% increase in project collaboration. And 93% of business leaders agreed that these enterprise social tools stimulated innovation within their business. In other words, ideas were shared. And going back to my definition, innovation is all about taking ideas which are new to you and creating economic, social, or environmental value.
So this is something which is coming to a [inaudible 00:04:19]. And I think one of the challenges that we have is that many organizations still try to manage their supply chains effectively through emails. And I don't know if you're all like me, but I'm getting 100+ a day now of emails. And the problem is how do we know which ones are important and which ones are really doing well. What you find in your structure in your social networks, the important stuff comes to the surface, and it's much more sort of real time in terms of what's happening.
So that's an overview. I've got a couple of cases I could share with if you, if that would be helpful, Dustin.
Yes, that would be interesting.
Then just a couple of examples. In the United Kingdom, there's a group called Travis Perkins Group. And this is a pretty large organization. They're basic builders, merchants, and tools, and do-it-yourself outlets. Basically they've got about 1900 outlets across the United Kingdom, 24,000 employees. They have gone down the routes of just using Google. And so they're using Google apps.
One of the managers basically said, "Look. What we'll do is we'll set up with Google Plus group," thinking that probably in a few weeks this all would be forgotten about and nobody will move forward with it.
The initiative was called Availability Plus. What they did was they've got a Wix which is business-to-consumer. Wix is an organization I can pop into and pick up do-it-yourself stuff and everything else. What they did was they set up this Google Plus group. It's especially across their 200 retail outlets. And something very strange started to happen. People started sharing. What's great about Google, of course, Google Plus environment was that they all have Google mobile phones. So instead of people sending emails about things, they would take a photo and send it.
So in a store, if something arrived from a supplier and it didn't look great, or there was a problem with it, they'd take a photo. If, for example, the store management system was saying, "Look, this is not i] stock," they were getting quite angry. They would take the photos and send it through. The people in the head office were connected with this as well.
What used to happen was on supply chain or supply issues or store issues, it could take up to three days for a problem to be resolved in the old world of email. They're now actually getting problem resolution within an hour. And in fact, at the moment, there's a bit of competition going on within the organization. The last time I talked to them, they were getting proper resolution within 34 minutes quite often. So things like if something was supplied and it was supplied incorrectly, they had for example a set a screws which had a screwdriver within the package. So it had the screws and the screwdriver.It turned out that on some of the packages, they had an incorrectly sized screwdriver, so it wouldn't work together.
Now of course, that would be taken back to the store. The store would then put that on the Google Plus and ask all the other stores in the network, "Have you got a similar problem?" That way, they're being able to raise, improve customer service. They've been able to reduce costs dramatically. They've been able to create innovation because people do something great in a store. To display things, they take a photo of it, and then all the other store do it as well. They think, what a great idea. So what they've really found is that's made some massive changes within their industry.
One final little example, Dustin, because I know we're a bit short on time here, there's an organization called 2degrees. They're working currently with organizations like Unilever, GSK, Asta, and Tesco in the United Kingdom. What they're actually using is they've built a collaboration platform. And what they call it is fully-linked collaboration. And what this does is it's a proactively managed — if you like — social network. So what they're able to do is they measure exchanges of knowledge between the individuals in the supply chain. So if you're looking at, say, one of the big retailers, which they've when working with, they've got over 300 companies on this. It's called the sustain-and-save initiative. And they're getting massive benefits. For example, some of the data I've got from them within the last year of so... From having this launched, this initiative, 42 companies are saving £34 million pounds in operational costs. So you can multiply that by about 3.1 if you want dollars. They recon the total estimate is savings of over 100 million. And investments of about 16 million in various projects. The way this works is it's built around sustainability and saving money appropriately.
Somebody might say, "We're building a new warehouse. We want to have LED lighting. Somebody must have done this. Can anybody give us some advice?" And people are able to share that knowledge around different things. So once again, it's innovation. It's sharing knowledge to create value for the different parties. It's been a major success. And one quote from Barry Williams who is chief merchandising officer of Asta— of course, that's one of the Walmart companies, he basically has said the exchange is creating value, not extracting value from the supply chain. The measure of success is that people are already saving money.
And just an update on this, 2degrees have just launched an amazing new network, which is aimed at manufacturing, so it might be worth having a look at that link. So that's probably manufacture2030.com. And this is, once again, one of these big exchanges where people can basically innovate through them.
So we're finding social supply chain hitting the supply base. Of course, I could spend plenty of time talking a how we could use social data to interact with customers, delivery, of course, as well. So we're starting to good apps which are updating on delivery performance, things like that, particularly going to the consumer. All sorts of stuff which is going on...
And so I think we're going to see some dramatic changes within the way we manage supply chains, and we're also even finding that social media is being tapped into in supply chain risk as well.
But, Dustin, I just thought I'd share a final thought with you. This was a tweet I saw from a guy called @MattCutts and he basically says, "When you've got five minutes to fill, Twitter is a great way to fill 35 minutes." And an unknown tweet here which is, "On Twitter, we get excited if someone follows us. In real life, we get really scared and run away."
So I think the key thing about using these networks, understand they are different. You need to sort of dedicate appropriate time, but there's an also lot of interesting stuff going on in this area. I've got a couple of papers out about it. And I'm going to be presenting at quite a few conferences coming up around this whole area in more detail, if people want to come have a listen. And of course, you can find me on Twitter at @supplychainprof. So there we are. There's another social advert.
Thanks, Richard, for sharing today.
No problem at all, Dustin.
About Richard Wilding
Professor of Supply Chain Strategy @ Cranfield School of Management | Chairman @ CILT (UK)| Supply Chain Expert |