Crowd Sourcing: Social Media Enhances Supply Chain Agility

Crowd SourcingWhat is crowd sourcing, and how can it improve SCM?

Many of us will recall watching in awe in late 2010 as a fruit vendor in Tunisia set himself on fire, in protest against what he viewed as public humiliation inflicted upon him by a police officer.

His crime was selling fruit and vegetables without a valid licence. His dramatic action sparked what we now call The Arab Spring. Aided by cell phone cameras and the internet, protests in support of  26-year-old Mohamed Bouazizi spread from the town of Sidi Bouzid, Tunisia like a wildfire.

Within a few weeks of that desperate incident, President Zine El Abidine Ben Ali of Tunisia had fled the country, and his regime was in shambles. On January 14, 2011, the Tunisian government was overthrown.

Esraa Abdel Fattah, an Egyptian democracy activist known as “Facebook Girl” for her social media savvy, fought for a new Egypt. She was also an organizer for the major protest in Tahrir Square on Jan. 25. By February 11, 2011, the mighty Egyptian government, under then-President Hosni Mubarak, had been overthrown. Concurrently, protest began in Libya,which eventually led to the ousting of Moammar Gadhafi.

Leaders cannot afford to discount the power of social media, even within autocracies who seek to control the Message.

What does this have to do with supply chain management? Everything.

For the last 20 years or more, SCM has sought to bolster its tool box, with such items as ERP, Advanced Planning and Scheduling Systems, Warehouse Management Systems, RFID, Additive Manufacturing, and Transportation Management Systems, to improve efficiency and effectiveness of operations. We have been wildly successful.

So much of our success has been through our pursuit of speed and improved visibility. With the help of technology, we have opened up the notorious “Black Box” of Operations Management, and we can execute tasks which might have taken weeks or months in the 1960′s at virtual light speed in 2012.

But our weakness has been that much of what we do is retrospective in nature. When we plan and forecast, for example, we do so by spending 80% or more of our time looking in the rear view mirror.

Social media, however, promises to improve our sense of what is happening “on the ground”, right now, in real time. No longer do we need to wait for days or weeks or even months for financial data to come through our validation systems in order to respond to stimuli in the market. If we choose to pay attention to the technology, we can free ourselves act immediately – in short, we can become agile.

Writing for Business Excellence (, Karsten Horn explains the concept that is becoming known as Crowd Sourcing. It is a method by which market intelligence is gathered from a diverse set of participants through various social media, assisting organizations in resolving supply chain related problems.

Horn, of INFORM’s Inventory and Supply Chain division, uses effective examples to underscore the potential power of crowd sourcing. These include plans to monitor traffic and events surrounding the 2012 Olympic Games in London, identifying sales trends in particular locations, and recognizing stock-outs on retail shelves instantaneously. Action can therefore be taken “right away” (my old Customer Service Manager’s favorite expression) to either resolve the problem or take evasive steps to mitigate business risk.

Horn is careful to point out that crowd sourcing and similar methods rely on solid underpinnings of longer range planning and forecasting systems to deliver quality results. This is analogous to the ERP system that requires solid business processes upon which it can operate efficiently.

In my opinion, 2012 will see crowd sourcing become a key enabler for agile response and process handling; and CEOs and business leaders who begin to integrate it into their day-to-day operations will see the most benefit.

This means businesses must begin to establish ‘listening posts’ on various communication channels—such as the various social networks—to capture critical conversations that can drive process decisions within the supply chain. Managers must filter these messages and identify those with the greatest relevance to operations. For example, picking up on extreme weather alerts can help an organisation to react instantly and source alternative transport routes.

Crowd sourcing is an enlightening tool for managers to posses but it is equally as essential that companies are able to make informed long-term business decisions to support their longevity.

To do this, businesses need forecasting systems which provide accurate statistical information based upon historical sales and dynamic parameters that continue to learn. Additional information can then be layered on top of this base information to provide a clearer picture of likely demand. (Read more…)

CEO’s will ignore social media at their peril.

Their fates may be similar to those experienced by Mubarek and Gadhafi.

And that would not be a good thing.

For an enlightening review of the events leading up to and around the 2011 Arab Spring, I recommend this short artilce that appeared in December 2011 on  The Arab Spring: A Year Of Revolution

Finally, here is an interesting, albeit lighthearted video that explains crowd sourcing from a different perspective.

Your comments and feedback are appreciated.



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