Monday, January 27, 2014

“Sharing is caring” - Is it true for supply chain management?

The enormous growth of Facebook and Twitter users has proven that people do not mind ‘sharing’ things online even though they don’t really share too much in real life. This phenomenon even gave rise to a new term ‘shareconomy which is a sustainable economic system that lets people share various assets ranging from cars to apartments to economy.

Social Media and the Market:

The concept of sharing information by internet users is very useful for the companies because 44% of these users provide their experiences/opinions about the product/service. This gives rise to a huge pool of ideas and customer specific information online which the companies can analyze using Big Data and Data Mining tools. Lot of companies have already started this process which facilitates them to integrate the customer in the product development process. This phenomenon is called “crowdsourcing

Is Crowdsourcing the new Outsourcing?             

Lot of innovative startups including Sourcemap have introduced a variety of tools using Social Media and Analytics to crowdsource and help organizations map and visualize their highly complex supply chains more effectively. Companies usually struggle with mapping their supply chains when they get to second or third tiers and these tools can help them do this thereby adding strategic and operational value.

There’s been a lot of activity in this area in the recent years. In 2010, The Hoop fund was established by a group of entrepreneurs and leading sustainable brands. Their goal was to bring consumers and producers together, crowdfund microloans to producers and transform the sustainable value-chains into platforms for customer engagement. The Hoop engages customers as mission-aligned lenders. Eventually, customers become become loyal brand champions by supporting the farmers and artisans who make their favorite products.

                                                                   The Hoop process
Brands have gone all the way into the crowdsourcing arena by venturing into launching their product shoots on Instagram( a popular photo sharing social network).

Success story: Unilever crowdsources!

Unilever adopted a crowdsourcing approach, inviting all stakeholders, not just NGOs and governments, to take part in the effort to find the ways to meet its goals. They introduced a new “open Innovation platform” to gather and assess ideas from external sources. They also initiated the “Sustainable Living Lab”, a 24-hour online dialogue to discuss about the challenges Unilever is facing and to create new ideas thereby allowing all the players to share good practices.

 Unilever’s current objective is to reduce its carbon footprint by half. But on the discussion forum, the major problem discussed was changing customer behavior. Reducing Unilever’s footprint means changing 68% of their customers’ footprint but how do you do it?
How to convince people to wash their clothes in lower temperatures or use less water when they shower?
And how do you integrate Unilever products into the process of shifting consumers to a more sustainable behavior?
These questions remained unanswered but Unilever proved that they can not only draw an impressive roadmap but can also follow it.
The following video shows Unilever’s ambitious sustainable living change initiative:

I'm really interested to know to what extent will Unilever and its customers achieve their goals of sustainable living.
Unilever successfully employed crowdsourcing. I found their supply chain maps on
Which included various players and they provide comprehensive information about the flow of their supply chain to each other.
Public supply chain of Ben&Jerry’s(Unilever product) on Clicking on each node gives information about the manufacturer/distributor/exporter/importer etc.
But to gain the strategic advantages, businesses require forecasting systems that provide accurate statistical information based on historic sales and dynamic parameters which learn continuously. Data obtained from crowdsourcing can then be utilized for supporting and verifying suggestions given by forecasting systems. This will enable supply chain managers to improve the flexibility of the supply chain by keeping current and future planning parameters up to date. More reliable information should increase availability, improve optimization of stock levels and allow you to confidently make the most appropriate planning decisions.
I strongly believe that the businesses should become more “social” in their approach to supply chain management.

What do you think?


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