Social Media – the latest tool to mitigate supply chain risk?

Supply chain disruptions are never far from the news. The recent earthquakes in Japan may not have been near the magnitude of those which had such a catastrophic impact in 2011, but all the same they have had global consequences. Two major automotive suppliers had their production disrupted, one making body and engine parts and the other semi-conductors for engine control units. Not only was the largest Japanese manufacturer, Toyota, affected but production at four General Motors’ plants in the USA was also suspended.

That an earthquake in Japan can have such an impact on production lines many thousands of miles away is not news. The spate of natural disasters five years ago at various locations in the world put risk management front and centre on corporate agendas.

Of more interest is the technology being developed to provide managers with the information required to be able to react to these events as well as making their supply chains more resilient in the first place. Many of these involve the mining of Big Data which allows managers to assess their risk exposure and take mitigating actions if required.

In order to do this, technologies first employed in social media are being used. They combine the potential to integrate communication flows (such as those provided by Twitter) with value adding features created by developing communities (such as LinkedIn). The latter can allow cross-supply chain data sharing, but in a secure environment.

An example of one such company is Elementum which, in partnership with high tech manufacturer Flextronics, has developed tools to map the location of suppliers in a supply chain. The tool then undertakes global-scale analysis of thousands of sources, including social media, which alert managers to any potential disruption to a supplier or even a shipment. This means that decisions on a tactical level can be made on expediting or re-routing shipments. On top of this, at a strategic level, managers are able to mitigate risk by building networks of alternative suppliers.

One of the key benefits of such software tools is that centralizing supply chain data overcomes the typical siloed information systems and organisational structures which can constrain efficiencies both within a company and throughout its supply chain. Shared cloud-computing is fundamental to the ability to process potentially trillions of data points.

KPMG is another entrant in the market for supply chain risk tools. Its offering, ‘Third Party Intelligence’ has recently added earthquake and social unrest monitoring to its range of potential supply chain disruptions. Other issues to which its product can alert managers include weather, labour strikes or economic issues, such as a supplier’s financial difficulties. It characterises its offering as providing an extra layer of intelligence which assists decision-making by highlighting relevant avoidable risks by filtering data, trends and events.

Supply chain risk will be amongst the issues addressed at Ti’s ‘Future of Logistics’ Conference in London, June 7-8. Panellists from industry, academia and military will discuss the latest thinking in risk mitigation and how to deal with threats from a range of sources, including security, environmental and social. Find out how to secure your place at the event by following this link: 

Source: Transport Intelligence, 11th May

Author: John Manners-Bell