The role of social media in supply chain risk management

A study conducted by Accenture found that supply chain risk management is seen by companies as a priority.  Seventy-six percent of companies who participated in the survey described supply chain risk management as important or very important, and 25 percent of respondents reported that they are planning to make increased investments of at least 20 percent in supply chain risk management in the next two years.

Social media is one place where an investment should be made.

Social media is not just for kids.  Social media is not just for socializing.  Social media is a business tool that can play an important role in supply chain risk management.  Here are three reasons why your company should invest in social media.

News in real time

Social media is the new “newswire.”  It has supplanted the AP, Dow Jones, and Bloomberg for breaking news.  The earthquake in China, the Boston Marathon bombing, the death of Obama bin Laden, and the engagement of Prince William to Kate Middleton were all stories that broke on Twitter.  Stories that played out over social media include the horsemeat scandal and Apple’s China supply chain sage.

When it comes to supply chain risk management, knowing what is happening in real time is vital.  Whether it is learning about an earthquake that happened near your manufacturing facility, or monitoring the path and intensity of a hurricane – real time information will enable your company to make more informed and timelier decisions on how to manage or mitigate risk.

Identify emerging risks

In addition to providing timely information on events such as natural disasters and terror attacks, social media is a tool that can be used to identify additional risks to your company and supply chain.  Specifically, social media can be used to identify risks such as weak links in your supply chain, missteps made by a supply chain partner, and customer concerns/dissatisfaction.

Managing and mitigate risks

A survey found that 89 percent of consumers began doing business with a competitor following a poor customer experience.  The survey also found that 50 percent of consumers give a brand only one week to respond to a question before they stop doing business with them.

 Social media is a great tool to provide customers with a great customer experience – fast.  By engaging a dissatisfied customer over social media, listening to their concerns and addressing them – you are more likely to retain that customer and gain more customers. As the adage goes: “It is less expensive to retain a current customer than attain a new customer.”

Additionally, because social media allows for information to be distributed to a large number of people instantaneously, it is an effective tool for letting customers and partners know you are on top of an issue, or for altering them of an upcoming disruption.

When it comes to supply chain risk management communication and information is vital – social media is an effective tool to add to your company’s risk management toolkit.  Get your company off the social media starting line.

This was previously published on Electronics Purchasing Strategies.