Social media has changed the way human beings across the globe communicate with one another. Through websites and applications, like Facebook, LinkedIn, and Twitter, users can not only create and share content virtually but can also engage in networking. Although most people associate social media with personal communication, consultant Tony Martins believes that it can also play a valuable role in breaking down organizational silos to solve supply chain problems.
Martins began working with social media in the workplace in 2005, when he was a supply chain executive in the general pharmaceutical industry in Canada. He was so impressed with the potential power of these tools that when he left the pharmaceutical industry to form his own supply chain consulting practice, he decided to use social media as an integral part of his supply chain management methodology.
As part of his consulting practice, Martins has used virtual spaces to foster collaboration between different organizations, functions, and companies. This virtual collaboration has helped companies react faster to the many unexpected events that plague every supply chain. His current work is focused on helping organizations operate in the "now mode," (what others might call "in real time"), both in terms of handling unexpected events and processing regular business.
In an interview with Editor James Cooke, Martins discussed how social media could be put to work in any supply chain organization.
Name: Tony Martins
Organization: Tony Martins & Associates
Education: Technical University in Lisbon, Portugal, Bachelor of Applied Science in Civil Engineering
Business Experience: Vice president of strategic services at Halo Pharmaceutical Inc.; vice president of supply chain at TEVA Canada; vice president of supply chain at Ratiopharm Canada
How did you end up in the supply chain field?
By circumstance. Actually, I'm a civil engineer. For the first two-thirds of my career, I consulted in enterprise systems architecture and engineering with a particular emphasis in business processes. That expertise landed me a contract in 2000 at a paper company in Canada, Domtar, to design processes for supply chain management, and that got me into the field. After Domtar I consulted at a generic pharmaceutical company, where I was then invited to be vice president of supply chain.
Why do you believe that supply chain executives should use social media and social networks in their jobs?
All the supply chain executives I've met in recent years face the same challenge: what I call "supply chain disjointedness." The hardest thing for them to do is to synchronize all the parts of that chain, the various organizations and teams that the material flow goes through. You can see this problem between companies: suppliers that are late, stockouts, excess inventory, and so forth. You can see this problem inside manufacturing operations as well: materials not ready for production or quality assurance waiting for documentation that isn't ready.
Synchronizing the supply chain can be helped by using advanced planning systems, but systems can only do two things, really: produce plans that synchronize everything, and send you messages telling you that something went out of sync.
When unexpected problems happen—materials don't pass laboratory tests, delays occur at the border, demand suddenly surges—the flow of materials through the chain stops, and something is delayed. That is what causes things to go out of sync. At best, a system can send you a signal, but a system can't solve the problem that caused the delay in the first place. When you multiply this phenomenon across a vast chain with thousands of suppliers and millions of items, the challenge is nightmarish.
Only people can solve a problem that stopped the supply chain. But that too is a challenge, because invariably when there is a problem, it requires individuals of multiple skills to come together to solve the problem. If an operator on a packaging line for pharmaceutical tablets opens a barrel of tablets and finds them cracked, what can he do? He calls his supervisor, but the supervisor has to get a QA [quality assurance] inspector to come in and decide whether to inspect the tablets and then continue packaging, or reject the batch. If the batch is suspended, the supervisor then needs to figure out how to put another batch on the line. For that, he needs planners to change the schedule and the warehouse to prepare a new batch. And so on.
This is the typical situation with problem solving, and the challenge stems from the fact that people of different skill sets are stuck in silos—functional silos, regional silos, or company silos. Bringing them together by traditional means is very slow.
I've seen companies use escalation procedures as a solution to problem solving. But escalation is a speed trap: The higher issues go in the organization, the slower they move. To solve a problem that demands multiple skills, you actually need the issue to move sideways, not upwards.
People also use meetings—oftentimes standard, repeatable meetings with all these directors meeting every week—to solve problems. But meetings aren't just slow, they are productivity busters. I spoke to a director who showed me that when he begins the month, 60 percent of his time is already booked in meetings.
Social media offers a solution to all these traps of the classical organization. With social media, we can implement a social model of collaboration. In the virtual space provided by social media, people can easily reach each other across silos, independently of the hierarchy. When social media is used to solve problems, we see people of multiple skills react spontaneously to posted issues. And the stream of conversations that ensue on the posting of problems leads to solutions that are extremely fast, compared to classic methods [of problem solving].
Supply chain executives should look at the social model of collaboration that can be enabled through social media as the most significant strategic weapon in supply chain optimizations today. It liberates them from the rigid framework of functional structures and client-supplier relationships. It is the best way I've seen to keep the supply chain moving quickly, in spite of the many problems that will always occur.
How can supply chain executives use social media in their operations?
Over the past 10 years, I've used social media to solve unexpected problems in operations and found certain strategies that work well. From that experience, I derived a model that I've been using in my consulting assignments and that has been systematically successful.
It's called the "hive model." A hive is a community of individuals of multiple skills who have the responsibility of solving issues within a specific scope. Individuals in a hive are empowered to make decisions using their knowledge or, when needed, by "poking" senior managers to "come in" and make decisions the hive cannot make.
In this model—which is a social model for the workplace—individuals don't go "upwards" to escalate issues; they call managers to come "downwards" and help solve the problem when and where the managers are needed. It is what I call "reverse escalation."
But what is the scope of a hive, and how many hives should there be? First and foremost: a hive is not a functional group. A universal principle I've learned over the years is that, generally speaking, collaboration isn't needed within a functional group, it is needed across skill sets. So, you should not create functional hives.
The scope of a hive equates with a mission or a goal that produces results that are significant to a customer. It is the reason why you can't have functional hives: No one functional group produces anything that is significant to a customer, not by itself.
One example of hives and their missions would be maintaining a high service level for customers of a specific market segment, which would involve individuals from customer service, product management, sales, and supply chain management (SCM). Another example would be achieving and maintaining fast delivery times for finished goods. That would involve people from SCM, warehousing, production, quality, and purchasing. A third example is the launch of new products on time. That would involve people from research and development, regulatory, finance, legal, SCM, customer service, product management, and sales.
In very large enterprises, these would be examples of types of hives rather than hives as such. For each type, you could have multiple hives. For instance, for the customer service example, you could have a hive for Canada, another for the U.S., another for the U.K., and so on. In the delivery-time example, you could have one for products coming from the plant in Goa, India, and another for the Ireland plant.
At times, the same people appear in multiple hives, and they play important roles in keeping the network of hives coherent. For instance, in the previous examples, the customer-service hives would be market-centric and the delivery-time hives would be plant-centric. In both, the people from SCM would function as the link between the two sides of that "matrix."
Can you give me more examples of how social media can improve supply chain flow?
As supply chain executives, we want to see the flow of material running smoothly, uninterrupted, and following established plans and schedules. If you use good practices and systems, you begin with a plan where all the steps of the chain are synchronized. What causes the flow to be interrupted and the chain to go out of sync are unexpected problems and events.
Unexpected problems can only be resolved by people (not systems) and invariably require individuals of multiple skills and roles to intervene together in order to solve these problems and unblock the material flow. The great obstacle to this coalescence of multiple skilled individuals is the organizational silo—whether it is the functional silos within one organization or the boundaries between organizations.
When you place individuals of multiple skills and organizations inside the same virtual space, you liberate them from the silo "prison," and they spontaneously and rapidly construct solutions to problems. This is something that some may find difficult to believe but which we see happening every day—for instance, in natural disasters when volunteers come together and start acting without any direction. I have seen it working personally over the past 10 years across 20 different companies, and it's beautiful to watch!
Thus, the solution to interruptions in material flows is to group people of multiple skills in virtual spaces and let them solve those problems. These groups must be centered around broad business goals. You must never group individuals in the virtual spaces of social media by skill or corporate affiliation because you would just be moving external silos into the virtual media—which would be self-defeating.
Why do you think so few companies are using social media in supply chain management?
The purpose of social media is to network people, to foster collaboration. Most companies have functional, hierarchical organizations, a corporate model established in the late 1920s by J.P. Sloan. Functional structures are, in and of themselves, anticollaboration, and they make it difficult for the social model to permeate the enterprise.
The functional hierarchy is a command-and-control model where everything everybody does is prescribed, predictable, and controlled by a few individuals at the top. It is the ideal model if an enterprise is to make lots of volume of a few things and it has control over its market. It worked perfectly as long as the economy was product-centric.
The social model has been emerging for the past 10 years and is based on completely different premises. For instance, it believes that there are a lot more people at the bottom than at the top, and therefore problems can be solved more rapidly at the bottom of the organization. It fosters the capacity of individuals in a community network to spontaneously construct solutions to problems or even to invent new processes, without any specific direction from a senior manager.
In the social model "plans of action," or POAs, are not made up front by a smart manager. They are developed progressively by a community that plans and acts at the same time. It's "organized chaos," something the hierarchical model dreads.
In the traditional functional model, communication is formal, actions obey established protocols, and ways of doing things are specified in detailed, controlled procedures. If you want to change how things are done or, worse, by whom, you have to go through the pain and the time [commitment] of changing the bureaucracy of a controlling structure—[you have to] change detailed procedures, go through long approval cycles, change job descriptions, and change organizational charts.
In the social model, roles are defined with clarity and simplicity. Communities are directed to broad but very clear, tangible goals, and individuals are free to figure out as communities how to get things done, leveraging their multiple skills and competencies.
The difficulty we're seeing with social media penetrating the core of enterprises is the difficulty of a command-and-control model migrating to a social model. But it will happen. By 2020, only 25 percent of the work force in North America will be "baby boomers"; most of the rest will be Generation Y and Z. [That's when things will change.]
How could social media transform supply chain operations in the future?
Supply chain management is the only real horizontal functional group at the core of manufacturing companies, if we exclude project management. It plays a very helpful role as the coordinator and "synchronizer" of all the pieces of the "puzzle" but suffers from having no real power [to impose] upon any of the doers of the chain and from the agonizing difficulty that disparate "silos" have in working together efficiently.
For SCM executives and professionals, social media is a godsend. I suggest that SCM practitioners are in the perfect place to insert the social model in the enterprise and between their enterprise and other supply chain partners and customers.
To leverage the power of the social model, SCM executives need to think less about systems, data, and procedures and need to focus on the power of getting people of diverse skills working together to solve problems.
In the past year alone, I lived through two experiences in two completely different companies, one small and one large, where I was asked to help improve the efficiency of the supply chain and to improve service levels. Contrary to what I would have done 10 years ago, I focused on getting people to work together, more so than on processes. Processes are just a frame of reference that helps everybody think coherently. They bring coherence to the workplace, but they don't make the workplace work fast.
The social model is extremely powerful because it doesn't need people to do anything new or anything they don't know how to do. Instead, it is an easy undertaking, because all you do is liberate people from silo boundaries so that they can do what they are already able to do. What can be easier?
In essence, then, SCM operations of the future should be social-intense rather than process- or systems-intense. Processes and systems will form the base upon which people will do work, but managing and coordinating the supply chain will be more about the ability to master the social model, to strategize the best arrangement of hive communities, and above all, to be able to do so across enterprises.