May 14, 2012

Social media at Teva: how supply chains should handle the unexpected

The typical supply chain is a sluggish system, unable to quickly respond to change. Demand fluctuations cause shortages or gluts because procurement and ERP systems are inflexible. Some kanban and pull-based systems can be better, but even they can be jolted by the unexpected.

When disruptions in the supply chain occur, it takes people to solve the problems. But if they struggle with silos and barriers to collaboration, they can't do much. When social media flattens inter- and intra-organizational structures, the speed of communication lets people improvise solutions just in time.

Tony Martins, Vice President of Supply Chain at TEVA Pharmaceuticals, believes this to be true, and shares his insights in a great video produced by my new friend, Peter Carr, for his online Social Media for Business Performance course at the University of Waterloo.

Tony Martins and Peter Carr on YouTube

Tony Martins says that the significant supply chain connections are people to people, not system to system. We still need ERP and other systems to handle structured processes, the way the system is supposed to behave, all things being equal. But we know that all things aren't equal.

A supply chain runs into what should not have happened. Conditions change. If people can spontaneously gather around the problem, they can improvise quickly to set things back on course. Uncertainty is all around us, as asserted brilliantly in Mike Rother's work on Toyota Kata. No one can plan all the right steps. Sometimes they must be discovered.

Only if people have the means of connecting, and can quickly find  other people who have knowledge and access, those who can tinker with the actual vs. the plan, can they counter the disruption.

Collaboration is most effective if key players already know who's who and who knows what. When supply chain nodes are scattered around the globe, people aren't going to get to know each other at the microwave in the break room. Social media tools need to provide for profiles that index people's knowledge and interests so they can be found in an instant. They also need to have groups and communities where people can just hang out and get to know each other. Skype and video conferences can humanize the supply chain actors.

At Teva, they are beginning to manage supply chains socially. What's happening in your company?

1 comment:

David Bueford said...

Suppliers find it difficult to meet customer demand when customer is basically just flowing down MRP messages. This is just noise compared to a true Kanban program.


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