Whilst the concept of social media has taken off amongst consumers, it has much to offer business-to-business platforms that are serving interdependent communities yet remains underexploited. Dr. Uli Heindl, founder and CEO of Global Traceability (GTS), observes:
“What social media phenomena like Facebook and Twitter, and indeed companies like Dropbox, teach us is how to build networks quickly, easily, and efficiently. That is an ability that lends itself well to the challenge of connecting up a complex supply chain.”
The benefits of adopting a networked approach are most clearly evident when set against the traditional way of collating and sharing traceability and compliance data up and down an international supply chain.
“Some supply chains are simple; they can be drawn on a piece of paper. However, others are extremely complex. When it comes to sustainably sourcing a lot of materials through international trade, you have to go into a lot of detail. The timber and paper industry, for example, contains considerable complexity.
In a global FMCG company we are working with, we have found there’s an incredible level of complexity in the supply chain. And this is where traditional chain of custody systems and corporate information systems such as ERP fall down. It is extremely hard to get all the suppliers in the supply chain onto those systems without having a physical presence and setting up software locally for them to report back to their customer. Cloud technology provides an environment which is accessible to everybody.”
To illustrate his point, Dr Heindl points to the sustainability challenge that faces the FMCG company. He recalls reviewing a publication on sustainability recently which describes the company’s current state, and where it wants to get to by 2020. One particular ambition is around the batch level tracing of palm oil. The company currently purchases palm oil on the open market, and then buys certificates that relate back sustainably produced of palm oil crops.
The certificate demonstrates that a batch of palm oil was produced sustainably somewhere in the world, which can then be held against oil purchased on the open market. However, there is no batch-level traceability i.e. an attributable link between the certificate and a specific cargo of palm oil. The certificate demonstrates a commitment to sustainable production, whilst overcoming a perceived market challenge around batch level traceability.
“The ambition is to switch to batch level certification. But how can you do that? Normally the plantations have IT and an internet connection so they can easily plug into a cloud solution. The plantation could be fitted into the network of relationships that represents the company’s international supply chain, thereby achieving the company’s ambition.
In this type of situation we can learn a lot from social media – not through provision of tools to enable, say, messaging each other – but more from the Facebook.com concept of ‘making friends’ with people. It is possible to connecting up the supply chain and facilitating the flow of information by enabling members of the ecosystem to organically link together – providing visibility of ‘who supplies to who’ within the whole chain of custody.”