How Social Software Boosted Our Supply Chain ROI - InformationWeek

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How Social Software Boosted Our Supply Chain ROI

Social software helped TEVA Pharmaceuticals shrink its manufacturing cycle time by 40% between January and April -- when the company's Oracle ERP apps couldn’t keep up with unpredictable market conditions.

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Between January and April, the application of social software helped TEVA Pharmaceuticals shrink its manufacturing cycle time by 40%, and it's likely to shrink by another 40% by the end of the summer.

Enterprise 2.0
At Enterprise 2.0, a UBM TechWeb event in Boston, TEVA Canada VP of supply chain Tony Martins gave a short presentation as part of a keynote with Tom Kelly, CEO of Moxie Software, and a longer one Wednesday afternoon. The social software implementation is, so far, a regional implementation at TEVA Canada, a division of the Israeli manufacturer of generic drugs that also serves the U.S. market.

TEVA already had structured applications in place built around Oracle's enterprise resource planning (ERP) and supply chain software, but they worked best at executing predictable processes, Martins said. Unfortunately, TEVA's business had become unpredictable because of everything from shifting consumer demand and changing regulation to recent drug shortages that have been causing chaos in the market, he said.

TEVA is in the business of buying raw materials from companies as far away as India and Canada, mixing those materials according to a precise recipe, encapsulating them in pills, packaging them, and selling them through distributors. Things can go wrong at any stage of that process. Dealing with exceptions manually was acceptable when they amounted to maybe 10% of the business, but they were becoming more frequent, Martins said. "We found ourselves living in the world of 'not supposed to happen' where more than half the time managers, supervisors, and key resources were handling surprises--things that were off script."

Whenever a business process didn't fit neatly into an ERP application form, the resulting problem would have to be addressed manually, Martins said. Operations managers might not even find out right away that something had gone wrong, and while the message worked its way up the chain of command, precious time was lost.

Martins took his answer to this problem from the book Wikinomics, which introduced the concept of "spontaneous association," or the ability of people to come together quickly to solve a specific problem.

Once TEVA introduced Moxie's Employee Spaces, Martins said, convincing employees to share their work issues more widely was challenging at first. Also, not all employees were used to the social style of interaction, and even some of those who had Facebook accounts for their personal lives were puzzled about how to apply the same techniques to getting work done. But they learned to do it once they saw it produced results.

"Invariably, the person who has the problem is not the person who can solve it," Martins said. Just by giving people a way of posting unexpected issues and allowing others to reply with suggested answers, he found problems were resolved much more quickly.

In addition to applying social software internally, Martins has created joint social communities with some key suppliers of raw materials. In one case, this resulted in a 15% reduction in lead time, while in another, where the social integration went deeper, the supplier cut lead time by 60%, Martins said. He also has plans to implement social communities for TEVA customers.

Sameer Patel, a partner in the consulting firm Sovos Group who facilitated Martins' presentation, said he was excited about the session. "I've been trying for over a year now to find a good supply chain case study," he said, believing it to be an area that's ripe for a social shake up.

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Steve Christensen
Steve Christensen,
User Rank: Apprentice
6/27/2011 | 4:56:29 PM
re: How Social Software Boosted Our Supply Chain ROI
Change is constant and pervasive. TEVA's experience is common throughout the world of business. Rigid, heavy enterprise applications such as ERP were not intended to be responsive. They simply can't keep pace. The workarounds that TEVA performs exist in every corner of every business. Often the changes in regulations, compliance, global economic conditions, suppliers, customers, demand, products and markets become permanent.

Social networking has shown the value of collaboration and communication. It has also shown us the value of 'pop-up' IT. As consumers we enjoy more technology at home than we do at work. Social networking has demonstrated that complex 'enterprise' solutions can pop-up with very little effort, expense or user training. Moxie provides the secure aspects business demands to have the collaborative discussions. But it doesn't fill the "gap" that exists in the enterprise.

For that, business needs agile, light enterprise applications that embed the requirements of the legacy applications and communicate interactively with secure social networking such as Moxie. The workarounds of an ERP are tied to the process, data and technology of the ERP. As change arises and as it becomes permanent, these three elements cause the gap that requires a workaround. Agile, light enterprise applications de-couple the process, data and technology (PDT) of the ERP or other Legacy Applications leaving them untouched so their consolidated view of financials and compliance remain.

With PDT in hand, agile enterprise applications can improve a process, add required data that is missing and utilize any technology available. In a matter of hours, pop-up enterprise applications can be available to employees, vendors and customers. By filling the gaps, less and less of the work anyone has to do is reacting to emergencies. Collaborative teams can be assembled that improve the visibility, accuracy and efficiency of all the underlying transactions of a Supply Chain. The gaps that exist inside of a company are many. The gaps that exist between the ERP's of your many suppliers and customers are legend.

Secure, social networking software can facilitate the conversations necessary to close the gaps, agile enterprise applications fill them and together they deliver a Social Supply Chain as the new enterprise Apps interact with teams.
User Rank: Apprentice
6/23/2011 | 6:47:22 PM
re: How Social Software Boosted Our Supply Chain ROI
I'm a little reluctant to give the social software the credit so much as the managers who realized that people sharing problems is better than trudging through difficulties on their own. The same smart managers should be actively wondering how to capture and re-share all that knowledge that's being shared willy-nilly. I believe the problem that might surface next is a failure to distill enduring solutions out of the social fog that all the chatter can engender. This is called knowledge management - something that socializing tools are not renowned for.
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