Bringing social media to supplier management – Rolls Royce talks LeanLinking at the CPO Event

Continuing our series featuring some key presentations from the recent CPO Event, and Richard Beaumont, VP of Central Purchasing at Rolls Royce, talked about how the principles of social media are being used in the firm to improve supplier management practices.

I found this fascinating. For a couple of years now, we’ve seen conceptual discussions around how social media thinking would find its way into mainstream procurement practice, driven by the younger generation coming into the workforce – a generation that sees social media as a core part of their lives.  But it’s fair to say there has been less hard evidence of real action and implemented programmes. However, the Rolls Royce example appears to be a genuinely innovative idea actually put into practice.

Rolls Royce has run a supplier management programme for some time. Performance information is gathered from various internal contract managers and other key stakeholders to assess the performance of key suppliers via an “Integrated Supplier Scorecard.” It’s a good and sensible approach, but has some significant drawbacks. Key amongst those is the time delay in the process. By the time information is acquired from around the business, verified, collated, moderated, shared with the suppliers ... basically up to 12 weeks, almost another full quarter can have passed by before real action can be taken about the previous quarter’s work.

So Beaumont asked a small team of graduates -- his ‘bright young things’ -- to look at the issue. After some process mapping and thinking about how social media might help matters, they came up with the proposition that it should be possible to get to an end point of good information to be shared with suppliers within days, not months. The vision was to pull metrics from various systems, use social networking-type tools to build a qualitative commentary, share around Rolls Royce and with suppliers, including via apps on mobile devices.

Now Rolls Royce is working with a small Danish software firm called LeanLinking (and we hope to speak to them further shortly). It provides a collaborative platform that enables users to provide information immediately and share internally and with suppliers in a rapid but controlled manner. As its website says: “ LeanLinking enables your teams and suppliers to take their partnership to the next level through greater data sharing, better alignment and maximized supplier performance.”

There may be some similarities here with Sourcemap in terms of this being a tool to manage collaboration and information around dispersed networks.  Rollstream might be another even earlier example of software that aimed to achieve this, but having been acquired by GXS in 2011, itself acquired by OpenText last year, that seems to have disappeared somewhat into the corporate void.  And of course, as well as these specialists, other software firms, from Ariba to Wax Digital, are building collaborative capabilities into wider supplier network platforms.

This Rolls Royce case certainly feels like the sort of example that we have expected to see for a little while, but has taken some time to arrive. It is hard to imagine that buyers and suppliers won’t be using platforms like this to speed up many-to-many collaboration forever now they exist. Rolls Royce historically has been an innovator in many of the manufacturing-based procurement and supply chain methodologies we take for granted now. So it is good to see that it is keeping up with latest thinking too.

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