With global sourcing strategies in place, companies often assemble finished goods from raw materials from hundreds of suppliers. However, not all suppliers act ethically, and some take short-cuts in quality control. In order to properly manage our brands and take ownership of the “customer experience”–marketers need visibility into the supply chain. Do you know what’s in your supply chain?
How companies plan, source, make, deliver and return products and services is more than just the purview of procurement managers and supply chain analysts. And while the CEO and Board bear ultimate responsibility for the quality and safety of a company’s products and services, marketers have a significant stake in supply chain management.
Many companies have tried to save money by sourcing from other countries like China, Mexico, or other emerging economies, but unfortunately some companies don’t often track and monitor the quality of items sourced.
Case in point, in the past six months online and offline media have buzzed with reports regarding tainted chili peppers, tomatoes (whoops: false alarm), toothpaste, dog food, and pharmaceuticals imported from other countries.
Fellow MPDailyFix blogger, Ted Mininni wrote a post in May 2008 on the need for product traceability “from field to fork” to establish transparency and maintain public trust.
I’ll agree with Ted and submit the following: With brands and reputations on the line, companies need to know exactly what’s in their supply chain, down to the very unit and supplier whenever possible.
That’s fine you say, but what does this have to do with marketing?
For marketers, this is a risk management exercise–not to mention one centered on marketing ROI.
Marketers often spend gobs of money on optimizing marketing processes, building brands, and designing programs to increase customer loyalty. However, it is quite absurd to spend millions of dollars on marketing and have it all wasted as customers or animals get sick–or worse–from the products on our shelves.
Most companies are engaging in a purposeful effort to build effective policies, technologies (supply chain analytics and infrastructure) and processes to track and monitor the extended supply chain. Marketers must be able to access and query these analytical systems so as to understand the interdependencies, assumptions and events that occur or could occur within the supply chain.
However, accessing analytical applications is just one part of the equation–the ability to influence change and provide accepted input to supply chain stakeholders is another large part.
Marketers need to make a purposeful effort to reach out to CIOs, Supply Chain VPs, Operations, Finance, risk managers and others. Intradepartmental meetings with the above functions, in addition to analytical systems access will help give marketers the insight and visibility needed to make the best decisions in protecting our brands and managing risk.
Traditionally, marketers have been more concerned with the demand chain rather than the supply chain. However, line of sight into the entire value chain and the ability to influence decisioning with all stakeholders–will help us better manage risk and ultimately engender higher levels of customer trust.
Questions:
* Should marketers–in all roles–care about supply chain management? Or are these concerns “out of scope” for marketing?
* How much of a marketer’s time should be spent on collaborating with other departments on supply chain management?
* Have you identified the one or two big events that could cause massive disruption to your value chain? How are you mitigating those risks?
Tags: customer experience, field to fork, monitoring, supply chain management, track and trace, trust, visibility
Thank you for the kind mention, Paul. I appreciate your referencing one of my recent blog posts. Agreed: companies have a greater responsibility to the consumer than ever. Traceability, whether it applies to the farm to fork supply chain in the food business, or the component parts of toys, is extremely important. The companies that take a leadership role in this will earn the trust of the consumer. And to answer your question, it is the role of marketers and everyone else within companies to push for traceability and transparency. How can marketers push their products with confidence unless they can fully believe in them and the messages they’re putting out there, otherwise?
“Marketers must be able to access and query these analytical systems so as to understand the interdependencies, assumptions and events that occur or could occur within the supply chain.”
Right on Paul. As you and I have discussed, any point in a business where we touch customers, analytics plays a role. And marketing should be the leader in launching and managing the analytical processes.
Good post!
I think the supply chain for most American companies is lost somewhere between the great wall and the South China Sea.
Ted, you wrote, “How can marketers push their products with confidence unless they can fully believe in them and the messages they’re putting out there, otherwise?”. I believe for the vast majority of marketers, ethics is important. However for even those who aren’t ethically minded, at least the ROI argument should play well (i.e. why spend money building your brand in marketing when you’re tearing it down through lax supply chain management).
Thanks for your comments. I appreciated it!
Lewis, I saw a write up from a tier one analyst firm about a week back suggesting that marketing should be taking the lead in gearing companies towards an analytical orientation. I’m glad to see major analyst firms getting on board, but I’m concerned that analytical implementations -especially in marketing, are still niche – much less marketing leading the charge companywide! I’m hoping the next five years really accelerates this trend…
Levon, thank you for taking the time to comment on this post. Companies and the marketers within them cannot abdicate the role of risk manager simply at the end of our company supply chains. Most supply chains are longer than we think, and for any partner or supplier that touches our value chain, we need visibility into their processes and transparency into how they’re sourcing.
Our brands are just too valuable to assume someone else is taking care of risk management.
Since marketers are literally the guardians of their brands, they have an obligation to get involved in supply chain issues. Where product integrity and public safety are concerned, this has become a major priority. It takes time, effort and considerable resources to build brands and as little as one disastrous mishap due to poor sourcing to destroy them.
“Our brands are just too valuable to assume someone else is taking care of risk management.” Exactly, Paul. Exactly.
Heck yeah marketers should care about the supply chain.
As companies become more transparent (whether this happens by choice or not doesn’t matter. It’s happening.), I think a more holistic view of marketers role is necessary.
Time management. That’s the tricky part. A holistic view of marketing, can leave the “department” of marketing stretched beyond their means if it is not done right. This is why everyone in the company should see themselves as a marketer in some fashion. Not only does this help in the creation of a clear and focused brand, but it’s probably the only way to get things done.
Claire, thank you for adding your comments to this discussion. As I am discovering from my reading, everyone in the company is responsible for risk management. Yes, as budget holders we’re responsible for making good, timely decisions regarding risk and ROI, but as stewards of our brands, I’m trying to enlarge our thinking–and scope–to all aspects that touch our brand.
Truthfully though, this is aspirational thinking. I’m not sure how many marketers actually believe they should be involved in supply chain management decisions and processes.
And then if we believe that marketing should have input and visibility into SCM processes, getting access to line of sight systems and building the relationships internally so that our opinions are accepted and valued–that’s going to take time and involve a lot of work.
Is it worth it?
Chris, your comments on the “holistic’ role of marketing are spot on.
Marketing is, can be, and should be so much more than seen as just the marcom function. It’s a shame that marketers, as supposed masters of positioning, get positioned as “the ad guy”, the “brochure maker” or “PPT Queen”.
Let’s expand our scope and put on our business hats. There’s a whole wide world out there!
Actually, we’ve found that CMOs are major drivers of their organization’s traceability initiatives. That makes a lot of sense, since it’s “their” brand that’s getting damaged.
The shift recently has been that rather than being an insurance policy, traceability, or the fact that you have it, can be marketed, which lends “credibility” to the product, and can influence the purchase decision.
That makes sense, too, since “food safety” has risen to the #2 spot in consumer concerns, still behind freshness (which people probably associated with “safe”), but now ahead of price.
That means shoppers are willing to pay more for a product that’s traceable, but doesn’t necessarily mean it’s “safer”. The vendor can turn that into higher prices and bigger profits, by charging a premium for a product when it only costs a penny, in aggregate, to make it traceable.
So, “traceable” is becoming similar in importance to “organic” or “shade-grown” or any other differentiating brand claim.
As a marketer myself I keep a very close eye on these trends.
Marc, thanks for taking the time to comment. There’s a terrific article, I believe in Fortune, on how traceability is important in the jewelry industry as customers want to know where their gold and diamonds come from–esp to avoid blood diamonds etc. So I can see how, in some instances, traceability can be a selling point.
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Ryan, route your request to Ann Handley, CCO of MarketingProfs. That said, your questions could probably best be facilitated and answered thru LinkedIn’s “Ask a Question” feature via your social network.
Michael Dell used to call inventory “the tangible manifestation of lousy information.”
So, back to your questions:
1.) Should marketers care about supply chain management? Only to the extent that they care about being able to offer lower prices (as a result of a shorter cash conversion cycle) and being able to minimize stock outs. Marketing used to be about making promises. Now it’s about making promises and making sure that your organization backs you up on those promises.
2.) How much of a marketer’s time should be spent on collaborating with other departments on supply chain management? That depends on whether the company is keeping it’s promises. Too see if it is — ask about its “conversion rate,” “out of stock rate,” and “perfect order rate.”
Great post.
Harry Joiner
MarketingHeadhunter.com
http://twitter.com/ecommercejobs
Collaboration is key in having successful business practices and ultimately a successful business. Those who have a Sales and Operations Planning Process/S&OP in place, (monthly meetings of executives from all the major disciplines) shows not only improvement in customer experiences but a significant savings on the balance sheet. Marketing’s role is quite crucial as mentioned in the post in both demand planning as well as quality control in the supply chain. I agree with the author and hope more marketers take an active role in participating in these meetings or at Pre-S&OP meetings to add their viewpoints for critical business decision making.
Again Great Post!
Constance Korol
Senior Marketing Manager
Institute of Business Forecasting and Planning
http://twitter.com/demandplanning
http://twitter.com/constancek
Constance, thank you for taking the time to add your comments! It has long been my approach to advocate for a boundaryless role for marketing – getting us towards more strategic endeavors and out of powerpoint factories. Now the question of the day is, “if a marketer is not currently part of the demand planning and/or quality control processes and meetings” you’ve mentioned, how does one “insert” themselves into the conversation?
Hi Paul,
Well it is certainly easier when you have buy in from upper management and/or executive sponsorship for collaborative efforts such as S&OP. However, marketers hold valuable information such as promotion schedule, events and competitor analysis to improve upon the forecast. When “the talk” focuses in on profitability, working capital and the bottom line, the ears perk up in the major disciplines of Finance, Supply Chain, and Operations. So my suggestion is for marketers to initiate financial benefit with their input, and alongside of that could be customer relationship management in a more subtle way.
I have also asked several folks who have worked with us in the past to possibly share their thoughts on the situation. Just an FYI, we will be covering S&OP implementation and improvement at our upcoming fall event “Supply Chain Planning & Forecasting Conference” http://ibf.org/conferences.cfm?fuseaction=conferenceDetail&conID=252
Best,
Constance
Constance, thanks again for commenting. Indeed you have it right, marketers who have a pulse on the customer are a necessary ingredient to demand planning discussions. We should be contributing customer satisfaction, competitor knowledge, customer sentiment, market trends, recent customer dialogues, lead and sales pipeline, loyalty and churn figures etc.
Finance, Supply Chain, and Operations — all that’s needed is someone to represent the “Customer”. And that’s marketing!
It is truly critical that marketers be actively engaged in the demand planning and sales & operations planning processes. If the marketers have not had a voice, a good approach to getting into the conversation is to develop a relationship with the key influencers in these processes. Ideally, one can find a person or persons who are the “champions” of these processes who can integrate marketing into the discussion and the process itself. Best of all, if the company has structured and mapped its business processes, including demand planning and S&OP, the processes can be modified to specifically include key marketers to ensure a balanced view and balanced source of information. Ultimately one is looking for a way to systematically include marketing in the demand planning and S&OP processes, where their roles and responsibilities are clearly recognized by all participants and where their opinions are valued.
Mark Lawless
Senior Consultant
Institute of Business Forecasting & Planning