What’s your Role in the Marketing Supply Chain?

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July 21, 2011

Research entitled “Mapping + Tracking: The Optimized Marketing Supply Chain” by the CMO Council, depicts a threatening picture of inefficiency and waste in the Marketing Supply Chain. This post summarizes this great research.

As marketers seek to provide the timeliest and freshest content to customers and prospects alike, old, over-ordered or un-utilized materials tend to be stored, destroyed or ignored, left to occupy costly space in offices and warehouses. High levels of waste can generally be attributed to limited access to material usage information, a lack of visibility into the operational process, and a general lack of forecasting and operational rigor. All of these factors combine to create an epidemic of waste that can be summed up most accurately as obsolescence.

Obsolescence is not excessive ordering of un-used collateral. Excess materials are merely a visible symptom. In fact, it is what cannot be seen—what is behind the scenes and invisible—that makes an indelible impact on marketing effectiveness and can derail, detract or damage the customer experience.

The shelf-life of marketing consumables and promotional materials has never been shorter or more challenging to manage. Marketers are spending billions of dollars producing, warehousing and shipping marketing literature, packaging, documentation, point-of-sale displays, premiums, giveaways, signage and hand outs. How well this portion of Marketing Operations is managed and controlled can materially impact go-to-market effectiveness, as well as the optimal use of marketing dollars in creating business value and competitive advantage.

The Ramifications of Marketing Supply Chain Inefficiency

There are two key aspects to investigate while discussing impact of obsolescence: the impact on budget and the impact on customer or prospect experience. Marketers admit to the criticality of content, yet 51 percent also admit to having sent out old materials containing out of date content. Why you may ask? For a small few, warehousing error (2 percent) can be blamed. 61 percent did not have new materials ready in time and 23 percent of marketers did not know that irrelevant, old material was sent. Are these marketers not interested in the customer or prospect experience? Or could it be more likely that they are without the tools and processes they need to get the visibility they desire?

Staging a Priority Shift

If content is constantly updating and changing to deliver the most relevant and timely information to prospects and customers, why are marketers not applying more rigor to managing the flow of these critical elements within the supply chain? Most simply do not view the reduction of obsolescence as a key priority (50 percent). As one marketer stated, “Waste is just taboo as a can of worms. To open it holds little reward and no compensation, so there is little motivation to start down this road.”

Yet transformation is on the minds of savvy marketers dedicated to operational efficiency and effectiveness. Additionally, there are very real strategies and opportunities to engage that can work to streamline the Marketing Supply Chain.

Obliterating Obsolescence

The opportunity lies with marketers to transform the Marketing Supply Chain operations and make significant strides to reduce obsolescence and in turn, redeploy budget that was once wasted on out-of-date materials.

  1. Leverage digital printing strategies– including Print On Demand (POD): Digital printing technology has come of age, enabling economic production of all quantity ranges. Smaller production runs result in a lower total cost of ownership by reducing capital investment in inventory, storage charges, and waste. A POD strategy can further reduce costs by eliminating inventory, storage, and in-bound freight costs. POD also enables more current and customizable content through the application of Web-to-Print and variable data printing (VDP).  Marketers can send personalized messages with up-to-date content, and eliminate the fear of materials with out of date or off -strategy content being stockpiled in inventory.
  2. Cross-Functional Collaboration:Marketers are working more closely with cross functional teams in finance, sales, procurement, warehousing and operations to better forecast and eliminate over ordering. Far too many marketers indicate that orders tend to revolve around a “cost per piece” target or guesses at utilization levels. Through collaboration across various functional areas, marketing will be able to better forecast, monitor and manage Marketing Supply Chain operations.
  3. Go-Green to Gain-Green:When it comes to the reduction of obsolescence, the more impact made on waste reduction, the greater the green-gains. Obsolescence creates an environmental impact that goes beyond paper.  A lack of process, visibility and measurement in the Marketing Supply Chain often necessitates rush ordering which creates additional shipping, handling and logistical demands that all impact emissions, natural resources and carbon footprint. By applying a clear strategy that is focused on reducing obsolescence, marketers can transform the Marketing Supply Chain into a greener operation that optimizes spend and operates as a global green steward.
  4. Bringing in the Big Marketing Supply Chain Brains:If you are not good at developing process, bringing in a partner or business process consultant is certainly a valid option.  As with all self-improvement programs, you should first start by taking a hard look at yourself.  The first step in the process is to identify where marketing operations can be improved.  By completing a self-assessment, you’ll identify your marketing process hiccups and what you could be doing if those hiccups were streamlined or eliminated. From there you can decide if you can tackle the improvements yourself, call in strategic sourcing or consult with a partner outside of the company.

Marketers must begin to look at individual symptoms of inefficiency with the Marketing Supply Chain in order to optimize budget allocation, operational management and delivery of the customer experience. Obsolescence is a serious challenge to marketers as they looks to maximize budget and operations. The good news is that a streamlined Marketing Supply Chain is possible. In these critical times where customer engagement is top of mind and budgets are restricting, waste and unchecked obsolescence are no longer issues left to other departments or hidden in a marketing closet.  It’s time for marketers to take action.

Watch our post next week for a Marketing Operations Self Assessment Guide – 10 Questions to Help in Uncovering Opportunity for Efficiency in Marketing Operations.

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