PROCUREMENT; supply chain blending is a must-have skill

By | Business Complexity, Data Analytics, Leadership, Marketing Procurement, Point of Purchase, Retail Fixtures, Shopper Marketing, Supply Chain | No Comments

If you are in Marketing Procurement and are looking for a mantra to guide you throughout 2018 then there is no better one to consider than “One size does not fit ALL”. It is wrong to assume that one supplier can provide a best-in-class solution across all the requirements of a supply chain. This is especially true when considering the complexity of spend areas like retail investment programs. These types of programs require highly skilled disciplines such as market research, shopper marketing, conceptual design, technical engineering, production management, logistics optimization, merchandising etc. These all need to work seamlessly together to deliver the best possible outcome.

“If you expect a supplier to do everything, you will only be able to receive an average at best solution, where there is no discernible competitive advantage.”

There is a growing trend in the marketplace for companies to outsource the management of complex supply chains to just one company. In this way, they are able to reduce internal complexity as they now only need to hold one supplier accountable for delivery. The challenge however, with this approach, is that in all likelihood that one company will not have the skill base or resources to provide a high level of performance for every step of the supply chain. If only one area of the supply chain does not function well then it can significantly impact the final outcome and the level of value that is delivered overall. To abdicate the responsibility for overseeing the supply chain to an outside company is risky at best and, in most cases, will significantly erode the value that should be delivered.

The reason that there is still a growing trend to move to a single source supplier is due in part to one small but very important fact; the responsibility for data capture, insights and performance reporting is also outsourced. As an example, I continually come across instances where cost saving reports are generated by the suppliers themselves, with no validation undertaken through any other means.

“Abdicate the responsibility for data capture and performance reporting to your supplier and you will become the least knowledgeable party in the relationship.”

So, what other approaches can be considered? The other traditional method of sourcing marketing requirements is to adopt the “preferred supplier” strategy where several competing suppliers are identified and included in all future tenders. This does have the advantage of ensuring a highly competitive focus on a specific area. However, the problem with this approach is that the entire supply chain is generally not considered. Tenders are usually disconnected from supply chain outcomes and this breaks the chain and negatively impacts overall performance.

The real opportunity lies in BLENDING; working with the best possible suppliers but in a way that they are seamlessly integrated across the entire supply chain and all working to generate the same outcomes.

Key principles are:

  • Supply Chain over Purchasing
  • You in Control over Supplier in Control
  • Specialists over Generalists
  • Connected over Isolated
  • Flexible Supply over Single Supply
  • Waste Reduction over Margin Reduction

Here are six very simple key principles to bear in mind when seeking to implement a blended approach:

1.Big Picture

The only result that matters is the one that positively influences the end customer. Own the supply chain and focus on the final outcomes. Ensure there is clarity and focus on your goals. Embed continuous learning.

2.Gain Control

Put yourself in control. Make sure you have the data you need. Become better informed than your suppliers. Ensure your data sources are stable, reliable and owned by you. Act on the insights generated. Validate all your decisions.

“What gets measured gets improved.”  ~ Peter Drucker, considered the father of Modern Management

 3.Find the best

Don’t settle for average. Find the best providers. Seek competitive advantage by developing the best outcomes. Do not accept mediocrity. Identify tangible points of differentiation as this is what will give you the edge in the market.

4.Connect the dots

Ensure clarity on roles and accountability. Focus on handovers. Identify possible break points and ensure there are agreed remedial actions. Link the data, so dependencies are clear. Always use data visualization to help identify areas of improvement.

“Without data, you’re just another person with an opinion.” ~ W. Edwards Deming

5.Embed flexible sourcing

One size does not fit all. Ensure the supply chain is flexible and can embrace new sources of supply. Blend local production with centralized supply to always deliver the best solution. Achieve this by controlling the data, specifications, standards and processes.

6.Focus on waste reduction

Remove waste and you create value. Discard anything that does not directly influence the final customer. Treat people’s time as an investment and find ways of improving the Return on this Investment. Always demand transparency.

“Blending is a business technique that seamlessly connects high quality services into a fully integrated supply chain to deliver the maximum influence on the end customer.”

Here’s to a very successful 2018.

If you would like more information on how LeanPie can transform your shopper experience supply chain, please feel free to contact David at david.newberry@leanpie.com

One trend that will really matter to Marketing in 2018

By | Business Complexity, Data Analytics, Engineering, Leadership, Lean Manufacturing, Lean Thinking, Marketing Procurement, Point of Purchase, Productivity, Shopper Marketing, Supply Chain | No Comments

It all started back in January of 2017, when Marc Pritchard of P&G, laid down a new set of guidelines for the digital industry to clean up its act. Here is an article that kicked off a potential transformation of how marketing is managed.

In summary, there are two very simple issues at stake. The first is the lack of transparency across the supply chain. The second is a result of the first. If you don’t know how the supply chain works, you won’t know where the value is created and more importantly where the waste is happening. It is back to the age-old question of marketing attribution. The reason why attribution in Marketing is so hard is that all the various activities that are undertaken cannot be easily connected together to clearly ascertain how, and if, they actually impacted the customer outcome and therefore delivered a benefit.

“It is all well and good, increasing the number of impressions, or website visitors but if that doesn’t influence any change in perception, affinity or behaviour on behalf of the customer then it isn’t valuable.”

Itis time for Marketing to start focusing on connecting the supply chain. This has been underway for decades in many other departments and disciplines. It is about time Marketing finally catches up.

Lean Manufacturing and the resulting concept of Lean Thinking originated in 1988. The foundation is based around gaining control and transparency across the entity of the supply chain and in so doing to optimise workflows and to remove waste. Another concept that is very similar in thinking is Total Cost of Ownership . This was pioneered by Gartner in 1987. A very simplified view of TCO is to look at all the costs associated with an activity — acquisition or set-up costs, operating costs and finally replacement or upgrade costs — as a means of being able to evaluate the return on the total investment made.

“Three decades is probably enough time for Marketing to wait before applying Lean Thinking & Total Cost of Ownership concepts.”

So how can Marketing adopt these concepts? Here are seven recommendations that will start you on the supply chain connection journey in 2018:

1. Have a clear customer outcome

Every objective should deliver discernible value for the customer. Establish a hypothesis against which you can measure success. Make sure the objective is measurable. Define and agree in advance how it will be measured.

2. Seek transparency from partners

Ensure that all your partners provide full transparency. Agree on what data will be provided and how. Ensure that all the data can be referenced to and analysed for customer value creation.

3. Understand the entirety of the supply chain

Map out the entire supply chain. Understand each task and activity. Define how each handover will be managed. Identify who is responsible for each step. Agree on how issues, delays etc. will be handled. Know the journey. This will ensure you gain complete control and thereby the opportunity to influence and create measurable value.

4. Connect the data

Ensure that data is not siloed and not looked at in isolation. You need to be able to aggregate / consolidate all the effort and resources applied and compare that to what outcomes were delivered. In addition, the closer a relationship can be established from one stage of the supply chain to another, the easier it will be to understand how a change in one area can positively impact the performance of the entire supply chain.

5. Consider human resource costs (for a more complete view)

A significant level of resource can be invested in people’s time. In many cases, this may not be that valuable. How often have you been in a meeting that has not been productive? It is worth considering what the costs are associated with this effort. By considering this, you may uncover significant opportunities for workflow improvement and waste reduction.

“Meetings should be small enough that two pizzas would feed the entire group. If not, the meeting would probably be too big and unproductive.” Jeff Bezos

6. Work with specialists (to build understanding and insights for waste reduction and improvement)

Supply chains are complicated. Ensure that you work with specialist partners. If third parties cannot add value e.g. they are only a communication cog, then seek ways to reduce their involvement. Data is only as good as the insights they provide. If you don’t know how to apply the data to create value, then work with people who can.

7. Adopt continuous improvement (validated learnings)

Good supply chain management will provide you with the full cost of the investment made. With a clear hypothesis of what that investment was established to deliver, you have a clear way of assessing the return on that investment. Invest time to learn as next time round it will pay you dividends. Always validate your outcomes and apply learnings to every future programme.

“Validated learning is a unit of progress process and describes learnings generated by trying out an initial idea and then measuring it against potential customers to validate the effect.” Eric Ries, The Lean Startup

May 2018 be the year that Marketing starts to connect their supply chains. In so doing, Marketing has the opportunity to transform the function and to really get to the heart of what true attribution means.

Wishing you all every success in 2018.

If you would like more information on how LeanPie can transform your shopper experience supply chain, please feel free to contact David at david.newberry@leanpie.com

Procurement – switch your focus from sourcing to supply chain management

By | Business Complexity, Culture, Data Analytics, Leadership, Lean Manufacturing, Lean Thinking, Marketing Procurement, Productivity, Supply Chain | No Comments


I have worked in marketing for more years than I care to remember. The one key observation I have regarding this discipline is that it continues to expand in breadth whilst at the same time growing in complexity. This is clearly a challenge for marketers but, in addition, it also provides a whole new set of challenges to the procurement teams who are tasked will helping marketing make their investments go further.

I am also a cofounder of several start-ups, that have been developed to help marketing procurement leaders address this complexity and unlock hidden value. BUT to be honest I mostly find myself facing a wall of silence. However, there are some young, highly talented individuals who seek knowledge at every opportunity, embrace change, address risk and add exceptional value to a business. So, this is my way of sharing the attributes of these unsung heroes.

As Arthur C. Clarke once said:
The Information Age offers much to mankind, and I would like to think that we will rise to the challenges it presents. But it is vital to remember that information — in the sense of raw data — is not knowledge, that knowledge is not wisdom, and that wisdom is not foresight. But information is the first essential step to these.”

Procurement thinking
The real challenge is that Procurement focuses too much on margin reduction rather than removing waste from the supply chain. The first approach reduces the margin and profit of the supplier thereby negatively impacting them whilst the second can benefit all parties.

The challenge, if you negotiate or even bully a supplier to give you a lower price, is that several things happen; you become less important to them, you don’t gain access to their best people, they take their innovations elsewhere and ultimately, they deliver their best service to their more rewarding clients. However, the biggest negative is that they don’t see the relationship as a partnership of equals and you lose access to very valuable information. Information that is essential to remove waste and to deliver real value to the business.

Lean Thinking
Very simply Procurement needs to embrace Lean Thinking. To achieve this, you need to understand every element of the supply chain and this requires partnership with all the stakeholders. By understanding every step in a supply chain, you are then enabled and empowered to identify areas that don’t add value and to remove them.

So, how important is this? Well, Mark Pritchard certainly thinks it is. Look at what he says about the “media supply chain”. Even Mark Ritson throws more fuel on the media supply chain fire. What is interesting is that the same theme comes through from two of the most influential and experienced marketers globally; to deliver value you must have information, transparency and standards. To be honest this is not just an issue with digital advertising, it transgresses all areas of marketing spend.

 “Good procurement practice is negotiating a better price but great procurement practice is removing waste from the supply chain.”

Like-for-like comparison
It is not just standards but it is the ability to compare one element with another in an objective way. This requires the marketing procurement team to confirm that it is indeed comparing like-for-like. If comparison is not possible, how can you achieve an objective judgement?

“If you are not comparing oranges and oranges when running a marketing tender of any sort, then you are participating in an exercise in pure futility.”

Dissect the supply chain
Due to the complexity of many of the materials and services used by marketing, it is inevitable that the supplier you are working with is outsourcing huge elements of the programme. If you don’t know how the supply chain works or who is involved, how can you have any chance of identifying where savings can be made?

Spend time to get to know how the supply chain works, what the steps are, who are the responsible parties, who adds value and who doesn’t. Once you have a clear picture, identifying and adding value becomes relatively easy.

Focus on the detail
Adapting the well-known saying:
“Look after the marketing pennies and the marketing pounds will take care of themselves.”

This is very true and it is often the small details that can unravel a supply chain and cause untold problems. Identify these blockers and develop solutions which are specifically designed to remove them.

Invest in Flow
Flow is a key component of a Lean Manufacturing supply chain and it is where one task is completed and the project is moved onto the next task. Invariably marketing supply chains break down at these points. An obvious example is where Marketing have spent so long working on and approving creative, that production only has days to deliver the required materials leading to excessive overtime costs.

Gain control over the supply chain flow and these problems can be removed along with all the extra costs associated with short production lead-times or other shortfalls.

 “In a marketing relay race, it is not how fast you run that counts but how well you pass the baton.”

Take out waste
What do I mean by waste? Well very simply it is any cost that does not directly or indirectly contribute any value to the final solution. There are many ways you can identify waste. Here are a few examples:

  • Teams spending too long in meetings where limited actions are taken (resource waste)
  • Solution goes through multiple changes (duplication waste)
  • Delays happen due to late or delayed approvals (process waste)
  • Use of third parties that are just passing information from one party to another but not impacting the final solution (layer waste)
  • Too many solutions are created (production waste)
  • The wrong solutions are delivered (planning waste)

“Focus on looking for marketing waste and you will find it everywhere. Change your mind-set and transform the marketing procurement function.”

Achieving success
This is a hard one and I do not envy the challenge that many of these very capable marketing procurement professionals face in trying to deliver additional value to the business. However, you must adopt a mind-set where you seek to become the most informed individual in the supply chain. By achieving this, you will be able to focus on removing waste and in so doing, to gain the commitment, support and data that you need from all stakeholders, both internal and external, to establish a lean supply chain that is subject to continuous improvement.

So, the next time an email arrives or the phone rings, consider this. Is this an opportunity to gain further data, insights and knowledge? To succeed, you need to be open to learning something new every day, so embrace every opportunity to network, find those hidden areas and unlock that additional value.

If you would like more information on how LG&P and LeanPie can transform your shopper marketing supply chain, please feel free to contact David at david.newberry@leanpie.com

Forget Big Data, give me Real-time Data now

By | Big Data, Data Analytics, Marketing Procurement, Point of Purchase, Retail Fixtures, Supply Chain | No Comments

Blog data

There continues to be significant discussion on the topic of Big Data. Big Data is the term used to describe very large data sets that need to be analysed computationally as they are simply too large to be reviewed in a manual way. By using the latest analytics software, you are able to identify and reveal patterns, trends and associations between the huge numbers of data points. This helps you better understand the relationships at play, how various parties are behaving and what interactions are taking place. This unearths new opportunities or potential challenges that were previously hidden.

So how does this relate to a Marketing Procurement function? It is likely that more data is now being captured on the goods and services that marketing are procuring. As these data sets increase in size, analytics can help uncover hidden value. However, what is more important is understanding which data points are valuable and can be acted upon. I like to refer to this as Small Data. Not all data has the same value and it is therefore imperative to identify what data is critically important and can influence commercial performance. The second step is to make sure that the quality of this data is accurate, robust and able to be analysed.

An obvious example is, how you might classify all the goods and services that marketing are buying. If there is no standard classification system in place and every party is using their own unique terms, then you would need to rely on key word analysis and this is less than optimal. The second factor is the degree or depth of classification system you use. If every display rack is just classified as “Display Rack” then counter units, floor-standing units, wall mounted units and promotional units would all end up being classed the same and any analysis would be just too high level. 

The starting point, when approaching data analysis, is to not only look at the data you have but more importantly to identify what data you NEED. Data has no value if it cannot be actioned. Identify the actionable “Small Data” that you require and then put in place structured processes that enable you to capture this. For Marketing Procurement you need to look at the various supply chains as your means to capture this data.

The other factor that is critical for Marketing Procurement is the need to gain access to the data in real-time. If you are able to capture data from the supply chain, at the start of the process and in real-time, there is a huge opportunity to influence and add value. If your only access to data is internal data (Purchase Orders) and after the event, the opportunity to add value has gone. Here is why:

  • Marketing investments are constantly changing, so having historical data for an investment that won’t happen again has limited to no value
  • If there is missing or inaccurate information, trying to obtain this after the event is very time consuming and in many cases futile as suppliers have no incentive to help
  • After the event, there ends up being a reliance on the supplier to provide the information you need, on their timeline and in their format
  • You will always be the last to arrive at the party and as such the level of influence you can bring will be dramatically reduced

So, how can Marketing Procurement use data to transform how they can add value. Here are some tips:

  1. Identify what data you need
  2. Establish the standards by which that data needs to be provided
  3. Identify the supply chains where that data will originate
  4. Ensure you identify the front-end of the supply chain and always include that is your approach
  5. Introduce new processes, procedures and systems to those supply chains to make sure they are fully transparent and can provide you the data you need, when you need it

The reality is that if you are involved from the beginning and you are able to obtain the data you need in real-time, your ability to influence will increase exponentially. End-to-end supply chain management with a strong data – insights driven strategy will unlock significant value.

This is the approach that sits at the very heart of why LeanPie was founded. If you are looking to transform how you design and procure retail fixtures and Point of Purchase materials, you should look no further. We commit to “Clarity and Control through Precision” based on:

  • Clarity – transparency – cloud technology (transparent data)
  • Control – governance – lean processes (real-time data)
  • Precision – engineering skill – talented experts (structured data)

There is no downside to talking to us and you might unlock some data that you didn’t know before. We look forward to hearing from you at david.newberry@leanpie.com