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

Engineering: The beautiful swine

By | Engineering, Value engineering | No Comments

Value engineering

A hardly popular choice for students when it comes to deciding their professional future, but certainly engineering is one of the most absorbed practises in the UK; it is embedded into all activities that imply a level of complexity. In the UK, we just seem to add the suffix “Engineer” to many careers or jobs simply to add a buzz word and create theatre behind it, like a technology implied activity that tells those interested that there is an intricate structural and mathematical work attached to it. For many this is considered the boring stuff, the better-you-than-me thing, the weirdo matter.

But what is engineering? If you Google it, the most common definition is “The branch of science and technology concerned with the design, building, and use of engines, machines, and structures.” This is clearly not an accurate view and more assigned to the Victorian times, however there is one definition, published by experts at WIE (What Is Engineer), that truly tackles the current feel; Engineering is the application of scientific knowledge to solving problems in the real world. That’s more like it.

Engineering is incredibly time consuming, no matter which branch of science or applied activity it is used for. This is because of its scientific, methodical and rigorous approach to problem solving. It is exactly that thoroughness what makes it an enormously effective practice for any company, not just to those who specialise in tangible products but in services too. It eliminates the chances of error and narrows down the potential solution outcomes of a particular problem.

We could create sophisticated tools to make it easier and speed up its processes, but it will always fall back into one question; “how much value do they really add to products and services?”

Let’s consider for a moment the concept of Value Engineering (VE), the brain child of Lawrence Miles and his team at General Electric in the mid-1940s, who realised that by changing materials and improving specifications without modifying the functionality of their products, they could significantly reduce the costs of manufacturing. That’s value added at its best.

And who is to say that this same principle can only be applied to manufacturing products. The  key to VE, also known as Value Analysis (VA), is to understand tasks and processes with absolute clarity so they can be described in two words, literally. For instance; the function of a drill is “making holes”, or the job of a priest is to “save souls”. To say this without entering heated debates requires us to identify the purity of a functionality in two words. Achieving this opens up possibilities to alternatives to drilling holes or saving souls, and therefore to truly breakthrough thinking on problem solving.

Engineering is a science and a practice, boring and exciting in equal measures, and if well implemented, it could become one of your best core business services and unique selling points.