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 email@example.com