Supply Chain Management

Why Marketing Procurement Professionals Are Crucial to SCM

Marketing provides an essential balance in supply chain management. It helps companies and their partners become more focused on customers rather than on the production process. By improving communications, support and collaboration, marketing helps increase supply chain efficiency and create a single extended enterprise with a strong competitive edge.

—Ian Linton, Role of Marketing in Supply Chain Management

Marketers and communications practitioners who’ve been demanding a seat at the C-suite table for decades would rejoice to read Linton’s statement above. Often the last to know what’s going on within the organization but never relieved of the task of ensuring the successful launch of new (or relaunch of newly improved) products, in-house marketing teams are often assigned a thankless role. Most big companies outsource their marketing. But while some big organizations, like PepsiCo, have decided to eliminate their marketing procurement professionals and task brand executives with the role instead, this is probably a huge mistake for a variety of reasons.

First, it prioritizes branding above all else. As we head into the third decade of the 21st Century, consumer confidence in the halo effect created by successful branding is at an all-time low. Whether it’s Nike’s offshore labor issues or Johnson & Johnson’s baby powder lawsuits, every brand will sooner or later be under scrutiny for every aspect of the way it does business. In some cases, how hard a company’s image can fall is in inverse ratio to how highly it soared in the court of public opinion. It takes only one allegation of a supply chain that includes slave labor or unfair contract manufacturing practices for customers, especially millennials who seek transparency throughout the supply chain, to look for another supplier.

Second, it means no one within the organization is looking at the big picture. Without systems in place to actually evaluate outsourced marketing proposals, brand executive loyalties to individual suppliers can lead to a total disconnect between the aims of that particular brand and those of the organization overall. Everyone prioritizes marketing differently, and without a clear set of evaluation criteria, who knows whether the marketing you’re paying for is actually working? Part of the criteria should be a standard timeframe for agency review, something no one else in the company may have time for, but marketing procurement professionals should prioritize.

There’s no doubt outsourcing marketing to an agency can ensure you’re getting the best and the brightest and can tap into the collective wisdom of professionals who’ve worked on award-winning campaigns and who know how to recognize synchronicities to create effective marketing materials and processes. But agencies can get lazy with clients who don’t keep them on their toes and ask them to demonstrate that they’re just as creative and effective now as they were when first hired five years ago.

Procurement professionals’ top concerns

A recent series of roundtable discussions conducted by CASME, the global procurement professionals’ association, identified the following six procurement professionals’ top concerns:

  1. Risk management
  2. Reputation and brand image
  3. Corporate social responsibility
  4. Becoming a customer of choice
  5. Centers of Excellence
  6. Stakeholder Engagement

None of these areas of expertise are required for or commonly found among procurement professionals, which makes it that much more important to ensure employees tasked with doing marketing procurement have systems in place so they can select the right agency partners for their organizations

On the stakeholder front, for instance, while customer relationship management tools can be used to track supplier onboarding and relationship-building activities, it’s a reactive rather than a proactive approach. One of the things a marketing procurement professional would look at when evaluating agencies is whether they have expertise in stakeholder communications and in applicable industry sectors. While PCs, Macs, and Chromebooks are all marketed very differently, they do pretty much the same things. This is why agency knowledge of issues and strategies that have been tried and succeeded (or tried and failed) is crucial. Some marketing agencies specialize in software, others in hardware. Knowing how to market one doesn’t imply a track record in marketing the other.

When it comes to corporate social responsibility, the traditional aims of procurement may actually be at odds with the organization’s needs. It’s not just about cutting costs, it’s about the true value of collaboration. “By aligning procurement activity to the stakeholder’s business objectives and selling the benefits of collaboration, the overall result can be more valuable than cost savings alone,” said Graham Crawshaw, services director at CASME.

Managing risk now extends throughout the entire supply chain. It’s no longer just about what happens at a company’s corporate offices or retail outlets or on their assembly lines. As part of a commitment to corporate social responsibility, looking longer, harder, and deeper at not just tier-one suppliers but also at tier-two suppliers is crucial. And it’s not just about looking at how suppliers run their businesses, it’s about helping them succeed so they’ll help your organization succeed.

Ironically, those who study supply chain management are now challenging accepted wisdom from analyst firms like Gartner, who’s been publishing a ranking of the top 25 supply chains for 15 years. As Dave Blanchard of Industry Week said, “Gartner also includes a corporate social responsibility (CSR) score, which seems to be influenced as much by how well a company promotes its efforts as on actual CSR achievements.”

Marketing’s role isn’t merely to promote CSR efforts. When transparency is being demanded in every single aspect of the supply chain, the marketing firm you choose needs to be a strategic partner who’ll help you achieve your goals and who shares your organization’s values. And like any other supplier, a marketing procurement specialist is in the best position to evaluate and select an agency that will be a supplier of choice.