Marketing Supply Chains Full of Kinks: Survey

Most companies don’t have a handle on their marketing supply chain, and that’s a costly mistake, according to a new study from the CMO Council.

“No one seems to truly understand the totality of the supply chain, and that’s a huge area of inefficiency,” says Liz Miller, vice president of programs and operations for the CMO Council.

A big problem, says Miller, is that companies look at the supply chain in an extremely segmented manner.

“They’re trying to reign in individual areas. It tends to be around creative asset management, or agency relationships or automating the marketing operational model, or CRM or data management perspective, or creative digital asset management,” she noted.

“What we haven’t done until now is understand where all of those individual aspects connect,” she continued. “[For example,] we focus on the creation of promotional items. But we ignore them once the first batch comes in—and that can be a huge area of inefficiency.”

Especially in times of tight budgets, it is essential for marketers to identify those inefficiencies. “Then,” said Miller, “you can redeploy those budget dollars into higher yield demand generation programs that will actually move the bottom line.”

The study, sponsored by NVISION, showed that only about a quarter of marketers are tracking obsolescence of marketing materials. And those who do are reporting obsolescence rates as high as 27%.

“That’s a huge number,” says Miller. “When you start translating that into dollars, you realize you need to start paying attention.”

Miller noted that NVision’s industry standards say obsolescence should only be around 8%.

“Only about a quarter of marketers are even tracking obsolescence,” she said. “And only about a quarter are taking the time to map and understand the totality of their marketing supply chain specific to consumables, which is quite frankly one of the easiest places to start.”

The issue here may be that the right people aren’t involved in the process, she notes. When asked who owns responsibility for the supply chain in their organization, the usual suspects came up—vice presidents of marketing, CMOs, brand managers, buyers, purchasing agents, etc.

“But who wasn’t included?” says Miller. “Warehousing, operations—the people who are actually storing and moving the materials.”

Some marketers in the study said they estimated their company could be dealing with up to 60 vendors for consumables related to sales, events and point-of-sale.

“Companies aren’t leveraging central point of purchasing and not leveraging the Internet to create an interconnected web of those vendors,” said Miller. “So no way to see all the waste seeping out of the pipeline.”

Why is this happening? “Many companies have a legacy of personal relationships that drive their ordering and procurement process, so [various departments] are all using different print vendors,” Miller notes. “If you consolidated that, you’d be saving on shipping, as well as print and production.”

A centralized purchasing and procurement system is still a fairy tale for many marketing organizations. “We were surprised that marketers were confused about where to build a platform to deal with vendors,” given the tools available online to do just that, she continued. “They need the resources to do this, and often there is no supply chain expert within the company, or even someone external, to do the analysis.”