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How Can Marketing and Supply Chain Ever Get on the Same Page?

Analyst Insight: Let's start at the very beginning. Supply chain DNA is focused on costs while providing acceptable service to customers. Marketing DNA is focused on revenues that come from the sales and services. As a result, the only shared value between marketing and supply chain people is the recognition that "stuff has to get to customers." To marketing, the term "minimize" only relates to the number of times a customer is dissatisfied, whereas to supply chain, "minimize" is the Holy Grail. – Robert Sabath, Principal Essentialist SCM, Trissential

How Can Marketing and Supply Chain Ever Get on the Same Page?

Is there any shared ground? Yes! There is! The most significant breakthroughs in CRM, corporate growth, and transformation depend on shared priorities and shared measurements. Supply chain folks and marketing people can get together if they use the right tools.

Manage, using matrix-total dollar profit: rank customers according to total annual dollar profit, and manage them accordingly (top 4 to 5 customers always receive perfect service in every regard; traditional "A" customers receive 99+ percent, highly customized service; "B" receive responsive service; "C" and "D" receive responsive service, with pricing modified to ensure profitability).

Manage for the top line first: in its purest state, it's the Amazon model. You focus on satisfied customers to build the top line, and the bottom line will follow (a very small percentage profit, but a very large number because of the immense level of sales).

Build a discovery machine: understand that good ideas come from all directions. Even small ideas can have significant potential when viewed through others' eyes or in combination with other "small" ideas. Example: the process of striving for same day delivery – the nemesis of most supply chains and the wildest dream of most salespeople – might yield special insights into frequent customer buying patterns, alternative transportation and interim storage channels, or a host of benefits that secures a much higher degree of consumer intimacy – and profit growth.

Match personal priorities: for most supply chain people, playing in the marketing sandbox is uncomfortable, impossible, often downright scary. The flip side of that proposition is also right on point.

How to get through to the "resisters”, who refuse to allow customer-facing and product-focused professionals to share anything?

These are real people – with kids and grandkids, bills to pay, careers to manage. Is that union local president protecting his employees or perhaps worried about his potential to get reelected? Does the consumer worry about our cost minimization when buying a replacement air conditioner in the middle of August? We need to fly out of the box to understand the background drivers: customer growth comes from extraordinary response to exceptions!

Share immediate and critical information: for years, Dell offered inventory detail to consumers who rarely recognized the event but were thrilled by its outcome: John Q. Public ordered a computer (via internet or phone) and communicated his carefully-chosen preferences for a "perfect" computer. During the ordering process, wonderful options often were offered – more memory for the same price, faster processor for just a few bucks more, a larger screen "on the house". John Q. was thrilled, getting a real bargain. Dell management was also thrilled: they satisfied customer needs and gave more than expected, incurring no back orders, special handling, expediting, and consequently no ridiculous added costs. The same model can work in almost any environment.

                                                  The Outlook

We have all seen successful partnerships and their synergies, and there are plenty of good examples of supply chain/marketing bridges. Yet, we often come from organizations that avoid risk and are afraid to partner with external organizations. The status quo feels acceptable, and change is strongly resisted.

Well, this is your opportunity to partner internally or externally, to multiply your knowledge and capability in terms of delivering knockout value to your customers and the resulting increased profit to your company.

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