Traditionally, the supply chain team is siloed with little interaction with the marketing organization. When there is dialogue, it is usually about availability of supply, and the supply chain team is on the back foot reacting to order and shipment data with 1- to 2-week data latency.
With the convergence of mobile, social and e-commerce, companies can now use digital marketing techniques to fuel digital business to enable horizontal processes to listen, test and learn directly based on customer buying behaviors in the channel. This requires a redesign, and the building of outside-in processes based on the use of channel data. It also requires a dramatic shift in the organizational charter to become market-driven and move past traditional marketing definitions of branding, positioning and price management to build sense-and-respond capabilities in the channel and translate the channel activities into the value network.
To begin this journey, companies should map the processes outside-in and form a cross-functional team that includes digital marketing experts to forge a new journey to use social signals (e.g., Twitter for customer service; Facebook for listening, mining of customer sentiment from unstructured data from ratings and review information; and the use of customer blog comments) and the integration with traditional channel data to better understand the drivers behind demand pull. The second challenge for the team is the redesign of the process to use data quicker. These new forms of data allow the sensing of true customer demand and the deployment of supply 15 times faster than traditional order-based systems. This quicker sensing and testing could be the success of a new product in a new market or a quicker response to sales that are faster than expected.
Revenue management and the seamless flow of funds in multi-party trade is another area where sales, marketing and supply chain intersect. While different industries use different demand shaping levers – price, trade promotion, new product launch, channel distribution incentives and marketing—each usually involves multi-year lift calculations to understand baseline demand elasticity and complex workflows – for multi-party payment systems. The evolution of internet couponing, mobile applications and e-commerce offers has increased demand lift by factors of 5 to15 times that of older, more conventional demand shaping programs. As a result, the automation of revenue management to sense demand, shape demand, track demand lift and manage payments is a critical horizontal process requiring marketing, sales and supply chain partnership.
While most companies think of marketing as a separate and distinct function, and worlds apart from traditional supply chain operations, for companies that are becoming market-driven, the convergence of marketing and supply chain processes to move from marketing-driven to market driven is essential.
Keywords: supply chain management, supply chain planning, supply chain systems, demand forecasting