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Five Differences between B2B marketing and supply chain managers

Here are five differences between B2B marketing and sales managers and supply chain managers as a sort of continuation of my earlier post:

1. Marketing managers being outward facing are constantly looking for opportunities sometimes without regard to what their organization can really do. Supply Chain managers first look inside before looking outside at suppliers - to ensure a good fit.

2. Marketing and Sales managers are more social compared to Supply Chain Managers who are more conservative. The former do the chasing of prospects while the latter need to stave off marketing people who are the firm's upstream suppliers.

3. Marketing and Sales people are measured by sales (volume and price) while Supply Managers are assessed first on availability of goods and services required by the firm,  then on cost.

4. Marketing managers work on an open canvas of the market and prospective customers and use techniques like segmentation,targeting,market research and the 4 P's. Supply Chain managers also have an open canvas of suppliers but they need to make supplies work in their firms value add process- any snags and they are in the direct line of fire! Supply managers are therefore much more risk averse and deliberative.

5. On a more fun and more social note you'll find many more marketing groups on the web and off it than supply chain managers. And when it comes to professional meetings marketing people may have extremes of no food to open bar at a high price ticket. Supply chain meetings will stay steady with modest burgers, pizza, strict cash bars, and a predictable member fee.

Organizations need to understand and mobilize the strengths and traits of these quarter backs of the firm as they grapple with global supply chains at the back end and global markets on the front end.

Input-process-output and the supply-firm-marketing chain

The input-process-output (see ICT model) is a way of looking at the firm's value chain. Supply managers handle the input coming in and the marketing folks handle the output coming out.

Like:                  

   global suppliers ->supply chain->[firm-]->marketing->global customers

Supply and Marketing folks are people who sit at either end of the firm and look at the world outside in the firm's value chain. The marketing manager reaches out to customers and supply chain managers reaches out to suppliers and also need to reach "in"to internal firm users.Both off course don't formally talk to one another - organizations are not set up to encourage the talking.  Unless there are operations review meetings, that can become mindless and boring. ERP systems can help but ERP speaks to only data and not the gut feel of these important folks.

If you look at the firm as just a processor - focused on creating superior value for its customers-you start realizing how much firms miss out in tapping on to the combined knowledge and expertise of their input and output side teams.

Complexity in the supply chain and assortment in distribution - reason for auto dealer woes ?

A Chrysler dealer providing testimony to the Senate Committee  reminded me what complexity does to not only the upstream supply chain but really makes things difficult to manage in the downstream distribution channel.Supply chain complexity (too many suppliers, too many different parts, too many color options) is a nightmare for supply chain managers and supply managers spend a lot of efffort in trying to consolidate supplies and suppliers.

On the customer side of a business though, marketing managers love offering something to every segment of the market. All the offerings on the market side are called "assortment." Businesses start  a new product line based on good market prospects. The distribution side then builds up with more dealers,more marketing and service support,service training,aftermarket spare parts and so on. Unfortunately, there is no manager standing in the showroom end and looking backward at all this "complexity" - at the showroom managers are happily showing the assortment to prospects !

Closing product lines or product deletion is a complex activity, that does not bring glory to the marketing manager. Consequently, it does'nt get done till there is a crisis as currently, as  in US Auto.

MBA lessons from GM Bankruptcy

MBA classrooms across the world will reverberate with lessons from the GM Bankruptcy for future MBA's. Strangely though,since MBA's starting working for GM  in the 1970's the lessons were already there!  For example, MBA's  in the seventies knew that moving with changing customer needs was  the simplest way to win. But fuel efficiency and smaller cars was a "no-no" for Detroit. Important stakeholders like the Unions clung on to expensive health and retirement as the sun set on US auto as the world literally turned and changed.

As an industry old timer told me, it was plain arrogance, complacency and the unwillingness of managers to speak up,in time. It was easier to deride the Japanese automakers ( ha imports) rather than emulate them, at least in part.

On the labor front the UAW is reduced to   a shadow of its old belligerent self.  This probably gives no pleasure to retired auto managers who were given such a hard time when they wanted to change things when there still was time.

This blog has been talking about the US auto industry for some years but academics have been writing about key problems for decades. US Auto is forever changed - the question is -will managers really learn in other industries?

G-20 summit a success - is the world really getting "flat" ?

It is not just travel,communication and the Internet -that's turning the world flat as Thomas Friedman famously pointed out. The most amazing  image from the G-20 summit is of  Queen Elizabeth and First Lady Michelle Obama putting their arms around one another. When there was a gasp of protest from royal watchers, Buckingham palace quickly quashed any concerns about breach of protocol. It tells us a lot about the British Monarch  who recognizes the changing "flat world".

The camaraderie of the G-20 leaders also sent a strong message to businesses around the world  that we live in one world and must work together to solve the problems of our time, notably the current economic crisis.

Does this mean that all Governments are on the same page? Will global B2B and supply chains  become seamless - immediately?

Or at a more mundane level will wireless phone providers  start charging the same domestic price for global roaming? Not immediately but we'll get there probably sooner than we imagine!

Mumbai Terror and Upstream Risk

The Mumbai Terror attacks have been constantly in the news for the last few days. Now its time for Mumbai and India to recover. This time political leadership concerned with homeland security have been forced to resign. Next it'll be the turn of bureaucrats who slept through early, very specific, warnings received from the Indian federal intelligence agencies. What if the Maharashtra state ( Mumbai earlier Bombay belongs to this state and police is a state subject) apparatus had reacted to the specific information about both the sea attacks and the hotel names? These questions will be investigated in depth for long ... as everyone comes to grips with an avoidable and immense tragedy.

Although somewhat unsettling for busineeses that buy from and sell to India, I was pleased to see no let up to travel to India (and Mumbai)  yesterday at the Newark Airport.

The events of the past week  brings to sharp focus of fixing problems upstream in supply chains and also for management in general. Generally, for services there is this whole "redundancy" thing that allows for delivery from alternative locations in case of  sudden disruption. Explicit  planning for contingencies ahead of time, right at the contractual stage, is a good idea. Disrupted operations or liquidated damages  don't  really solve business problems.

And change in modern cultures- Barack Obama

Barack Obama is the President Elect of the USA. Not many "young" cultures or countries or even "older" ones can claim to usher in such change. Remarkable and only in the USA !

An interesting dynamic of this election is the support of the American youth for Barack Obama. The Obama campaign was able to galvanize the youth,turn them out and since the Generation Y or echo boomers have great relations with their parents and grandparents this historic change became possible as the young were able to persuade their older relatives.

Now, time to get back to work!

"Hot Flat and Crowded" The ET industry

Thomas Friedman was on NBC with Tom Brokaw this morning on Meet the Press and was talking about his new book. Watch the video here.

I am a  fan of Friedman and of the flat world book. Tom Friedman observes the world and reflects and then tells us stuff which is absolutely compelling. In this interview Tom was calling for a new industry "ET" or "Energy Technology." Innovations in the energy sector has become absolutely critical. Why? Because each one of us is thinking about how to reduce energy consumption (have online meetings, merge errands, get a better oil burner and so on). The global market is simply hungry for energy innovations and Friedman's book is timely. Friedman is calling for hundreds of thousands of innovators in the "ET" sector who would come up with ideas and even if a few succeed as with the IT revolution,the world will be a better place. It'll be greener and better for succeeding generations.More on this, after I read the book.

How do you green the upstream supply chain ?

Recently there is a great deal of discussion about sustainability and the importance of going green with the supply chain. For example, SCDigest has a great summary of the recent McKinsey report that mentions that 80% of the carbon footprint for many companies comes from the upstream supply chain. Also, there was a Zurich summit in February that tried to put arms around greening logistics and transportation.

The question  is, how do you action some of these genuine concerns in the running of your upstream supply chain? For starters, just asking suppliers by way of introducing a clause in RFP's would help, straight away. Many suppliers would tell you that small lot orders  on a part-truck basis or by urgent airfreight simply add to the carbon footprint. Similarly rationalizing secondary packaging could go a long way in both reducing cost and improving the environment. "Green metrics" very similar to calorific values of foods would make decisions easy to make. The IT industry is attempting to do this, more traditional businesses need to follow suit in obvious,somewhat routine subjects  like a defining a "Green" RFP clause, coming up with a "Green Transportation metric" and reviewing secondary packaging "green" options.

Worldsourcing-made in this planet

Kudos to William J. Amelio  of Lenovo for coming up with, and promoting the concept of "worldsourcing". Today Business Week  carries a story and this earlier piece on BBC is also enlightening. Bill Amelio advocates lightening up on the "outsourcing" label and the superior attitude that prevails in the wealthier countries vis-a-vis the booming but earlier poorer countries,particularly of Asia. According to Amelio, thinking of the world as one market and therefore one sourcing point suddenly opens up great possibilities for both picking up innovative ideas and developing new markets with a global well oiled supply chain and distribution channel.

Jack Welch, in one of his books recalls how one of his senior managers in GE was disdainful of  his direct report Indian scientists for no other reason than their location as they operated out of the GE India facility. With "neutron" Jack, the manager off course, did not last long and GE went on to become a leader in what Bill Amelio calls "worldsourcing." Indeed, thinking of the world as one place and one opportunity suddenly changes the scene, not only for big business but for the smallest entrepreneur.Quite simply, some places in the world are booming as markets and excellent low cost suppliers are eager to serve your business from other parts of the world.More flexibility and openness is what is called for....