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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.

Will Budweiser change?

The news that InBev has taken over Anheuser-Busch for $52 billion is a major event for both marketing and the supply chain.Although,initial reports suggest that the big benefit of the merger is the enormous brand power and marketing muscle  of "Bud" in the US market,it seems likely that the new management will review  some of the traditional advertising  that Budweiser has been known for.Also,a focus of the American entity will be to cut supply chain costs by $1.6 Billion.

College classrooms will suddenly find the enormous marketing teaching material developed around the "Budweiser" brand outdated. Marketing clubs routinely discuss the Superbowl ads, dominated by "Bud" and things may change there as well.Similarly the famous supply chain beer game will probably need some reworking.

In fact, the merger will throw up enormous opportunity and challenges,not only for the merged entity but entire armies of consultants,speakers,professors and students will suddenly have to take a fresh look at global alliances, in this case a merger, and it's impact on something we assumed would never change viz. Budweiser and it's larger than life dominance in the American psyche.

For starters, consider the InBev website's brand section that asks you your country of residence and date of birth while the Anheuser-Busch website asks you if you are over 21 and simply assumes US residence. All this will start changing as "Bud" becomes truly global.Similarly, before making any marketing changes in a great marketing formula, the new A-B-InBev organization should sure tread carefully lest we have one more "New Coke."

The Conceptual Age - reporting from ISM 93rd Conference St. Louis

Just returned from a wonderful conference - the ISM 93rd at St. Louis. St. Louis is a nice place and the conference center was great as was the metro train transportation which I used to check out a surprisingly great Indian Restaurant, Rasoi.

There were many great sessions throughout the conference and I will probably allude to them in future posts. However, Daniel Pink as the lunchtime speaker on Monday simply resonated with me and many other participants. Pink did not probably say something totally new but did manage to convey his message really well.

In a nutshell, Pink said that three things were changing our world, particularly in the developed West. These were Abundance, Asia and Automation.  His illustration of abundance was rather neat in that the rather new self storage industry is for the extra "stuff" we have gathered and the self storage industry exceeds 22 B $ and is larger than Hollywood. Asia  and the impact of China on manufacturing and India on services is well known as are the burgeoning markets and aspirations in these countries.  But it is automation that is the clincher of  the "conceptual age". If it can be codified and written down it will be either outsourced or automated, preferably automated. Interestingly, it is not Indian accountants that took over all the tax returns but the 29 $ software you can buy at Wal-Mart to file your taxes. Why would you pay 100+ $  to a tax preparer ??

This leads to Daniel Pink's thesis that it is necessary to have a prepared left brain that is analytical, sequential and is geared to doing well in the SAT. However, the left brain alone is not enough because by definition what the left brain can do, can be codified,written down and then outsourced and finally automated. So beyond the left brain is developing the "conceptual" skills of the right brain that 's about synthesis, modeling and innovation in your field of expertise no matter what your "left brained" expertise is. Very interesting and provoking and so thought many of the participants I talked to.

You don't repeat reverse auctions!

Reverse auctions are controversial. Suppliers bid their lowest rates on-line and prices keep going down and the buyer's organization is happy. Inefficiencies in the supply chain reduce, transparency increases and suppliers are on their toes. Sounds not very collaborative and that's what I had though so far till I went yesterday to the CAPM Seminar "Sourcing the Pfizer Way".

The seminar was held at the Global R&D center of  Pfizer,Groton  and was kindly organized by Mary Kachinsky of Pfizer and participants learned a great deal  about sourcing particularly  in a knowledge intensive environment where all your internal clients are highly qualified  scientists and physicians involved in drug discovery.

I had missed Sam Dowell's great presentation at NECON 2007 where I had presented as well. The "aha" moment came for me, when I realized (after a question) that you don't repeat reverse auctions. You do them initially to rationalize your supply base and also when you are checking out overseas suppliers for price. You invite bidders after a thorough pre-screening and always invite several suppliers in multi-country reverse auctions so that there is enough "same country" competition. And most important, you do not necessarily go with the lowest bidder and make that very clear, upfront. But once you decide suppliers you try to make the relationship work ...

GNHCC Business Expo 2008 with AMA-CT ,Google and Seth Godin

Last year I had spoken at the GNHCC Business Expo and the expo  was great. This year I was unable to attend but requested my Internet Marketing and E-Commerce class to attend and also help out with the AMA-CT booth. It was really nice of the students to attend the expo and also listen to the excellent  talk"Web 2.0: Trends in the Digital Landscape" by Mandy Gardiner, Team Manager Google Inc. And here are the photos.....

Clearly, the organizers of the Expo have moved into Web 2.0 marketing as they had got Seth Godin, Web 2.0 Marketing Guru to be the lunchtime speaker. Tod Kallenbach the AMA-CT President gave me Seth's new book "Meatball Sundae" and I just finished reading it. Fascinating......

Corporate Social Responsibility

Last week my article in the Inside Supply Management of December 2007 appeared in print. This is a short piece on Corporate Social Responsibility and what the supply manager can do to contribute to Corporate Social Responsibility. I talk about three areas first the Global Supply Chain and quality problems (eg. toy recalls), supplier diversity for global suppliers and greening of the supply chain. All three topics are important for the supply manager, going forward and things that would resonate with enlightened CEO's and company boards. Inside Supply Management is well circulated and is a monthly publication and covers some great and relevant content. The article itself can be downloaded here.

e-Sourcing Workshop by Jim Kelly

The e-Sourcing Workshop  by Jim Kelly (of JVKG  )  turned out to be brilliant (check out the photos above).Here was someone who had worked for many years in procurement  and was able to bring out the practicalities of technology adoption in the automation of requisition to procure and pay in a variety of industries.

Later, I had a quick discussion with Jim about how B2B research looks at the e-procurement problem. B2B researchers look at buy tasks as a new task or modified re-buy or straight re-buy with major implications for B2B marketers. Similarly, procurement folks, being key members of buying centers have an urgent need to convert products and services to "straight rebuys" that allows the buying process to really reach out globally for suppliers. And naturally, it is far more easier on e-procurement when requirements are standardized.

A great insight from Jim's talk was, for me, a better understanding of  the nature of the organizational e-procurement process. Consider a three year contract that is negotiated using an e-procurement system. The buyer who works on the system would typically move out of her/his role in three years when time comes to  put out an RFP for the new contract. Institutional knowledge  of the RFP process for the commodity in question is lost and the new buyer has to start all over again.

From supply chain to "global value chain" a report from NECON 2007

I returned from NECON 2007 and was struck by a major change in the supply profession from 2006. In three  words "global value chain," in contrast to the narrower "savings" theme of the previous year.

While in 2006 there was some talk about managing the global supply organization and global suppliers - this time I found a distinct shift in the way speakers addressed these two issues. Large corporations like Pfizer are clearly thinking globally for both managing the supply organization and suppliers. The ISM Chair Lisa Martin's talk was just superb and covered the global value chain imperative succinctly.

Stephen Slade's  talk explained how software today can help with making the entire value chain more visible across global operations.Similarly the panel discussion on outsourcing clinical trials had a star panel of both buy and supply side experts and the panel brought out the complexities of the global contract research process.

I was motivated by all the exciting sessions to add slides to talk some more about the "low cost country" aspects rather than only focus only on the difference between business processes and knowledge processes. I too emphasized the "value" chain perspective in the context of low-cost country sourcing.

Overall, a great conference !

What's next for the US Small and Medium Manufacturer ?

The GNHCC Business Expo 2007 turned out to be a huge rallying of small and medium companies in the New Haven region. Tireless efforts of the organizers and various supporting organizations,associations and well wishers of New Haven businesses made the event a great success.  As I wrote earlier - I was on the  CAPM panel

From GNHCC Busines...

for "Procurement Strategies for a Global Economy". The event set me thinking about the future of the US small and medium manufacturer. The venue of the expo was the old Winchester factory that was closed down and renewed calls to "re-capture" the past "glory" of manufacturing left me somewhat confused. Is that possible or even desirable?

Unlike Japanese companies who take their good suppliers to overseas markets, large US companies simply expand overseas and do not take care of their US based smaller suppliers. I have no formal data but would guess that most small companies who supplied to larger firms who moved out had to fend for themselves. They embraced cost cutting and six sigma, cut manpower, alarmed young people into avoiding studying science and engineering and generally went into a downward spiral.

Even at the EXPO the tone was of "defending" manufacturing rather than "attacking" new markets. In my presentation on "5 Quick tips to add value to your global supply chain" I emphasized that new global markets like India and China had the biggest US companies and these companies were trying to develop a local supply base. For example, the Small Scale Industries Association of Kartnataka, whose capital is Bangalore has over 3000 members and many of them will be eager to tie up with the smaller manufacturer from New Haven and then help tap markets in South Asia,Middle East, Central Asia and Africa.

The question is - how much the small and medium sector is willing to venture globally? If they did actually appear in some form in other global markets I am sure that their old US customers who moved overseas will like to do business with them.

Procurement Strategies in the Global Economy

Coming up on Wednesday 17th January 2007 is the Greater New Haven Chamber of Commerce Business Expo 2007 organized by the New Haven Manufacturers Association and the Greater New Haven Chamber of Commerce. The very first panel discussion at 10.30 am is on "Procurement Strategies in the Global Economy" which is sponsored by the Connecticut Business and Industry Association (CBIA) and the Connecticut Association of Purchasing Management(CAPM).

I am on this panel with the topic " 5 quick tips on adding value to your global supply chain,"  alongwith members of the CAPM. At last count 35 people had registered for the session and I am putting finishing touches on my "5 quick tips". For this predominantly manufacturing audience I am going to emphasize the huge global opportunities there are for the entrepreneurial American manufacturing firm. As I mentioned earlier in this blog, for example India is buying commercial aircraft at the highest ever rate in the world. All these aircraft engines need overhaul in due course and US aircraft engine makers would be really pleased to see local repairers who are partners of known smaller US firms but are available in India to provide service. In other words my "first tip"  is  to encourage manufacturers to be "South " focused. "South" in my supply chain view is the customer at every downstream link of the supply chain and distribution channel. South also is Mexico ,Brazil and other low cost- in-US locations like Kentucky.

My next "tip" is to look " north" in the upstream supply chain - geographically to Canada and at every link upstream on  your particular supply chain. My third and fourth tip is "East" and West". These are  the geographies of new suppliers and markets ( East with China, India, Middle East and Africa) and the new West being former Soviet countries, new NATO members who are so keen to globalize. At a metaphorical level "East and West"  are looking at industries that are different but that can give huge ideas. For example as Eric Von Hippel says in his lead user research - the auto industry got the idea of ABS brakes from aerospace folks who had the urgent need to stop planes quickly and with no uncertainty on runways.

My fifth "tip" is to enhance your personal network. Just as I mentioned in an earlier blog, college kids today have 300 contacts on their Facebook. Each of those contacts would reply to a query pretty fast..... no matter where they are on the globe. There is no reason that an entrepreneur in the Greater New Haven Area cannot systematically maintain contact with at least those they already know.

In summary my "5 quick tips to add value to your global supply chain" is to look "South,North,East, West and Around" your own present supply chain!

If you are in the area do check out the Business Expo at 25 Science Park at Yale University, New Haven on Wednesday 17th January.