6 Ways to Unlock Value Within Your Marketing Supply Chain
This blog was contributed by Stephen Marshman, business development director, SGK.
As part of the Business Development function at SGK, I am increasingly fortunate to be working alongside our Client Solutions team. This talented group is SGK’s consultancy division; a dispersed global community with diverse backgrounds united by the common goal of helping our clients unlock value within their marketing supply chain.
Tasked with delivering growth, I find partnering with the Client Solutions team often provides a productive starting point for a conversation with a prospective client, rather than simply navigating them through a range of traditional graphics service offerings.
It’s not really a surprise.
The rewards for our clients and prospective clients are significant, with projects usually delivering savings far in excess of what a company would spend on artwork or pre-press, for example. So I’ve been on a steep learning curve to better understand where we might start looking to explain why a marketing supply chain isn’t working as well as it should.
Of course, the reasons will be many and varied and differ from company to company but I thought I’d share the top six I’ve encountered to get the ball rolling.
The organic process evolution effect.
One of the fundamental challenges a lot of businesses face is that parts of their marketing supply chain (and in some cases the majority of their supply chain) have been inherited. As anyone who works for an organisation where growth has come largely through merger and acquisition will know, despite the best efforts of programs that aim to harmonise and optimise processes and systems, where standardising such aspects of how we work is not deemed a top priority, old ways of working will remain in place.
In some companies this tendency can become a real impediment to efficiency; in the absence of a strategic approach, there will often be layer upon layer of process that has evolved organically. In a global organisation, even the same simple activity within a process, such as how a code is generated, for example, could be reliant on multiple different processes across the organisation.
In such an environment, making wide-reaching improvements can be tough. No one wants to give up their way of working; people are generally very protective of their method of doing things. In this context it is sometimes necessary to return to a blank sheet of paper and set about designing the optimum solution. To do this often requires facilitation by a neutral third party.
This is currently a very fashionable term but it took an unexpected example from a long time ago to help me understand it. I grew up in Britain in the 1970s, so I apologise in advance for using a cultural reference that reflects this and potentially alienates those who grew up in a different time and space.
One of my childhood TV favourites was a children’s show called Bagpuss. The titular character was a toy cat made of cloth who really didn’t do a lot (beyond yawning) but he shared the stage with a wooden woodpecker called Professor Yaffle and some seemingly industrious toy mice. And it’s these mice that are exposed by Yaffle as harbouring a “Hidden Factory”.
The mice have an impressive looking chocolate biscuit factory. Ingredients in large sacks are hoisted in at the front, there is a lot of feverish mouse activity and then a perfectly formed chocolate biscuit rolls out of a chute and is whisked away in a tiny truck.
Yaffle – a process engineer ahead of his time – is sceptical. Why can’t he see what happens to the ingredients? Why is the finished product taken away so quickly? It looks like a lot of activity is happening but it’s all taking place behind the scenes.
Soon enough our intrepid woodpecker exposes the mice as frauds. They are simply recycling the same sacks of ingredients into their factory and then wheeling out the same single chocolate biscuit every time. They’re not producing anything. As a four-year old I was probably bitterly disappointed that the factory wasn’t really making chocolate biscuits but forty years on I see how it's a great example of the hidden factory problem.
Of course, we’re not talking about fake production lines here but how many of us can honestly say that there aren’t processes and practices that exist within our marketing supply chain where no one is really sure what value they add?
Like the mice, it is not unusual to find organisations where people are often overwhelmed by the work they do but where it is not always clear that those activities are providing a clear business benefit, let alone being optimised. Sometimes we need a Professor Yaffle to take a closer look.
A lack of good data.
Nearly every time I’ve been involved in implementing a new process for a client, there are people on the Steering Committee who, quite rightly, want to make sure that the new way of working (and usually the new supplier) will be able to deliver all the efficiencies that were promised.
For me, this is standard best practice and should be part of any new engagement. What is quite revealing however, and frequently hampers this objective being achieved, is how difficult it is to arrive upon any reliable data that provides a true picture of the current state. I am often surprised at just how little good data exists within businesses so that they can actually make informed decisions about marketing supply chains in the first place.
Of course this problem is not universal and you may be reading this from the fortunate position of having reliable data about how your business is performing but all too often accurate data isn't there. Benchmarking is impossible and if not addressed a lack of good data inevitably leads to sub-optimal decision-making and poor prioritisation.
It’s almost always about the input.
This one shouldn’t come as any surprise. What is surprising is how often an organisation doesn’t address the issue. It’s all too common to see a defect tolerant mentality in operations whereby stakeholders will find sometimes elaborate ways of accommodating poor inputs and develop workarounds to mitigate, rather than address the root cause.
This is not a fix and it certainly doesn’t help in the quest for efficiency.
The earlier defects enter the supply chain, the more destructive their effect. The cost of correcting something at the end of the process that was wrong at the input stage will almost always be greater than the effort required to develop a sustainable solution. In the graphics supply chain a defective input that can go undetected can have a disastrous impact, not just in terms of costs but also in terms of quality and reputation.
My popular cultural reference for this one comes from the classic rock mockumentary This is Spinal Tap. The film follows a rock band that wants to make a big impact with their live set and decide that having a full size replica of Stonehenge descend during the gig will do the job. Unfortunately, they mix up feet and inches when they specify the dimensions and the replica stones are barely knee-high.
Our end product might be an artwork file rather than a replica model of Stonehenge but we will also feel the pain of not having inputs correct upfront.
Technology has to fit.
Technology, when correctly specified and deployed, is of course one of the greatest ways of improving marketing supply chain efficiency. The difficulty here is that technology solutions are frequently implemented before the business case is properly developed and understood. In these instances, technology can often become a blocker rather than an enabler.
Over-engineered solutions can end up slowing down and suffocating the process they were designed to streamline. On the one hand, technology can become a limiter that inhibits potential but the equally dangerous ‘shiny new object’ syndrome that causes businesses to be deflected from core activities as users become too focused on the technology in its own right.
Another technology issue arises when multiple systems are part of the supply chain but have very little integration. I have seen people on packaging technology teams and artwork coordination roles crippled by processes that require them to collect, transfer and duplicate data across multiple systems to make the tiniest steps forward in a workflow. Technology should be our friend but when badly designed or deployed, it can also become a major barrier to optimising the marketing supply chain.
Decentralisation hinders efficiency.
When the ‘centre cannot hold’ things fall apart or so the WB Yeats poem tells us. We might not want to take this too literally, but it’s certainly the case that a heavily decentralised organisational structure can make supply chain efficiency much harder to achieve.
Closely related to the process evolution effect described above, where businesses are highly siloed and lack enterprise-wide focus, attempts to implement global efficiencies are often frustrated.
In the graphics world, fragmentation takes different forms: regions or markets wanting to work in their own way, individual brands developing bespoke processes and, in organisations where there is a manufacturing-led approach to the graphics supply chain, it is not uncommon for each production site to have its own completely unique set of processes, practices and systems.
I think it is an oversimplification to assume that a decentralised structure will always be inefficient and, by extension, that a highly centralized approach will always deliver optimized results. In fact, a failure to recognise the nuances of certain markets or brands can be equally damaging, but it is still undoubtedly the case that those organisations that can effectively identify aspects of their supply chain to centralise, standardise and harmonise have a distinct advantage in terms of delivering efficiency.
So there it is, a brief look at some of the reasons your graphics supply chain might not be fulfilling its potential. If the above challenges are currently evident in your organisation and you’d like some help in addressing them, please get in touch. Failing that, by way of cultural personal indulgence, why not treat yourself this weekend to Bagpuss, This is Spinal Tap and the poetry of W.B. Yeats.
About Stephen Marshman: Stephen has twenty years’ experience in the artwork and packaging sector having begun his career with graphics specialist SGK in 1997. Today he works as a Business Development Director, focused on helping companies implement best practice artwork processes.
Stephen played a pioneering role in the development of SGK’s unique approach to helping clients implement process improvements more than fifteen years ago and remains a key part of the global team today. Earlier in his career he enjoyed a range of client-facing roles, including working on-site at clients’ facilities, providing him with valuable first-hand insights into the specific supply chain challenges organisations face.
The Rise of the Tailored Agency: An Evolved Content Support Model
This blog was contributed by John Lawrence, Director Client Solutions, SGK Europe
Brand marketers, agencies and procurement partners of today are all paying more attention to the rise of the Tailored Agency — a bespoke ecosystem of external agency and in-house competencies arranged to drive connected content.
Marked contrasts to traditional hierarchical strategic to production models, connected content responsibilities are re-defined to ensure an appropriate mix of long cultivating big ideas and speedy content delivery to channel. This shift is being driven by the pressures of cost, a need for greater control, expanded scope, scale and velocity of change.
Mercedes-Benz (Antoni), Kohler (In-house), McDonald’s (We Are Unlimited), Jaguar Land Rover (Hybrid agency/In-house capability) and Redbull (Redbull Creative) are but five major global brand examples of this well-publicised change in approach.
These forward-thinking brands have not only acknowledged but have adapted successfully to this new way of working by striking a key balance between agency and in-house capability. There is a trend of brands approaching supplier selection with an initial in-depth audit of current and future requirements and designing and implementing human resources, technology, processes and agency support models accordingly.
SGK’s Client Solutions team has worked with several multi billion-dollar organisations across media, retail and CPG to achieve just these aims with significant and on-going success against their unique objectives.
Can this global trend service the future?
Today we are observing the initial emergence of a game-changing new agency model and brand relationships that are being driven by consumers and enabled by technology. New Tailored Agencies bear many of the hallmarks of the past full-service agency thinking — a consolidation of service partners and the intention of stronger relationships to solve for the challenges of today and tomorrow.
The true value of an agency supplier in the present and future lies in the ability to provide a dedicated expert service and handle complex, technical tasks across a range of content channels. This is an extension to the marketing capability that requires the agility to change and the capacity to connect and streamline content creation and delivery.
INFOGRAPHIC: The Cost of Marketing Supply Chain Inefficiency
The age of inflexible, swaggering agency hierarchies is at an end with a greater emphasis on empowered, flat and flexible models. There will always be essential underlying competencies, from consumer insights through to production specialists across channels that make up the foundation of any content delivery model.
It is also important to recognize that there isn’t necessarily a best of class content strategy and execution structure unless you build it to your brand’s specific requirements. Each model will require a subset of competencies to be arranged in a bespoke and evolving structure as best fits the brand need and financial reality.
“As a marketing leader, you must build an organization capable of supporting a rapidly evolving set of requirements.” Gartner CMO Survey, 2016
Is this right for you?
It is certain that there is value in the fresh perspective of external agency support in new or traditional formats — providing a wider experience in sector and multi-sector — that brand marketers may not have access to in-house.
Equally, offering clarity and understanding of the brand’s specific and evolving needs prove just as valuable. This requires mutual transparency, intelligent risk taking, long-term thinking, flexibility and a critical focus on a client-centric solution. The challenges faced by modern marketers are better met collectively and proactively, making great teamwork all the more valuable.
Brands are challenged by the need for connected content which has generated complex challenges including:
- Multiple processes across channels and business lines
- Inefficient workflows
- Poor inputs and cumbersome hand-offs
- De-centralization – reducing prioritization and efficiencies
- Limited control, poor quality, expensive, inconsistent
- Duplication • Inappropriate resource (skill, size, availability, etc.)
- Inability to respond to changing market needs
- Lack of decision-making data
If this is true to your organization then it is likely there is a proliferation of agency partners that have amplified some, if not all, of these challenges and you are unlikely achieving your desired outcomes.
“The great majority of both agency CEOs (68%) and brand CMOs (72%) agree that current agency structures, processes and pace of delivery are not evolving at the same pace as a brand’s needs.” Creative brief Survey, May 2017
A more traditional hierarchical model will simply add to these challenges and so looking beyond the status quo and shaping your content delivery model will help to achieve your current and future vision. As the content world continues to evolve, you need to be actively thinking about how to adapt to future requirements to ensure you can keep up with the shift.
Setting up for success – how to make the model a team.
The biggest challenge is not agreeing on the principle of a tailored approach but setting up for success. The main risk is defaulting to a supplier-customer model before the ink on the contract has dried.
Taking all stakeholders on the journey is the only true way to achieve success. From establishing a clear State of the Nation for the executive board and gaining approval to execute your desired model, to the diligence and hard work of achieving clear and ongoing engagement with internal and external audiences, which never ends. Leadership vision, involvement, communication and teamwork are fundamental to managing this change successfully.
The aim must be to become one team. The model is just the start, the opportunity is to build it out in a way that makes it yours and differentiates it in the same way your objectives and challenges as a business are unique to you. Nor should it be static. As requirements evolve, we should adapt to sustain success in the same way consumer demands are constantly evolving and require you to adapt.
How are brands set up to deliver content today?
Through our experience, we have identified four core archetypes:
- External ‘Power’ Advertising Agencies: Content is created by 1-3 global power advertising agencies that have ‘intimate’ relationships with a network of production agencies.
- Portfolio of Agencies: Content is created by a large portfolio of agencies, projects are briefed based on individual marketer relationships. 3
- Portfolio of Specialist Agencies: Content is created by a portfolio of specialist agencies and projects are briefed based on required deliverables.
- Client Internal Studio: Content is created by an internal client-owned creative and production studio that may utilize a small network on a per-project basis.
The most common trend is that brands are increasingly looking to migrate to a model that delivers higher leveraged and optimized spend providing greater control, brand understanding, evolving specialist skills and consistency across channels. Coupled to this is clarity on creative and production responsibilities to maximize value of partners, driving savings and efficiencies. There is no one best-in-class solution but there is a great opportunity to define what that might be for you today and in the future.
How can we help?
We believe there is an optimal approach to understanding and shaping the way marketing functions operate to drive connected content to achieve business objectives. Getting started is actually quite simple and straightforward — we’ve done it before and hope to do it again with you.
About John Lawrence: John brings 15+ years of experience in brand marketing--both agency and brand side. Operating as a consultant for global, regional and national organizations, he provides Continuous Improvement (CI) projects from consultancy through to implementation across channels. As a member of the SGK Client Solutions Team, John has strategically led initiatives for some of the world’s most prominent brand owners to increase their speed-to-market, reduce costs in the marketing supply chain and better utilize their internal and external resources.
Innovation: Individual Genius or Collective Evolution?
This blog post was contributed by John Lawrence, Client Solutions, SGK Europe.
Is innovation within organizations driven by the competence of individuals or generated as part of a wider discussion among a community?
The term “Genius” is often used to describe innovators – individuals recognized as the drivers of change and ideas, but just as often supported or ‘fed’ by a huge network of collaborating groups who have been given the license to share both challenges and solutions.
Genius [adjective]: showing unusually great intelligence, skill or artistic ability It is my opinion that the description
Genius is misunderstood. I do not intend to play down the intellectual accomplishments of this group of people but more to highlight a skill within that description: they are exceptional listeners.
“A genius idea” is always something that fulfills a need. In order to fulfill a need, you must first and foremost clearly identify the need. But amongst so much noise, how do you hear the true need? The greatest innovators are the ones who have learned to listen. Their moment of solution or clarity is often called a “light bulb moment,” but reality suggests that the light bulb was initially turned on earlier by something that stimulated the idea – an experience. Innovators must have heightened listening skills in order to absorb that experience and identify a subsequent opportunity.
Innovation in business is most often associated with commercial advantage or efficiency, and rightly so or it wouldn’t make business sense. When innovation can get off track though is when suppliers look to solve business needs in isolation. Focusing on developing products or services just to create a wider portfolio instead of responding to a threat or client request may result in a futile exercise and failed innovation. If the fundamental requirement of a ‘genius idea’ is listening, then it holds that successful innovation cannot occur in a vacuum.
If innovative ideas seldom come from an isolated approach, then they are far more likely to succeed through mutual collaboration between a supplier and client. This collective pool of insight, resource, and skill creates a rich environment for ideas that can then be validated and implemented through a controlled and measured process. The significance of culture cannot be overstated. In order for a successful innovative collaboration to actually get off the ground and then succeed, it is a pre-requisite that both supplier and client have cultures that foster an environment of sharing and risk. In these environments, ideas will appear and in some cases disappear just as quickly, but there is a platform for the greatest ideas to prosper be championed.
For any Game of Thrones fans, you may remember a poignant moment in Series One of the show when King Robert Baratheon asks his Queen (Cersei Lannister) an apparently simple question: “Which is the bigger number, five or one?” (King Robert Baratheon, Game of Thrones). He then holds up a fist with his right hand and an open palm with his fingers extended on his left.
In the context of innovation, the answer is simple. A consolidated single driving force of many is far more powerful than the genius of one or disparate ideas that can only be taken so far. A true genius or innovator is someone or a group that can capture the collective power and insight of a wider group and harness that to drive an idea forward.
Understanding the context, culture, and characteristics of innovation is important because:
- 93% of executives are looking to innovation to drive growth (PwC Survey of 1,757 Corporate Executives)
- 49% of organizations have initiatives to grow via reducing costs, only 29% have initiatives to grow via new products or services (Board of Innovation)
- 15 months is the time Slack, a team collaboration tool, needed to reach a $1B valuation
To innovate is no longer a question but a demand, which is why SGK has created a formal central global team, Client Solutions, to focus on innovation, foster it through the business, and collaborate with key client partners and subject matter experts to deliver meaningful new products and services to a wider audience.
To learn more about SGK please visit www.sgkinc.com.