Successful tactics for the sourcing of point of purchase (POP) materials Brought to you by LeanPie 23rd June 2016

ESTABLISHING LEADERSHIP AS A MARKETING PROCUREMENT PROFESSIONAL

CONTENT

1.Author’s note

2.Key principles for Marketing Procurement professionals

3.Critical value drivers

4.How to ensure Marketing engagement

5.Become a marketer

6.Achieve a position of influence

7.POP supply chain specifics

8.Introduction to LeanPie

9.Contact Us

1.AUTHOR’S NOTE

“The most dangerous kind of waste is the waste we do not recognise.” “Improvement usually means doing something that we have never done before.”“A relentless barrage of “why’s” is the best way to prepare your mind to pierce the clouded veil of thinking caused by the status quo. Use it often.” Shigeo Shingo

Marketing procurement is difficult but it can be made easier. It is a simple case of alignment. If marketing and procurement are working towards different objectives, it is always going to be challenging to make the relationship work. However if there is collective agreement on what both parties are seeking to achieve then a successful working partnership can be established.

So how do you go about ensuring alignment by two very different disciplines? The key is to both focus and agree on a uniform set of outcomes that are geared towards creating the highest level of customer value possible.

When you consider the principles of Lean Manufacturing, you might initially think that they are directed at creating a more efficient supply chain. BUT that could not be further from the truth. In reality Lean Manufacturing has simply come to mean a systematic method for the elimination of waste. This takes into account waste created through overburden and also waste created through unevenness in work. Essentially, Lean is focused on ”making obvious what adds value by reducing everything else”. In this context, “value” is any action or process that a customer would be willing to pay for based on their external perspective.

If you are able to shift your focus onto removing waste and thereby make more investment available for creating customer value, you have the formula for creating a successful partnership with Marketing.

This eBook provides some guidelines and tips on how to build a successful and valuable relationship with Marketing. I hope you will find something of value.

David Newberry

2.KEY PRINCIPLES FOR MARKETING PROCUREMENT PROFESSIONALS Here are some key principles that will help you unlock value in the marketing supply chain.

DATA Clearly everything starts with data. This is the biggest challenge. You cannot rely on Purchase Order or invoice information. You must establish a set of processes that enable you to capture the information you need when you need it.

Real-time Ensure that data is provided in real-time, so you can actually influence the outcome delivered, at the time of decision-making.

Actionable insights Insights only have value if they are actionable. All insights need to be presented with practical and achievable recommendations for immediate action and value creation.

Decouple and reassemble Marketing is complex and requires many pieces to come together to create a final outcome. Often all these elements are unseen with limited visibility into the constituent parts. You need to decouple, get to the detail and then reassemble them back into an end-to-end fully integrated supply chain.

Categorise

It is critical to be able to identify areas of synergy and therefore you must have a uniform means of categorising spend areas to which all stakeholders are aligned.

Total Cost of Ownership (TCO) Marketing is always focused on the final outcome and therefore procurement must always consider the entire process for delivering that outcome. If you optimise five stages of a supply chain but one is broken, then the outcome will always be less than optimal.

Outcomes Marketing focus on outcomes. Make sure your emphasis is on value and ROI.

3.CRITICAL VALUE DRIVERS When you shift your focus to creating customer value, the value drivers are really the same it is just that you approach them in a different way.

Waste reduction Clearly generating cost savings will still be the number one priority of a procurement discipline. However rather than focusing on margin reduction, switch the emphasis to finding and removing areas of waste from the supply chain e.g., time spend on the project by all stakeholders, level of re-work required, materials never used and left in a warehouse, overtime caused by approval delays.

Removing constraints Most waste arrises from the fact that there are organisational constraints in place. These usually arise from poor information sharing, lack of effective communication, inefficient processes, poor definition of responsibilities e.t.c. It is important to identify these and then develop and implement relevant solutions.

Handovers The major reason that you have waste in a supply chain or an extended cycle time is all down to how well hand-offs are managed. It is when there are handovers from one party to another that supply chains breakdown. Strive for FLOW and assess each handover in depth to optimise the process, information flow and ensure responsibilities are clearly defined.

Innovation

Always look for a better way of achieving the same end goal. Consider all the options available, test the various scenarios and implement those that provide a clear difference between current (AS IS) and future state (TO BE).

Consistency Marketing rely on a consistent level of delivery. This helps build reliability and trust and is a cornerstone of effective team collaboration, especially when working with external parties. Establish best practice methodologies and ensure they are rigorously applied.

4.HOW TO ENSURE MARKETING ENGAGEMENT Marketing programmes are becoming more and more complex and often require multiple parties to work together to achieve a successful outcome. There are two important factors that ensure that teams can work cohesively together:

1.Team principles The challenge with teams, especially when they comprise representatives from different companies, locations and disciplines e.t.c. is that they often have a different understanding, perspective and viewpoint on what needs to be undertaken and by who. The best way to overcome this is to apply the seven best practice principles for leading change:

1. Inspired by purpose (well-defined clear goal or desired outcome) 2. Focused on a shared journey (detailed process for achievement) 3. Accountable and collaborative mindset 4. Right skills in the right roles 5. Strong and clear interdependencies, reinforcing team agreements 6. Advocating strategies from a customer value perspective 7. Laser focused on implementation that resolves primary constraints for the highest

impact and return on investment (ROI)

2.Team interaction It is really important to understand the importance of effective interactions in building cohesive and aligned teams. If team members are not able to meet face-to-face, then it is critical that some key principles are established to guide communication and interaction best practice. This would include:

• Communication device; use video when not co-located • Culture and diversity; help align team members around how to share information,

build understanding and ensure agreement on decision-making • Meeting etiquette; huge amounts of time can be wasted in meetings. Set some

principles for how meetings should be conducted and how outcomes should be shared and acted upon

5.BECOME A MARKETER “76% of all americans have at least one brand conversation per day” “15% of every conversation includes a branded service or product” “122 marketing relevant conversations per person every week” “19% choose brands solely due to recommendations” Fizz Marketing

Everyone is a marketer! Every employee represents the company with every interaction that they have with an external party. The way that each interaction is handled can have a significant impact on how that external party views the company.

On the basis that “Word of Mouth” is the single most powerful marketing technique, every action, conversation or communication that you have, will have an immediate impact on how the company is subsequently talked about. Everyone can make a difference. The question is whether it is positive or not? You must not kid yourself that the way you act does not influence brand perception.

I continue to be amazed that marketing procurement professionals do not understand this or at least do not act on it. If you behave like it doesn’t matter, then you will never understand marketing and you will spend all your time pushing water uphill.

If however you get it, you will be amazed at the difference it makes and the number of doors that will open for you. It really is a simple case of putting yourself in the shoes of the other party and representing the values and culture of your company in the best way possible.

Just because I love this so much; great marketing requires leadership and innovation, unshackled from the underlying desire to consolidate and commoditise.

“Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.” THINK DIFFERENT

6.ACHIEVE A POSITION OF INFLUENCE If you wish to influence your marketing peers then a sure-fire way to achieve this is to establish a position of respect and recognition in the external market. I am constantly amazed by the lack of voice and profile of marketing procurement professionals. Seek to become an external influencer and in so doing you will garner the support and admiration of your colleagues.

1.Leadership When you are able to challenge an existing way of thinking and provide a different perspective, this intrigues and inspires people to take notice. The more valuable the insights you provide, the more attention, respect and recognition you will receive. By “paying it forward” in this way you will start conversations, build knowledge, extend networks, capture supplier feedback and establish yourself as a leading pioneer in your specific discipline. You also help any potential external suppliers better understand your needs as well as bringing new supply sources to your door that may not have connected with you before. Add in the positive impact you will have on internal team collaboration and it really is a win:win for everyone.

2.Networking When Reid Hoffman created LinkedIn it was on the basis of unlocking the value of “Network intelligence”. His premise was that by participating in a broader network of peers you become better informed, smarter and a better leader. On the basis that within a company only 5% of the intellectual property of a company is documented with the other 95% in the heads of the smart people working there, doesn’t it make sense to tap that phenomenal talent and expertise? Then extend this premise to all other stakeholders, including analysts and suppliers e.t.c. and imagine the potential value. As they say, “Collective wisdom always outshines individual judgement.”

3.Learning culture Marketing procurement professionals should adopt a learning culture. The market is undergoing constant change, new disruptive companies are entering the market all the time and best practice business processes are continuously adapting. If you close your door to the external market then you will never evolve your thinking. “When a new company enters the market, why wouldn’t you want to know what idea made them take the risk to start a new venture. This can be gold dust?”

7.POP SUPPLY CHAIN SPECIFICS Each spend category is unique and offers up a different set of challenges for procurement to add value. Here are some valuable tips for the POP supply chain.

Debundle programmes • Get involved earlier in the process. The challenge with POP souring is that suppliers

act as one-stop shops and also do the design so when it comes to optimising the sourcing you are already locked in to a certain supplier

• Debundle design from sourcing and gain control over the design process and resulting Intellectual Property, technical drawings and tooling investment

Single supply chain • Every supplier is an individual supply chain. Bring all suppliers together onto one single

transparent supply chain to optimise opportunities for value creation • Use debundling to achieve full cost breakdowns for every step of the supply chain so

you know exactly where the investment is and also where areas of waste exist

Focus on the actual goods and services (rather than the suppliers) • Focus on what is required first and foremost and ensure that you then identify the best

suppliers for the exact goods and services you require. There is significant outsourcing by POP suppliers as they are usually only strong in one discipline.

Gain control over design, specifications and tools • Don’t look at existing suppliers and opportunities for consolidation. Focus on gaining

ownership over the design, technical specifications and tooling. This way you will obtain complete flexibility and mastery on being able to identify the best sources of supply for both components and finished goods for delivery to any market location.

Enable real-time information to maximise influence • Marketing and therefore all the goods and services they need are continually changing.

If you only receive the facts after the event, there is limited opportunity to add value to subsequent requirements as they will likely be different. Ensure you obtain all the facts in real-time by defining the process, information and communication protocols up front. If you can see things as they happen, you can immediately make a difference by reducing waste, improving efficiency and optimising the creation of customer value.

8.INTRODUCTION TO LEANPIE

LeanPie is a lean & transparent SUPPLY CHAIN …...... for the sourcing of non-core items such as retail fixtures and point of purchase (POP) equipment

• WHAT: LeanPie provides clients with a fully managed, end-to-end, technology-enabled supply chain that manages the sourcing, manufacture and delivery of retail fixtures and point of purchase (POP) equipment

• HOW: Low-cost country sourcing, combined with Lean processes, engineering expertise and an online platform delivers a very efficient, best-in-class manufacturing supply chain

• WHY: By eliminating waste in time and resources, LeanPie provides clients with improved terms, enhanced quality and faster delivery of requirements

LeanPie value drivers By decoupling design from manufacture, LeanPie focuses all of its expertise and resources on optimising every step in the manufacturing supply chain to deliver the optimal return on investment

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Cloud Technology highlights • Secure platform • Role based access control • Easy to use • Includes communication tools to engage with all

stakeholders • Includes translation facility for communicating with

non-native speakers e.g. foreign manufacturers • Real-time updates • Provides complete transparency and in-depth

information on every aspect of the supply chain • Enables full drill-down data analysis • Provides extensive dashboard reporting

SHARING SUCCESS Why not share your experiences on how you have transformed the sourcing of your retail fixtures and point of purchase (POP) equipment: • Write a case study • Write a blog We would be delighted to promote and share what you have achieved

WHAT’S NEXT? TO LEARN MORE... Visit us online at leanpie.com, email me at david.newberry@leanpie.com, or call me at +44 (0) 7730 455269

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