Three keys to driving marketing and supply chain collaboration
Big picture outlook: Integrating marketing and supply chain teams can boost customer experience – and bottom line
The stunning growth of e-commerce options over the past several years,1 together with the increasing number of traditionally brick-and-mortar stores offering omnichannel purchasing experiences, have been game changers when it comes to raising customer expectations. When you factor in mobile platforms that enable up-to-the minute, transparent delivery information, today’s consumers have become more demanding than ever.
This cuts across all markets and industries. As a result, it’s critical that your company develop marketing and fulfillment strategies that support multiple purchasing channels in order to meet this growing customer need. And if you won’t or can’t meet these rising expectations, it’s easier than ever for today’s consumers to look elsewhere for comparable products.
With this in mind, it’s critical that your company take a hard look at how its Marketing and Supply Chain departments are organized, interact, and operate. “To meet customer expectations, there has to be a seamless, institutionalized integration between an organization’s Marketing and Supply Chain channels,” stated Ken Spigarelli, Managing Director, KPMG Supply Chain Advisory. “These departments must work in harmony and connect the dots between what consumers want and how to go about meeting their needs in the fastest, most efficient way possible.”
Marketing and Supply Chain collaboration enhances customer experience
Consumers’ preferences and spending habits are continually in flux. Factors such as rising or falling inflation, as well as home, food and gas prices, impact consumer spending and saving habits. So does the price, availability, convenience and overall “consumer experience” of purchasing competitors’ products that are similar to yours.
To deliver the best customer experience and drive customer satisfaction, your company’s Marketing and Supply Chain teams must work closely together.
Similarly, Marketing and Supply Chain should be collaborating with regard to promotional activities and marketing spend. For example, Supply Chain should be providing real-time feedback to Marketing on operational risks and/or delays that may impact production or delivery of goods. This information, in turn, guides Marketing in terms of how and where to spend promotional dollars; you don’t want to waste it on products that won’t be available for customers to purchase because of supply chain issues.
The ESG Factor: Here’s a relatively new customer demand factor that Marketing and Supply Chain will want to keep an eye on. While today’s consumers want convenience and value, they’re also becoming more concerned with ESG issues – that is, environmental, social and governance – and seeking out brands that prioritize sustainability.
Where products are sourced from is going to play a greater role in purchasing decisions.2 So Marketing will want to make sure that customers can readily identify, order, and get the products they need from countries, companies and/or sources of which they approve, and Supply Chain will want to act accordingly (whenever possible).
"It’s Marketing’s job to gather and analyze customer data, draw accurate insights about the current situation and likely future trends (e.g., potential market disruptions) and then quickly and efficiently communicate this information to the supply chain team. Supply Chain, in turn, needs to be prepared and agile enough to rapidly react and adapt to meet rising and falling consumer demand.”
Bret Sanford-Chung
Managing Director, KPMG Marketing Consulting.
Three keys to a better customer experience
For many organizations, creating a center of excellence and adopting digital strategies with integrated platforms is essential. Here are some guidelines for improving the ability of your company’s supply chain and marketing teams to work together seamlessly and with maximum effectiveness:
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1. Break down the silos: Marketing needs visibility into the company’s supply chain, and Supply Chain needs to have accurate and timely data regarding forecasted trends (including current and future consumer demand), promotional campaigns, and so on. Breaking down silos between these two groups is vital to:
- Ensure that Marketing can quickly and accurately communicate product availability and cost to customers
- Enable Supply Chain to understand what and when customers are buying in a timely manner so it can take steps with respect to operations and inventory planning, allowing the organization to meet customer needs at the lowest total delivery cost.
Marketing and Supply Chain integration starts with a realistic assessment of where your organization’s capabilities are on a maturity curve — from reactive to collaborative. Then you can create a plan for building new capabilities or enhancing existing ones. When Marketing and Supply Chain work closely together, companies can best determine their stock keeping unit (SKU) priorities, quickly deliver the products that customers need in the most economical way, and maximize the impact of their marketing spend.
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2. Transform your technology: You need to have the right digital, software and hardware tools in place to integrate Marketing and Supply Chain successfully and seamlessly. The right technology enables Marketing to have a thorough understanding of customer needs and desires, the ability to forecast spend, greater visibility into the end-to-end operations of the supply chain, and the ability to predict the impact of nearly every scenario.
This, in turn, facilitates Supply Chain in determining real time customer demand, necessary and available inventory levels, and strategies for improving procurement cycle time and boosting the quality and speed of decision making.
Innovative technology can also offer greater transparency to all stakeholders who drive strategy and helps them understand what’s happening in the market and what it means for operations. They can then develop and manage a more integrated planning process that drives closer collaboration among the various business units.
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3. Determine what consumers want: Closer integration of your Marketing and Supply Chain teams, together with the use of innovative technology, will enable your company to better understand and connect with its customer base — and expand it.
By gathering and analyzing consumer data, you can better understand how they like to buy products (direct to consumer, subscription, online, in-person, etc.). You can also more easily determine if there are any roadblocks to customers purchasing your products. For example, a KPMG client realized that its customers were having trouble ordering online because its website was in English; research revealed that English was a second language to many of the customers. The solution: create a parallel website to accommodate them. This information, in turn, was communicated to the supply chain team so they could adjust inventory levels to meet the anticipated increased customer demand.
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“As supply chains become more complex — with more customers, more suppliers, more distribution channels, and more channels to market – it’s becoming even more important that companies operate as a connected enterprise if they hope to meet customer demand and remain competitive,” stated Spigarelli.
Delivering the best customer experience is possible only when marketing, supply chain and other business units are connected and work together seamlessly. “When companies pursue major strategies around growth, cost reduction, or digital transformation, all key stakeholders in the company need to build towards that,” added Jennifer Linardos, Ignition Market Lead, KPMG Growth & Strategy. “Supply chain and marketing must work together, be innovative in their approach, focused on delivering a smarter, data driven customer experience, and stay agile in order to deliver for the customer.”
Depending on your internal capabilities and level of organizational maturity, integrating Marketing and Supply Chain can be complex venture, and you shouldn’t underestimate the cost, time and resources this effort will take. In many instances, companies have brought in third parties to help with this type of undertaking because so many elements are involved. The cost of third-party services is often outweighed by the savings of time and energy and efficiencies gained by using firms that have been through these integration projects many times before.
How can KPMG help?
Of course, we can (and do) provide digital transformation and supply chain services as separate offerings. However, more and more of our clients are now enjoying the widescale business benefits of a truly integrated approach.
To find out how you can align your Marketing and Supply Chain efforts to enhance customer experience, reach out to us today.
Footnotes
1Source: Digitalcommerce360, “US ecommerce in 2022 tops $1 trillion for the first time”, Paul Conley (February 17, 2023)
2Source: Sustainers Consultants, “Brand Trust and Sustainability – an essential component for commercial viability, Leocjkane (February 14, 2021)
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