SOURCE: CMO Council

CMO Council

November 16, 2009 08:15 ET

Marketers Lag in Optimizing Global Supply Chains; Big Opportunities Exist to Reduce Cost, Improve Yield and Increase Accountability

Benchmark CMO Council Study Finds Marketers Face Myriad Challenges in Mastering the Management of Supplier, Service and Logistics Partners in a $1.5 Trillion Area of Spend

PALO ALTO, CA--(Marketwire - November 16, 2009) - Nearly two-thirds of senior marketers have never undertaken a comprehensive audit of the costs and processes that contribute to their marketing supply chain and most admit their resources and suppliers are poorly integrated across global networks, reports the Chief Marketing Office (CMO) Council.

The milestone "Define Where to Streamline" study (www.marketingsupplychain.org/report) provides a comprehensive assessment of how well marketers are managing, controlling and introducing sustainability practices across increasingly complex global supply chains. These include hundreds or thousands of printers, exhibit and merchandise suppliers, warehouse and fulfillment operations, communications agencies, media channels, independent contractors, as well as creative and digital service providers.

The online audit of more than 300 senior marketers conducted by the CMO Council found marketers are inadequately positioned to introduce new efficiencies and waste reduction programs into their marketing ecosystems. The study is the first initiative in a sweeping program under the umbrella of a new think tank, the Marketing Supply Chain Institute, which is dedicated to examining the economics of spend in the marketing services sector. The study was conducted with the support of NVISION®, the Marketing Supply Chain Group of North America Corporation.

While only 25.2 percent of respondents have undertaken a comprehensive audit and analysis of costs and process efficiencies in their supply chain, the study found that roughly the same number -- 25.9 percent -- track obsolescence on marketing and event management consumables. However, just over 50 percent of the marketers audited acknowledge that ROI could be the greatest reward from an optimized supply chain as a streamlined process will likely speed time-to-market and time-to-value from marketing spend. These numbers reflect a lack of visibility into marketing supply chain operations and poor tracking and accountability of marketing materials and merchandise inventory, which often involve millions of printed items, including product packaging, corporate brochures, sales literature, premiums and point-of-sale display units.

"Auditing the effectiveness of producing, storing and shipping marketing consumables is the first step towards a more integrated, efficient and streamlined marketing supply chain," said Mike Perez, Vice President of NVISION. "Marketers are clearly recognizing that they can gain significant efficiencies and cost-savings, which will allow them to re-direct spend and resources to more gainful programs. But to do this, they need the right information systems, process controls, knowledge, expertise and physical infrastructure to implement process improvements and better handle procurement, warehousing and just-in-time delivery of marketing materials worldwide. Often this is a competency that can be more cost-effectively outsourced," he added.

Interestingly, the CMO Council study suggests that a trend toward greater sustainability and carbon footprint reductions may lead many marketers onto the right path for gaining a deeper understanding of their supplier network and value chain. More than two-thirds of respondents -- 63.6 percent -- said they are targeting print production, warehousing and delivery of marketing consumables and 37.1 percent said they were targeting transportation and logistics with an eye toward realizing sustainability gain and carbon footprint improvements. Delving into these areas will enable marketers to exact cost-savings and efficiency improvements from many of the greatest areas of spend within their marketing supply chains.

"The marketing supply chain is clearly not a strategic area of focus for many marketers, yet there are significant improvements that can be driven by change-minded executives willing to dig deeply into the operational side of the marketing function," noted Donovan Neale-May, the CMO Council's executive director. "You're going to see a much tighter linkage between the CMO, CFO and CPO (chief procurement officer) going forward and more involvement by the CIO to integrate back-end information from ERP systems to better synchronize marketing supply operations and partners."

Other key findings from the report include:

--  With 89 percent of companies indicating they are not generating real
    economies or efficiencies in their marketing supply chain process,
    marketers are further challenged as one third of respondents indicate they
    have no internal resource of expertise in supply chain management.  In
    fact, 47.8 percent of marketers surveyed indicate that marketing supply
    chain management is an evolving functional area that needs more attention
    or a discipline growing in importance of value.
    
--  30.4 percent of respondents said they weren't fully realizing the
    value and potential of the Internet and instead are managing partners
    through traditional means while 30.1 percent clearly have adopted an online
    approach, saying they were seeing major improvements in workflow,
    collaboration, content access and digital asset management.
    
--  Marketers acknowledge that a streamlined supply chain can improve go-
    to-market strategy and speed time-to-value from marketing spend, and play a
    critical role in managing the potential variance in customer experience.
    The delivery of accurate and relevant content, the uniformity of
    communication and consistency of message, and the timely provisioning of up-
    to-date sales and marketing messages and materials are the top three
    critical values an optimized marketing supply chain to go-to-market
    strategy.
    
--  Creative, once an area often left in the hands of agencies or
    advertising, may come under greater scrutiny as a significant number of
    marketers -- 40.5 percent -- identified creative design and development as
    an area in the marketing supply chain with the greatest potential for
    process, productivity and performance improvements.
    

About the CMO Council

The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide-range of global industries. The CMO Council's 5,000 members control more than $125 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include over 12,000 global executives across 90 countries in multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia Pacific, Middle East and Africa. The Council's strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), Brand Management Institute, and the Forum to Advance the Mobile Experience (FAME). www.cmocouncil.org

About NVISION®

NVISION is a leading Marketing Supply Chain Specialist, an exclusive offering of North American Corporation. NVISION works with companies to simplify and organize tangled web of agencies, vendors and distributors -- creating a customized Marketing Supply Chain Solution. Over the past five years, NVISION has saved over $42,000,000, an average of 20% in Marketing Supply Chain costs, for leading fortune 500 corporations. www.nvision-nac.com.

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