THE BRANDED SUPPLY CHAIN
by Yong Siew Mee, Vice President of Marketing, Quintiq
What do H&M and Whirlpool know about supply chains that many of their competitors don’t? It is that world-class supply chains embody world-class brands by delivering to the customers the promises made and stories told by their marketing departments. And that only happens when marketing and supply chain teams collaborate, which is probably not often enough.
The Branded Supply Chain is the model for ensuring that your brand is more than just a collection of ideas, logos and guidelines. Branding your supply chain means using your supply chain as a vehicle for your brand story to inspire loyalty and secure profits in the long term.
The Branded Supply Chain covers three main areas: loyalty, sustainability and leadership. Let’s take a closer look.
Loyalty: Making it easy for the consumer to choose your products again and again
What are your brand values? Are you family oriented? Honest? Innovative? Cutting edge? Supply chains that inspire brand loyalty in consumers do more than give the customer what they want, when they want it. They do so in a way that is consistent with your brand.
Nike gets new products on the shelves faster than its competitors – what more would you expect from a brand associated with lightning fast reflexes and response times? And Whirlpool’s supply chain embodies its brand value of innovation with Six Sigma accuracy and cutting-edge manufacturing processes.
On the other hand, you have to wait two years for your new Aston Martin DBS. That is the price of luxury. If you could get it tomorrow, you might not want it quite as much.
Meanwhile, brands like H&M are making a virtue of supply chain transparency, and building loyalty as a result. For the consumer, “affordable fashion” has been synonymous with exploitative labor practices. H&M is positioning itself as the ethical choice for the price-conscious consumer. H&M is one of the first in its field to market its products in this way. Are H&M’s competitors ready for mandatory disclosure? As an innovator and early adopter, H&M is set up to benefit.
Does your supply chain carry your values through from the supplier of your raw materials to the homes and businesses of your customers? Compare the way you describe yourself to the way your customer describes you. If there is a mismatch, look to your supply chain to find out why.
Corporate supply chain accountability is here to stay
The California Transparency in Supply Chains Act went into effect in 2012, applying to all retailers and manufacturers with annual global revenues of more than $100m doing business in California. A primary objective of the act is to eliminate slavery and human trafficking as a source of cheap labour. Key considerations include human rights policies and risk assessments, collaboration and endto- end transparency. Similar laws were recently passed in the EU and the UK.
These acts only require disclosure – not action. Instead, the pressure to act is likely to come from consumers, human rights organisation and some investors. Disclosure statements are publicly available via websites like www. knowthechain.org. Might this become part of your customer’s decision making process?
Sustainability: Chicken soup for the supply chain
The Campbell Soup Company’s aggressive waste reduction initiatives are doing as much for the brand as they are for Campbell’s bottom line. Campbell saved $4.5m just by reducing packaging sizes and the company recycles up to 85 per cent of its waste. Meanwhile, the story you cannot help but share is that Campbell’s production plants are powered by (waste) soup! That is a win for those responsible for reducing supply chain costs, and a win for the marketing team.
As this story illustrates, sustainability – as an aspect of the Branded Supply Chain – has two dimensions.
First, there is the issue of sustainability as it relates to the expectations of the modern consumer, who values brands that build sustainable supply chains sustainably in terms of fuel consumption, the environment, natural resources, and so on.
Second, by preparing for supply chain challenges or market shifts in the future, a brand’s position (and power to generate revenue) is sustained in the long term. Smart brands are future proofing their supply chains by leveraging on more accurate forecasting tools, scenario planning, supply chain redesign, optimising to reduce costs, and so on.
These two aspects of sustainability converge in waste management. Waste is a cost that is only going to increase in the future – in dollars and reputation. Tariffs, the cost of offsetting, and even fines are increasing, if not in your market then certainly in the markets of your suppliers, partners and customers, which will have a knock-on effect on your business. Soon, someone, whether it is the government or your customers, is going to start asking questions about what you are doing to reduce your waste, and how you dispose of it. How will you respond? And will your answer and the action you are taking reflect the values of your brand?
Does your waste represent an opportunity for you tell a story – and cut costs – like the Campbell Soup Company?
Leadership: The winner takes all (the data)
According to Intel’s supply-chain strategy programme manager Nikhil Chhabra, Just Say Yes is “dragging Intel into the supply chain leadership role.” By elevating supply chain management and planning practices to the strategic level, Intel is achieving the highest level of enterprise-to-enterprise branding.
Leading supply chain collaboration among partners and suppliers puts a brand in the position to be first to customer, first to market. But more than that, imagine the possibilities of the data available to you when you work closely with your partners. The insights that can be gleaned from big calculations made on all the big data available to a business that works closely with its partners can be groundbreaking. It presents new opportunities to make sense of and respond to customer insights, learn from past mistakes, and anticipate future trends.
As a supply chain leader, you are in a unique position to set the pace of your operations, cut costs, and ultimately gain an edge over your competitors. All of this translates into benefits for your customers in the form of better service, cost and availability.
Start building your Branded Supply Chain
Your supply chain is an extension of your brand. How it performs will directly affect your service levels and your bottom line. With all the powerful planning and optimisation technologies available to you today, there is no better time to start building your branded supply chain.