Why Supply Chain capability should form part of the marketing plan

Incorporating supply chain capability into an effective marketing plan is as important as product and channel strategy. Supply chain is an important element of competitive advantage where the business seeks to develop multiple distribution channels in order to diversify the customer base and reduce customer concentration risk. A diversified channel approach is an important enabler to deliver profitable revenue.

Many mid tier firms revenue base has evolved from private label or co - packing contracts. Whilst this product strategy provides consistent revenue, there is inherent business risk and typically ongoing margin pressure.

Developing supply chain capability as a core skill of the organisation enables a business to build revenue through alternative markets and channels rather than relying solely on ranging through Big Box or Major supermarket channels which typically require deliveries into their own central warehouses.  The following methodology is recommended :

  • Undertake a rigorous assessment of the most attractive;

    • Products,

    • Market segments,

    • Channels which the business can succeed in.

  • Factors to be considered could include;

    • Profitability,

    • Competition,

    • Barriers to entry,

    • Fit with current business model.

  • Conduct an assessment of the key attributes which deliver competitive advantage within the identified products, market segments and channels, involving an objective self assessment of the capability of the business to deliver on these success factors.

  • Competitive advantage success factors could include;

    • Superior order fulfilment levels,

    • Efficient order capture systems,

    • Responsive delivery lead times,

    • Best practice service levels.

By embracing this approach, businesses will develop a clearly articulated plan towards profitable revenue growth.

nem has assisted many mid tier firms achieve competitive advantage through effective supply chain strategies, with experienced partners from a diverse range of supply chain, logistics and procurement backgrounds.

To find out more, visit nem Manufacturing, Supply & Systems via the link below. 


 

Author: Gary Tempany, Lead Partner of nem Manufacturing, Supply & Systems.
This article is based on research and opinion available in the public domain.