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The Role of Strategic Sourcing and Partnerships in Supply Chain Management
Today’s supply chain challenges require strategic sourcing to meet marketing goals. Here’s what that entails.
Consider how an organization would have outsourced a project some five years ago. Or, the organization might stick with a supplier they know and have used. Perhaps someone makes a referral to a supplier from their network. Or, if the organization does not know where to go, they might hit the web and find a new supplier via a Google search.
If this sounds like a very fast and loose way to find suppliers and procure what’s needed…it is. Today, such informal processes simply cannot handle our nation's incredible supply chain issues. To maintain their competitive edge, successful organizations are taking strategic sourcing seriously. And they are increasingly turning to external partners to help them do it—especially when it comes to marketing and brand stewardship.
What Is Strategic Sourcing?
Generally speaking, strategic sourcing connects the procurement process to an organization’s overall goals in an intelligent way. This can include significant time on market research, spend analysis, comparison of competitors, negotiations, and vetting.
While strategic sourcing is most often discussed regarding parts for manufacturing, it is highly relevant to marketing, too—especially regarding “brand stewardship.” Consider that a marketing department for an enterprise-sized company will regularly need to produce many different types of things:
- Printed marketing materials (brochures, sell sheets, business cards, letterhead, etc.)
- Printed forms
- Direct mail (printing, addressing, and tracking)
- Branded apparel
- Branded merchandise (keychains, water bottles, etc.)
- Banners and posters
- Point-of-sale displays and packaging
- Event-related materials (invitations, programs, signs, etc.)
For some projects, items might be centrally sourced, such as a marketing department developing and sourcing their materials. For other projects, individual locations or offices might make requests at different times; for example, several locations might order forms or signage at different times, depending on local needs.
This means that strategic sourcing will need to play a considerable role even when ordering finished deliverables. Many organizations get stuck in creating and maintaining their marketing supply chain.
The Marketing Supply Chain
The marketing supply chain is the chain of suppliers that a company relies on to produce, store, and deliver their marketing materials, including everything listed above. That chain of suppliers may include local, national, and even international suppliers, covering a wide range of specialties. Warehousing and delivery play a role in this supply chain, too.
Like other supply chains, the marketing supply chain for many organizations has been facing some real challenges lately. And this can mean problems for marketing departments. Suppliers are dealing with increased costs (materials, maintenance on machines, labor costs) and sometimes pass those on to clients. In some cases, the issue is not raised prices but outright shortage (for example, a supplier running out of a particular paper stock or specialty ink). Transportation scheduling is more complicated, too. The net effect of these challenges is higher costs, slower turnaround times, and quality issues due to cutting corners.
These challenges only emphasize why strategic sourcing for marketing supplies is so difficult today. Consider that, even a decade ago, “strategic sourcing” simply meant getting at least three competitive bids for a project. Today, that’s not enough. What does it matter if Supplier A shaves off a few hundred dollars compared to Supplier B when neither can keep the needed materials in stock? Or can promise on-time delivery?
3 Ways Strategic Sourcing Helps with the Marketing Supply Chain
All that said, when strategic sourcing is done well, it can make all the difference in meeting brand goals and deadlines. Having a partner who has already done much of the legwork can go a long way to getting proper strategic sourcing in place.
Here are three examples from our own experience helping brand stewards navigate the marketing supply chain:
Finding “Diamonds in the Rough”
Some suppliers can do multiple things. Others are specialists: They do one thing and do it well (and inexpensively). For example, that “one thing” could be web printing. Or letterpress. Or vinyl banners. Or etching metal plates on trophies.
These niche service providers tend to work through networks in the industry; they rarely advertise, preferring to find organically those few customers who are just the right fit. In other words, the average marketing department will not stumble upon them.
However, for someone who has established networks and knows these service providers’ capabilities to a tee, they represent a great opportunity. Such “diamonds in the rough” are often faster and less expensive, even if another supplier is to add value elsewhere (i.e., finishing).
There Are Multiple Paths Toward Those Marketing Goals
Not every link in a marketing supply chain will be so specialized, however. (In fact, most are not.) This point gives organizations a lot of flexibility and adaptability when it comes to realizing marketing goals.
For example, suppose an important form needs to go on a very specific kind of specialty paper. Supplier A, who usually handles these orders, is out of that stock and predicts it will be months before more will come in. How might this be handled? That would depend on how the following questions were answered:
- Is there another supplier with that paper in stock? If so, is their price comparable? If the price is higher, can that higher price be justified by meeting the turnaround time needed? Are they willing to negotiate a deal?
- Is there another similar paper on which this form can be printed? How similar must the alternative be? Would these alternatives be ready earlier?
- Are timelines flexible here? Would an interim solution be OK for a month while Supplier A gets its paper stock resupplied?
Strategic sourcing is, in part, knowing to ask these questions and always coming to the table with multiple options ready.
The Road Is Much Shorter
At the end of the day, most large companies can invest in doing strategic sourcing internally. They can create a database of suppliers and capabilities, work to build and maintain supplier relations, and do their own market research, cost analysis, vetting, and so on.
That can take time. And the work is never done: There will always be a project with something new that requires more research. Or a new service provider that needs to be vetted and tried. Or a rush timeline that requires a faster solution than normal.
The point of a strategic sourcing partner is to shorten the timespan between project inception and deliverable as far as possible. A good partner already will have done the legwork and come to the table with various options. In a time when supply chains are so challenging, that can make all the difference.
If you’d like to learn more about getting help navigating the marketing supply chain, reach out for more information.