Marketing Procurement Challenges 2021 - An R3 Report

Marketing Procurement THE FOUR BIGGEST CHALLENGES FOR 2021 An R3 Report

How fast can we create value?

Marketers and procurement teams are beginning to speak the same language regarding value creation. What was once a pain point between two departments is now a core conversation.

Great change has occurred in 2020. It has shifted perceptions and accelerated the desire of both marketing and procurement teams to re-think how process, data, and technology can enhance their internal operations to deliver great ideas, product, and services.

With significant mandates to drive efficiency and effectiveness across categories, we expect greater reliance on procurement capability to deliver data-driven analysis and recommendations that feed into strategic marketing decisions.

Every bit counts. From dynamic resourcing to contract compliance, automation and technology, and addressing stakeholder interests, marketing procurement teams can expect their role in value creation to increase in the year ahead.

Marketing Procurement THE FOUR BIGGEST CHALLENGES FOR 2021

Views from the top “I think where procurement is becoming absolutely essential is our ability to understand what is a good and a bad cost, eliminating costs that bring zero value to the consumer so you can improve something that does.”

Benjamin Guilbert Vice President of Procurement for Europe, Commonwealth of Independent States and Turkey at Mars Wrigley Source: Raconteur Business Growth & Recovery

“We want to be able to cope with the service level requirements of the customer of the future. They will have a minimum acceptable level, which is the Amazon one...”

Michele Palumbo Head of Supply Chain Management Italy, Bayer Source: Bayer Italy’s Supply Chain Transformation, Digital Report, 2020

“We will no longer be a retrospective outfit within the company, but a proactive partner across the board that will innovate and collaborate both internal and externally, to deliver the company’s strategic objectives. Industry-wide, supply chain has the chance to do a lot more than just be a paper-pushing function.“ Mark Bromley Director, Sourcing and Supplier Management, Mastercard Source: FinTech, April 2020

3

DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

“In order to better manage demand fluctuations and potential supply disruptions, retailers need to evolve their end-to-end supply chain visibility and ensure they have a global view of their inventory and supply base, which they then must tie into their planning systems and order management systems to create a real-time feedback loop that helps enable fulfillment flexibility.”

Jeanette Medlin Barlow Vice President, Product Management and Strategy, IBM Source: Forbes

“What has happened over the years is that people are chasing growth. And as a consequence, they keep on launching new products. And that gives you a shortterm benefit. But at a certain stage, you need to clean that up. Your supply chain costs go down because of longer runs, less changeover, less inventory, less waste, and it also has a big benefit on your cash. So it’s a good exercise to do.”

Dirk Van de Put CEO, Mondelēz International Source: Supply Chain Dive

“What has happened over the years is that people are chasing growth. And as a consequence, they keep on launching new products. And that gives you a shortterm benefit. But at a certain stage, you need to clean that up. Your supply chain costs go down because of longer runs, less changeover, less inventory, less waste, and it also has a big benefit on your cash. So it’s a good exercise to do.”

Dave Ingram Chief Procurement Officer, Unilever Source: Supply Chain Dive

4

DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

Deliver value by improving visibility of your suppliers Suppliers in marketing can range from advertising agencies to customer relationship marketing platforms, and even data warehouses. Advertising holding companies have numerous agencies under their umbrellas, and the growth of independent agencies, consultancies, and specialists agencies have only made the marketing ecosystem more complex.

To be able to add value to marketing strategy and negotiate costs with vendors, marketing procurement teams need to have an understanding of the trends, challenges and innovations occurring in the areas related to supply. They need to have visibility beyond Tier 1 suppliers so that they can be confident that their overall supply chain meets regulatory and corporate social responsibility requirements.

Avoiding risks resulting from a lack of a supply chain visibility

8

Mitigate Disruption

Plan for Interruptions

Understand how access to talent and resource might impact your partner’s ability to deliver locally, regionally, and globally.

Ensure that work is able to progress in spite of disruption with good communication, clear workflow, and technology.

Clean-up bad data

Avoid hiring wrong suppliers

Create unity and generate more insights into your supply chain by knowing where your data is sources and stored.

Obtain transparency on how your marketing partners align with your business on issues of ethics and business practice.

DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

Case Studies Remuneration Model Develop a remuneration model that rewards agencies on outcomes CLIENT CHALLENGE A global CPG company was experiencing inconsistent fee management across brands working with multiple agencies.

This was a time of high tension and high time commitment in negotiating fees.

KEY FOCUS Consistent agency performance management that was motivating for agencies.

A remuneration model that moved away from pricing inputs and toward rewarded agencies for outcomes achieved.

IMPACT 13% ($79m) in savings and a clear framework to be consistently applied across brands in determining fees and assessing business outcomes.

R3 PROCESS Customized C-suite digital immersion workshops for local and global teams.

18

Competitor analysis of top ten competitors in digital performance benchmarking.

Competitor analysis of top ten competitors regionally.

On-boarding experience review.