Sep 5, 2013 | Customers, Demand chains, Marketing
Creating a demand chain out of an environment forged by a competitive and opaque supply chain mentality is no small task.
This change is particularly challenging in agriculture where there is considerable regulatory and interest group oversight and thousands of years of trading DNA pre-digital.
However, why should the agricultural supply chain be immune to the collaborative revolution spawned by the availability of digital data sweeping every other industry. Clearly, agriculture should not, so those who can conceive the future will have the opportunity to own it.
The characteristics of successful collaborative ventures appear to be similar irrespective of the market they operate in. Accommodation to car hire to books, where there is a market that can benefit from information, a logistic chain that is suboptimal, and a supplier base that opens up to change, the characteristics of a successful demand chain are similar.
- They are Transparent. End to end, the availability, costs, and value add is clear to all who can benefit from the knowledge.
- They are collaborative. Each component of the chain recognizes that their individual best interests are best served by serving the best interests of the chain.
- They are consumer centric. Delivering to consumers is at the core of the drivers of the chain. Sometimes this requires re-engineering of an existing chain, in effect innovating the delivery of an existing product or service, but increasingly emerging are value propositions made possible by new technology, driving development of demand chains that would not have been possible just a few years ago, like airbnb, Lyft, and Zappos.
Each of these characteristics adds to the capacity of the chain to reflect demand back through the chain, igniting the activity required to fill the demand.
Sep 3, 2013 | Governance, Innovation, Marketing, Operations, Strategy
I have just been a part of a post investment review with a client, looking at what a significant investment in capital equipment has delivered, compared to the planned outcomes, that underpinned the Capex.
Not a pretty sight, and now they have to learn the lessons to avoid repeating the mistakes.
Over the course of the exercise, the marketing manager consistently blathered about the accountability of the engineering staff in the process, but when cornered on marketing accountability to the product and market specifications against which the investment was made, and the effectiveness of the launch, and post launch activity, he had nothing.
Marketers have cried forever that the money spent on marketing is an investment, not an expense, but often this has a hint of self preservation about it.
However, if we are fair dinkum (Aussie for honest with ourselves) we should also be prepared to undergo a rigorous process to measure the effectiveness of our marketing investment.
Marketing however, has substantial elements of the “qualitative” about it. Creativity, being different, a better approach, all of which are best measured in hindsight.
Having measured, and with the benefit of hindsight seen a better way, surely the gap could be termed a “Marketing Debt”, the amount pissed away because the idea, execution, CVP, or something else was not up to scratch.
If we figure out how to keep a running score, weighted by hindsight and the continuous improvement enabled by the analytics and A/B testing now possible, we might even convince the beanies that marketing really is an investment.
Sep 2, 2013 | Communication, Management, Small business, Social Media
Digital technology has offered all of us an astounding range of opportunities to challenge and interact with our social environment, creating as we go. Gary Hamel has summarised them into a “5 C” list,:
Contribution
Connection
Creation
Choice
Challenge.
You read them, you just know the truth of it, but the next step, the really hard one, is how to harness the potential energy unleashed by these revolutions.
As a consultant to small businesses, I find no lack of energy, determination, and intelligent, informed risk taking, but I do find that the digital revolution has marched past the capabilities of many of the established businesses, and as time passes, the gap just becomes wider.
Recognising the presence of the capability gap, and finding a way to bridge it is rapidly becoming the most significant challenge faced by SME’s. Until that bridging has happened, digital is a millstone rather than a freedom, and freedom feels great!.
Go for it.
Aug 30, 2013 | Change, Marketing, Social Media
As a boy, I used to go to the local grocer with a few bob in a knotted handkerchief, get a standard bag of goodies, bread, butter, and a few chops in return. The grocer knew what my Mum had sent me to get, and she knew about how much it would cost, and any discrepencies were fixed up later.
Those days are gone, the days when there was a personal relationship, when people were the centre of business, and trust was not something we thought about, it just was there.
In today’s terminology, business was social.
What replaced it was an industrial model where scale and machines dominated. It does not matter much weather you are thinking about cars, supermarkets, or farming, the analogy holds, just the timing changes a bit.
Impersonal, disconnected, and trust has disappeared, which is perhaps the greatest loss.
Now however, the people seem to be making a comeback.
The advent of social media was at first just another “mechanical” thing, it offered scale and access with little humanity, but as it has evolved, and the platforms developed, so have our behavior patterns and expectations.
Social media is becoming a “humanity enabler” that offers the benefits of scale and automation, but that is enabling the reconnection of people. Trust is also making a comeback, just think about the value you put into the reviews on Amazon or Ebay, whilst you do not know anybody who has done the reviews personally, they are way better than a paid advertisement.
I do not see the pendulam swinging back again, as we are becoming so re-engaged with people, but I guess it will, and those that see the inflexion points first will be, as usual, those that have the opportunity to make the most of them.
Aug 27, 2013 | Communication, Lean, Marketing, Social Media
Lean thinking is well established in manufacturing and office operations, but social media?
Hardly?
Lean thinking is all about the removal of anything that does not add value to the customer. So, if we extend this a bit to potential customers as well, given that Social media is now being extensively used in marketing programs, and ask ourselves weather that post, tweet, or message of some sort is adding value, or just clogging up the recipients feed.
For most of us, time is our most valuable resource. Therefore, it should be incumbent on us as responsible marketers, setting out to gain the interest, and trust of customers, not to waste their time with trivia, irrelevance, and what amounts to directed SPAM.
Most people reading this blog are still working out their menu of Social media usage. Each platform has differing characteristics of usage and ecosystem of users, and like most software, most users leverage a small percentage of the capability. Once you spend a bit of time and recognise which platform suits the way you want to interact, be ruthless about removing the “waste” by saying goodbye to those that are not worth the investment of your time.
However, the advent of automated marketing is adding another dimension. Once a marketer has your email address and christian name, it can be hard to recognise a robot from a real person, and often the “Unsubscribe” button is hard to find.
Not a good way to engage a potential customer.
We should be asking ourselves a few questions before we send out anything:
- How does this communication add to the sum of knowledge “recipient” has?
- What value is that knowledge to “recipient” , or are we just filling a quota?
- Where is the humanity of the message communicated?
Tough questions, which will both increase the response rate, because to answer them takes time, research, and sensitivity, and annoy less recipients, simply because the message will add value by addressing their needs.
Aug 26, 2013 | Branding, Change, Demand chains, Marketing
Lean thinking, evolving from the Toyota Production System is changing manufacturing world, but agriculture has a long way to go.
Just as building cars used to be a production oriented operation until Toyota turned it on its head, so too is agriculture production led. Grow it, then try and find a market.
Well the world has changed, and demand is as big a pull factor in the world of agricultural produce as it is in cars, so the challenge is to leverage it. Just grow it and they will not necessarily come.
This does not mean that you have to find a way to manipulate the genes of an apple tree to give peak production in 2 or 3 years instead of seven, remove the impact of the seasons, or grow product out of its natural environment, which we can do for some products in greenhouses, but it does mean that change is urgent.
There are some things we can do much better that will help:
- Collect inventory data, and make it transparent and available. Agricultural inventory is not just what is ready for sale, but what is in the ground and likely available in the future days, weeks, months and years. Understanding the dynamics of agricultural inventory is even more important than manufacturing inventory because the cycle times are often so long, and the shelf life is limited, in some cases to days.
- Remove price as the purchase determinant. Sellers of produce have lost sight of the value that fresh produce delivers, and have lost any semblance of control of the chain, and the opportunity to brand. As a result, price is the overriding determinant of a sale, it is a race to the bottom, a race that does not have a happy ending for anyone. Having lost the initiative, it will not be easy to get it back, and any progress will take years, but it is a crucial challenge.
- Energise marketing. Easy to say, but extraordinarily hard to do. The agricultural “marketing” bodies that exist via levies have demonstrably failed in the marketing part of their charter. All that is left is for producers to take back some responsibility for marketing, and start to build their own branding and business models. Logically this can happen at the fringes, in the corners, rather than in the mainstream. The emergence of Farmers Markets is to my mind an precursor of this activity.
- Create new business models to accommodate the points above. Existing structures have led to the current poor situation, so it is unreasonable to expect them to be able to change into something radically different. These new business models have great challenges, great opportunities, and the cost of failure will significantly impact on our food security, and cultural roots.
Without the evolution of an agricultural version of a lean value/demand chain, the volume and value of our agricultural output will decline over the long term. Increasingly we are becoming uncompetitive in global markets, we currently import more than half our packaged food and groceries, our capability base built up over generations is leaving, and once gone, will not return.
We appear to be at some sort of inflexion point, getting it wrong over the next decade will leave our grandchildren poorer than we have been, reversing 250 years of improvement.
