Enhancing Supply Competitiveness through Innovation and Branding Alvin J. Williams, Ph.D., Chair and Professor of Marketing University of Southern Mississippi 601/266-4634;
[email protected] 89th Annual International Supply Management Conference, April 2004 Abstract. Sustaining the competitive edge in an ever-demanding environment is a critical supply success factor. To ensure the likelihood of sustained competitiveness, supply must embrace both innovation and branding as paths to triumph. Understanding how to maintain competitive supply posture is one of the most essential demands of an enlightened supply professional. The session details the mechanics of how to apply this mindset to supply environments at various levels of development. Why Innovation and Branding? The supply management profession is besieged with immense and rapid change. The enormity of the supply task in modern organizations requires a conceptually sound, responsive, and agile approach to problem solution. It demands approaches to supply problems that have not been considered in the past. In ongoing attempts to offensively manage scenarios impacting long -term supply performance, it is critical to pursue new mindsets and approaches. Innovation and branding offer alternative perspectives from which to view enhancing supply competitiveness. Competing through innovation is a long -held business value at the macro or enterprise level. However, it is less well applied at the micro level of the supply function. If supply managers adopt the values of innovation, branding, and entrepreneurship, more proactive strategies, policies, and procedures will be conceived and executed. The next section covers the concept of innovation, the various types of innovation, and their usefulness to supply thought and practice. Innovation and Supply Competitiveness. Innovativeness is a key competency for long - term supply survival. Supply units must embrace innovation at all levels to ensure success. Vitale and Giglierano (2002) describe the two ends of the innovation continuum – incremental innovations and radical innovations. Incremental innovations take existing products, processes, and other resource inputs and make gradual or minor adjustments to effect desired changes over time. These incremental variations could apply to such areas as supply strategy, negotiation, supplier performance evaluation, inventory management, logistical concerns, process mapping, and global concerns. If the key supply decision variables are reconfigured slightly, it is possible for great changes to take place. The decision- makers must be willing to engage in new and improved supply practices to enjoy the fruits of alternative methods. At the very opposite end of the continuum are radical variations in configuring the key supply strategy variables. Radical innovations are discontinuous in nature and require a key departure from the normal traditions accepted in supply practice. Obviously, there are numerous alternatives for change that exist between the two extremes. The fundamental question becomes how aggressively should supply managers embrace innovativeness to achieve goals? The answer is the degree of change required to have maximum impact on supply results. The extent to which the ‘supply architecture’ is altered to
impact results is a composite of the supply culture, the risk-taking environment, the will to change, and myriad other factors, both tangible and intangible. An area that holds some promise for altering the thinking of supply managers is the concept of branding . While branding is mostly a marketing concept, the basic premise of the idea can assist supply professionals in positioning what and how they conduct their work. Extending concepts from one discipline or function to another is one means of innovation. The depth and breadth of that extension determines the degree of innovation – incremental or radical. The remainder of the paper focuses specifically on the extension and application of the branding mindset to the supply function. Branding and Supply Success. Marketers use brands for a variety of purposes. High among those reasons is to convey some measure of differentiation and distinctiveness to a product or service. Supply professionals should ‘brand’ the value they create and deliver, both internally and throughout the supply network. Brand names are immensely valuable assets that are to be managed and leveraged. Supply can enhance its leveraging capabilities through adroit branding of its work, ideas, processes, and perspectives. The ‘deliverables’ from supply can and should be branded as a means of enhancing both position and influence in the network. Brand must be built both internally and externally. Traditionally, branding concepts have been applied external to the organization – to a variety of direct and indirect stakeholders. Efforts centered on external communication and support of the brand, creating, the image, and defining and delivering the promise (Tosti and Stotz, 2001). However, given the importance of the branding experience, internal branding demands focused attention. Whether internal or external the key outcome is ‘delivering what customers value.’ Tosti and Stotz (2001) distinguish some critical factors regarding internal branding initiatives: • Brand clarification internally; • Alignment of leadership, management systems, and work processes with specific business values and practices that deliver value to customers; • Measurement of key customer value indicators and the development of appropriate responses. More specifically, the internal branding process should begin with proper research, assessment, and analysis internally. The key goals of this assessment effort should be to: • Clarify the brand proposition or promise of value to customers; • Establish the brand character that will be the best value delivery vehicle; • Translate brand character into both values and behavioral practices; and • Analyze current practices to ascertain compatibility with the brand promise. What does this mean for supply management? As supply managers grapple with new ideas and approaches for increasingly sophisticated problems, branding offers some insight into how supply can reposition itself to really make a difference in the manner in which the function is perceived, both internally and externally. How can supply ‘market’ its distinctiveness with respect to its capacity to understand and to skillfully solve problems? One starting point is to focus on the six fundamental questions guiding value in supply:
1. 2. 3. 4. 5. 6.
How is value created in the organization? How is value delivered in the organization? How is value sustained in the organization? How is value measured in the organization? How is value embedded in the fabric of strategic supply decision-making? Does supply management have an appropriate role in delineating value and strategic choice?
The manner in which supply answers the above questions defines the ‘unique brand character’ that establishes its distinctiveness. This unique distinction is characteristic of well-known consumer brands, including Dell, Toyota, Coca-Cola, Sony, Delta, John Deere, Pfizer, Merrill Lynch, Harley Davidson, and countless others. How do these companies (brands) deliver unique value to its slate of customers? How do they configure the value equation to deliver a useful and wanted brand? Answers to these unleash the partial mystery to sustained supply success in turbulent corporate and competitive environments. While internal branding is an important part of the ongoing value evolution process, external branding has its share of utility as well. This is the most common form of branding and is thus most closely associated with the word. It involves communicating and marketing to stakeholders ‘outside’ the traditional boundaries of the organization. Consistently delivering the ‘brand promise’ to those external to the firm is the key challenge with this aspect of branding. Supply practitioners must engage innovatively in managing both the internal and external branding processes to be successful. The same research, assessment, and analysis employed in developing an astute internal brand must be used externally. Appropriately blending and matching internal and external brands can deliver a sustained level of value creation in supply management. The challenge is determining the appropriateness of this blend over time. Summary. Forward-thinking supply professionals are in constant pursuit of new ideas, concepts, and approaches that might enhance performance. Astute analysis of the concepts of innovation and branding from marketing allow for extending and stretching these approaches to uncharted supply territory. The willingness of supply professionals to engage in progressive actions to reposition their corporate capacity to be effective is an essential precursor to long-term supply success. Branding the supply value creation and delivery mechanism can contribute enormous benefit to the future of supply practice and research REFERENCES Aufreiter, Nora A., David Elzinga, and Jonathan W. Gordon, “Better Branding,” McKinsey Quarterly, Issue 4, 2003. Guild, Todd. “Branding’s New Math,” McKinsey Quarterly, Issue 4, 2003. Kohli, Chiranjev and Mrugank Thakor, “Branding Consumer Goods: Insights from Theory and Practice,” Journal of Consumer Marketing, Vol. 14, Issue 2/3, 1997. Tosti, Donald, and Rodger D. Stotz, “Building Your Brand from the Inside Out,” Marketing Management, Vo. 10, Issue 2, July/August 2001. Vitale, Robert P. and Joseph J. Giglierano, Business to Business Marketing: Analysis and Practice in a Dynamic Environment, South-Western Publishing, Mason, OH, 2002.
