Post on 07-Apr-2018
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 1/23© Copyright Supply Chain Briefings 2011
Leveraging
the Brand vaLue
of SuppLy Chain
in the age of
M-CoMMerCe
B K CllSl C Bs
Design and Layout by John Devaney
Ascenders Design
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 2/23
2
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
Introduction ........................................................3
Chapter 1 ............................................................6
Chapter 2 ............................................................9
Chapter 3 ............................................................13
Chapter 4 ............................................................18
Table
of
Contents
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 3/23
3
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
Apple is the world’s most valuable brand according
to the 2011 Most Valuable Global Brands study
published by media research company Millward
Brown Optimor. The iconic consumer electronics
company increased the value o its brand by 84% this
year to $153.3 billion. That’s a lot o iPods.
What capabilities have enabled Apple to turn
its logo into a gold-plated asset? A sixth sense
or products that inspire consumers and a air
or creating superb technology must be on the
list. Another strong candidate is supply chain
management.
In order to deliver its products to a worldwide
customer base, Apple has to orchestrate a complex
international web o suppliers oten in situations
where demand outstrips supply. The phrase may not
eature in its marketing campaigns, but supply chain
management it as the core o Apple’s business model
(no pun intended).
The unction makes a signifcant contribution to
the $153.3 billion worth o brand equity that the
ntroduction
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 4/23
4
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
company has amassed. The C-Suite is well aware
o this; COO Tim Cook is in charge o supply
chain.
A number o enlightened enterprises have
reached similar conclusions. Amazon and
Walmart are two well known enterprises where
cutting edge supply chain practices have helped
to turn brands into household names.
Supply chain’s brand-building role is about get
even more important. The act that Amazon
passed Walmart in this year’s Most Valuable
Global Brands rankings oers a hint o these
changes. “Illustrating how dramatically shopping
has changed, Amazon, the online company
with no stores, surpassed Walmart as the most
valuable retail brand,” says Millward Brown
Optimor.
One o the changes Mobile commerce
(m-commerce) is transorming the way
consumers shop. The retail industry’s center
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 5/23
5
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
o gravity is shiting towards the use o mobile
devices to make purchases. In this world
companies have to ulfll orders without a hitch
and change strategic course switly to keep pace
with kaleidoscopic demand patterns. Laggards
risk serious damage to their market reputations;
a potentially atal blow in the ast-evolvinguniverse o digital commerce.
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 6/23
6
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
We Really Do Matter
It seems that most corporate unctions believe
that they have become more important over
recent years. A common argument is that the
unction has become a highly valued strategic
resource that straddles other disciplines. The
claims are understandable; it is human to want tobe a signifcant cog in the machine.
Supply chain is no exception, but in this case,
the rationale really does have merit. First, there
is increasing awareness that the unction’s long
established mission to deliver the right product,
to the right place, in the right quantity, at the
right time, and at the right price, is at the heart
o corporate strategy. Second, supply chain
is a natural bridging unction, since it covers
the sourcing o materials and components,
turning these inputs into products, delivering
the products to end customers, and end o lie
disposal.
Chapter
One
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 7/23
7
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
Moreover, the proession has changed
dramatically over the last decade or so, in linewith changes in the business environment. And
or the most part these changes have added
strategic responsibilities to supply chain’s more
traditional tactical roles. Here are some reasons
why.
glblz. As companies have expanded
globally so the supply chains that support this
growth have extended their reach in both
geographic and operational terms.
Mk ll. Flip-opping materials and
energy prices and fckle consumer tastes are
making it more difcult or companies to plan
ahead. They must be extremely agile to ride this
roller-coaster successully, and much o that
agility resides in the supply chain.
Js m mc. Synching supply
lines with customer demand is a great way to
cut costs, but it can also be a nerve-wracking
business model. One slip up and the company
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 8/23
8
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
can be awash with product or scraping the barrel
or supplies. Guess which unction plays a key role
in keeping the demand/supply gears meshed?
Ssbl. Customer demand has taken on
a green hue and companies must respond with
viable, genuine measures to make their business
models more environmentally sustainable. In many
enterprises supply chain accounts or a large
chunk o the carbon ootprint.
The relative importance o supply chain diers
rom company to company depending on the
type o business and corporate culture. But its
overall ranking in the league o unctions has
undoubtedly risen over recent years. The arrival
o m-commerce gives the discipline another shove
up the corporate ladder.
No Small Beer
upply chain might
t below the surace
many companies
ut it is no lightweight
hen it comes to its
mpact on economic
erormance. According
o the 2011 State
Logistics study
ublished by the
ouncil o Supply
hain Management
roessionals business
gistics costs in the
.S. were $1.2 trillion
2010, an increase o
114 billion over the
revious year. The 2010
otal represents 8.3%
the country’s Gross
omestic Product.
ogistics is part o the
roader supply chain
anagement feld.
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 9/23
9
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
Hidden Value
I supply chain is so inuential, how come it has a
relatively low profle?
In the corporate arena supply chain management
has its roots in warehousing and transportation,
disciplines that do not exactly have their names in
lights. It is only airly recently that the signifcance
o a well-run supply chain has started to turn
executive heads.
In the world at large there is little reason
why supply chain should be a amiliar concept.
Consumers want to make purchases when they
are good and ready; the rantic behind-the-scenes
activity that goes on to make sure that items are
on the shel is largely irrelevant to them.
Interestingly, a corner o this veil has been lited.
The UPS advertisement campaign led by the jingle
“We Love Logistics” brings this relatively obscure
term to mass audiences. Also, in the atermath o
Japan’s tsunami disaster in March 2011 the term
Chapter
Two
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 10/23
10
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
“supply chain” was coined by media outlets as
they attempted to explain how the disruptions to
businesses caused product shortages across the
globe.
Still, supply chain is relatively anonymous compared
to higher profle departments such as sales. But
it can make or break brands, and help to build
the resilience needed to survive the direst o
emergencies.
Supplier issues buried deep in multi-tiered supply
chains can surace in the orm o product quality
or saety problems that harm market reputations.
These dangers are more apparent when companies
outsource manuacturing to contractors and sub-
contractors located overseas that are difcult to
track.
Twenty-Twenty supply chain visibility has become
crucially important to companies that rely on
networks o suppliers that are scattered across the
globe.
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 11/23
11
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
More mundane disruptions such as late or ailed
product deliveries can be extremely corrosive overtime. Buyers soon become disenchanted with a
brand when the product is consistently unavailable.
Flawed demand planning can undermine a brand’s
standing. When there is excess product retailers
use discounting to sell surplus items. Relegating a
premium brand to the bargain basket does not do
much or its credibility.
Studies have shown that supply chain glitches
depress shareholder value. Consulting frm
PricewaterhouseCoopers LLC sponsored a study o
600 US public companies that suered disruptions
between 1998 and 2007. The analysis ound that
share prices dropped by an average o 9% below a
benchmark group during the two-day announcement
period (the day beore and the day that thedisruption was announced). Moreover, two-thirds
o aected companies still lagged their peers on
stock price perormance a year ater the incident,
according to PwC.
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 12/23
12
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
On the positive side is that brands built on a solid
oundation o operational excellence are able toweather the storm o adversity better than imsily
constructed market identities.
Toyota oers a shining example o this staying power.
The brand is synonymous with lean manuacturing
and cutting edge supply chain practices yet suered
the indignity o mass recalls in 2010. The amous
supply chain sputtered as quality issues put Toyota on
the deensive. Yet in the 2011 Most Valuable Global
Brands study the car company rebounded and took
top ranking in the car industry.
When you see the
epths to which
oyota had sunk, the
oncern that was being
xhibited in the US
bout saety problems.
nd when you compare
hat with the way the
rand perormed in
erms o sales at the
nd o the year, Toyota
a textbook example
brand resilience. In
he sense that, i you
vest in the brand over number o years,
ctually it does ensure
hat you’re able to
ithstand most things
hat happen to you in
he marketplace.”
hris Hunton, CEO Team
and Rover/WPP Account
eader, Young & Rubicam,
uoted in Millward Brown
ptimor’s 2011 Most
aluable Global Brands study.
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 13/23
13
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
Riding the Electronic Storm
The anchor o a strong brand will help companies
to maintain competitiveness as they navigate the
explosive growth o m-commerce.
This digital revolution is transorming the retail
industry as consumers migrate to devices such
as smart phones to shop. A study released by
research frm Forrester Research in 2011 ound
that 48% o retailers have a mobile-optimized
website; 35% and 15% respectively have deployed
iPhone, Android and iPad applications.
As electronic shoppers grow in number companies
are trying to fgure out what mix o services
they should oer or maximum proftability. For
example, according to Forrester 21% o all mobile
trafc is coming rom tablets, “amazing considering
the iPad was launched barely a year ago,” says the
research frm. “Challenges or retailers includedierentiating the consumer experience on a
tablet versus a smart phone and fguring out
eatures and unctionality in dueling app/mobile
Web ecosystems,” Forrester observes.
Chapter
Three
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 14/23
14
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
Predicting the uture shape o the m-commerce
market is extremely difcult in this “new rontier”phase o its evolution. But one thing is clear: these
dynamic retailing channels will have a proound
eect on product branding.
Word o mouth has been shaping
consumer perceptions or as
long as commerce has existed,
but mobile connectivity, amplifed
by social media, provides a
megaphone or these inter-
personal communications. “A
dissatisfed customer can air
complaints to her social circle
in an instance – and when used
or the positive, word o mouth is a powerul
generator o goodwill and brand advocacy,” says
brand builder Interbrand in its Best Retail Brands
2011 study.
As well as ast-track communications, m-commerce
provides rapid availability o inormation on
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 15/23
15
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
products and buying opportunities. In this quick
fre buying environment, consumers have scantpatience or patchy service or deective items. And
they are looking or customized products that are
an extension o the personal “brand” they espouse
on social media sites.
In other words, these individuals have no time or
supply chains that ail to ulfll orders seamlessly
and deliver personalized product quickly.
“Retail supply chains are challenged by this shit to
improve supply chain execution to take, manage,
and ulfll omnichannel orders, without increasing
the cost o doing business. This is a tall order, when
customers have come to expect ree shipping and
an array o shopping, pick-up and delivery options,”
says retail market research frm IDC Retail Insights
in its 2011 Global Retail Supply Chain Predictions.
Moreover, service levels that are acceptable today
may not apply tomorrow. “It is time to rethink
and redesign retail supply networks, with an
understanding that the dial is moving… agility,
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 16/23
16
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
exibility and responsiveness are crucial,” IDC
continues.
Quick-response market reactions and the ability
to reconfgure distribution networks on the y
are an integral part o supply chain management.
By extension, error-prone supply chains are more
likely to cause brand-busting ailures in unorgiving
digital markets.
Supply chain also has a key role to play in helping
companies to project the right market identity
to mobile consumers. Individuality is a prized
attribute in the digital space, a quality supported
by supply chains designed to deliver tailored
products. Sustainability is another identifer
aorded a high priority in m-commerce circles,
and supply chain plays a central role in improving
environmental perormance. The unction is also
critical in providing the visibility into product
ows that companies need to avoid mistakes
in quality control and saety that can seriously
damage reputational health. This is becoming more
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 17/23
17
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
important in markets such as ood products where
tighter saety regulations are being introduced.
Some companies have used supply chain to
support specifc brand attributes. An example
is the campaign launched
by CSX that burnishes the
rail carrier’s environmental
credentials by touting its low
uel consumption. Another is
a campaign run by ood and
agricultural company Cargill that ocused on its
eorts to build supply chains in emerging markets.
As more consumers switch to virtual shopping
channels companies will need to pay more
attention to the role o supply chain in supporting
and maintaining their market identities.
When the parts or the
ne come precisely on
me that’s logistics,
continuous link that
always in synch that’s
gistics,
arbon ootprinteduced bottom line
ets a boost that’s
gistics,
With new ways to
ompete there’ll be
heers on Wall Street
hat’s logistics …
yrics rom the jingle that
atures in the UPS We Love
ogistics advertising
ampaign.
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 18/23
18
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
New Models
What exactly is this new supply chain role? To
some extent it is a high-octane version o the
traditional one, in that the unction has to deliver
the right product at the time at warp speed to
meet the demands o digital buyers and maintain
brand value.
But m-commerce also takes supply chain into
new territory as a critical component o market
identity. The items purchased by electronic
shoppers are not simply inanimate objects that
have to be transported rom A to B; they are a
reection o each buyer’s preerences and spending
habits.
M-commerce is plugged into a vast store o
electronic inormation on the consumers that use
their mobile devices to connect with retailers.
Marketers are already knee-deep in this tide o
inormation, and are beginning to understand how
it can be sited or vital market intelligence.
Chapter
Four
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 19/23
19
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
It is possible to segment people into groups with
similar buying habits and demographic proflesby analyzing social media chatter,
or example. By tracking the
movements o these “tribes”
within a specifc area such as an
inner city, researchers can orecast
where they will shop and what
products they are likely to buy at
any given time. Tracking purchases
transacted via smartphones – a acility that a
growing number o retailers are oering – can help
companies to map buying behavior in near real-
time.
The ull ramifcations or managing supply chains
have yet to unold, but they will be transormative.
By analyzing inormation rom in-store mobile
devices and electronic sales transactions,
companies can build more accurate and timely
product demand orecasts, or instance. This
inormation, coupled with a deeper understanding
o buying populations, will enable companies to
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 20/23
20
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
align product design more closely with consumer
preerences and manage supply with greaterprecision.
Enterprises that master these emerging capabilities
will establish market-leading brands. But to
reach these heights they need to develop resh
approaches to the way products are marketed and
delivered to end customers.
A new type o relationship between marketing
and supply chain is sorely needed. The partnership
could be described as a collaboration, but this
overused term understates the degree o change
required. The digital retailing business is less
tolerant o traditional tur wars such as who has
ownership o sales data or the number o product
variants an operation can support. Companies
that stumble over inadequate service levels or ailto move quickly enough to capture new demand,
can do serious damage to their brands in markets
where there is little room or error.
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 21/23
21
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
Also, m-commerce solutions must span
national boundaries. A study by German marketresearch frm yStats.com analyzed m-commerce
developments in 42 nations. The Global Mobile
and M-Commerce Trends 2011 study shows that
90 million individuals in Great Britain, Germany,
France, Spain and Italy are expected to use mobile
internet by 2015. In Germany more than 20%
o all smart phone owners use their device on a
regular basis to search or product inormation.
M-commerce growth is trending upwards in Asia.
Supply chain has to be an active participant in this
expanding universe. The unction needs to become
intimately amiliar with the digital landscape, and
not be araid to develop non-traditional methods
and alliances. Better ways to manage inventory and
building more exibility into distribution networks
are just two o the items on the unction’s to-do
list.
A wider view o risk management is needed.
Supply chains are exposed to numerous risks rom
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 22/23
22
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
supplier ailures to natural disasters, and fnding
ways to mitigate and/or eliminate these disruptionsis a major supply chain activity. Brand-related
threats should be a part o this risk management
universe. How does a change in sourcing strategy
alter the organization’s risk profle in terms o the
standing o its brand, or example.
Companies would also beneft rom new insights
into the role o supply chain in an m-commerce
environment. Research is needed to shed more
light on the link between supply chain management
and brand equity. Which attributes and business
models are the most sensitive to supply chainactions, and how can companies incorporate brand
value into their supply chain strategies?
There is increasing awareness that the efciency
o an organization’s supply chain is an integral part
o its identity. The social commerce revolution
adds more weight to the importance o supply
chain as brand builder. Companies that realize
this and change accordingly will be better placed
to compete in highly challenging m-commerce
markets.
The true potential
or m-commerce is
o provide consumers
ith a valuable tool or
esearch, comparison
hopping and retailer
teraction. This will, I
elieve, not only meet
he needs o customersut also maximize
rowth across all
hannels,”
an-Chrisrophe Hermann,
ce President, Carreour,
ommenting on the Next
eneration Retail Europe
ummit 2011.
8/3/2019 Leveraging Brand Value eBook
http://slidepdf.com/reader/full/leveraging-brand-value-ebook 23/23
23
Leveraging the Brand Value
of Supply Chain in the Age of M-Commerce
Published by Supply Chain Briefngs,
http://www.supplychainbriefngs.com
Design and layout by Ascenders Design,
http://www.ascenders.net