Transparency in The Supply Chain
Credit: © Stockbakery | Dreamstime.com
In 2010, Harvard Business Review published this article on “The Transparent Supply Chain,” which discussed the evolution of consumer interest in product origins. It provided several significant and instructive takeaways for companies seeking to start down the sustainability path. One in particular – transforming marketing – revealed the importance of integrating both marketing and supply chain strategies. In the article, the author states that “tools to track provenance will become an important part of the marketing mix.” This new imperative is a huge opportunity for marketers to create new or improve existing brand value in the customer’s eyes. More importantly, it solidifies the significance and the broader scope that the entire value chain has when considering “Place" in the marketing mix.
In “Sustainability Marketing is Simply Just Marketing,” I discuss how most online literature on the topic of marketing sustainability primarily focuses on promotion. Yet, even the two articles I reference, each acknowledges the value of place in these efforts. In one commentary on the Sustainable Brands website, the author provides insight into the benefits to companies selling their sustainable products direct to customers online. At the same time, this article by Precision Marketing Group opines that manufacturers need to incorporate sustainability throughout the supply chain. The reality is that both pieces are correct. Where many companies fail is in recognizing the pivotal role marketing has in both scenarios.
Marketing’s Role with the Supply Chain
“Marketing supports supply chain agility and flexibility.”
Traditionally, marketing focused on selecting the best sales channels, which is evident to most businesses. What is more subtle is the significance of the supply chain in the marketing mix. As I have mentioned in an article on the importance of the marketing mix with branding, place is not just about distribution or reaching consumers. It also refers to the supply chain. Since companies make sourcing decisions during product development, product design must integrate sustainability requirements into specifications provided to suppliers. The result is a value chain that encompasses sustainability, beginning with raw materials, through incremental processing and manufacturing, as well as the delivery of finished goods to the customer.
The collaboration between marketing and supply chain managers is growing in importance. As Gerri Knilans states in Trade Press Services, “Marketing supports supply chain agility and flexibility.” It is marketing’s resources and knowledge – especially related to consumer demand - that allow for informed supply chain decisions. One of marketing’s primary functions is communication, as Knilans demonstrates, it plays a significant role in a well-functioning supply chain (See Image).
Brands with sustainable Value Chains
Both Patagonia and Prana provide excellent examples of the integration of marketing with sustainability and supply chain management. Patagonia is perhaps the leading company that incorporates place into their marketing mix. Their Footprint Stories provide narratives behind their sourcing decisions like this one discussing manufacturing of surf gear. Likewise, Prana also is heavily committed to its supply chain. With their Clothing for Positive Change movement, they work diligently to ensure that their suppliers share their values with an emphasis on respecting the planet and people through responsible practices. Both Patagonia and Prana exemplify the importance of place within their marketing mix. Furthermore, they commit their organizations to ensure that sustainability is at the foundation of their overall value chain.
“We have a responsibility to know where our products are coming from, what they are made of and the conditions of the places where they are made to ensure compliant, responsible conditions across the supply chain and safe products.”
Don’t forget the Value Chain
Marketing must be involved with supply chain management, and it is even more essential in creating sustainable products. The process begins with product development. Marketing ensures that product sustainability requirements included in product design and integrated into sourcing decisions. Marketing also can play a vital role in communicating throughout the value chain – keeping both the raw material producer and the customer aware of the company’s commitment to sustainability. Brands venturing on their sustainability journey need to consider that its sourcing decisions are a critical aspect of its value proposition. These strategic choices belong in the marketing mix. Ultimately, customers will want to know this information, and through transparency and marketing, they will better understand a brand’s value.