Marketing and procurement may seem like disparate functions within a company, but their roles are intertwined and crucial to the overall value chain. Marketing, defined as the process of engaging customers and building strong relationships, relies heavily on the procurement and supply chain functions. These departments ensure the availability of products to sell and the necessary resources for production, distribution, and financial management.
In an ideal scenario, marketing shares demand forecasts with procurement and supply chain management, which then use this information to develop master production and distribution schedules. However, the reality often deviates from this ideal due to inaccurate marketing forecasts and a lack of necessary tools and visibility for precise planning.
The Power of Collaboration between Procurement and Marketing
The relationship between procurement and marketing can be significantly improved with a commitment to better collaboration. This synergy can lead to cost-saving opportunities and potential for higher revenue.
Procurement can provide valuable insights to marketing about rising costs for raw materials and components, allowing for product redesigns or redirection of promotional plans. Similarly, supply chain disruptions or transportation challenges can be communicated to marketing to prevent customer dissatisfaction due to product unavailability.
Marketing, on the other hand, should share demand forecasts with procurement to ensure production and marketing strategies are successful. Involving procurement early in the product development process can also lead to more accurate profitability estimates and better decision-making regarding materials, components, and transportation.
In conclusion, while procurement and supply chain management may not be the first considerations in marketing, their roles are essential for operational efficiency, effectiveness, and profitability. By fostering better communication and collaboration between these departments, companies can enhance their supply chain management and overall business performance.
