ALRENE COETZEE, Social Media Manager at Digital Content Lab shares a light-hearted review on how some brands broke through the noise of COVID-19 advertising by showing us the funny side of the pandemic.
When the COVID-19 pandemic hit South Africa at the beginning of 2020, a full national lockdown began at midnight on Thursday 26 March. Many brands had to make rather big adjustments to their marketing strategies in order to reach their customers at home using digital marketing tactics.
So here we are, almost a year later, and still stuck with endless adverts from brands who seem to have gotten the same memo to bombard us with their sombre piano music and empty roads, reminding us THAT WE CANNOT BE TOGETHER, but at the same time WE ARE NEVER APART.
But just when we thought it was time to zone out of these depressing ads, something unexpected happened…
Saved by humour Here are four brands who thankfully took a different approach and changed the game completely by appealing to our sense of humour through clever and engaging content.
Chicken Licken SA (84,713 Youtube views)
Chicken Licken SA really did their slogan “Soul Food for a Soul Nation” justice with their COVID-19 campaign video portraying South Africa’s unique sense of humour amidst the pandemic. The video includes snippets of how South Africans try to outsmart the COVID-19 rules along with the famous zol-song and the president’s struggle with his mask. They made sure to keep things on the light side.
King Price Insurance had some fun with their hashtag “#UnapologeticallySouthAfrican”. Their COVID-19 campaign video opens with a woman approaching a roadblock where a police officer continues to check her temperature and asks for her permit. A funny series of misunderstandings take place pointing out the struggles we face in a light-hearted way. The traffic officer takes her temperature and tells her she is ‘very hot’ to which she responds that she is married.
Nando’s SA took the jolly “We wish you a Merry Christmas” carol and turned it into a funny, witty song introducing their “Say ‘tsek to 2020 Fed-up Festive Feast”. They sure made us realise that even though we have our downs, our truly South African sense of humour cannot be taken away from us.
Castle Lite’s intro to their #HitRefresh on 2020 played on that one phrase South Africans know all too well… “My fellow South Africans”. In their video there is a small town called Hotazel where the temperature gets, well… hot as hell. They used the COVID-19 nation address and turned it into a fun commercial, making us feel refreshed for a 2021.
Even though the COVID-19 pandemic is no laughing matter, at least these brands managed to lift the spirits of the nation while promoting their brand.
Jokes aside If you or the marketing team in your company is not geared up to drive your digital marketing strategy this year, then consider the IMM Graduate School’s Applied Digital Marketing Certificate course. In 10 months, you could be upskilled with some of the latest strategic thinking and best practice from the industry.
This course promises to be the most up to date course available as it is continuously reviewed and updated by our tutors that work in the digital marketing industry. Here’s what one of our students had to say about this course:
“Thank you so much for the ADMC course, it was really an eye opener to what I thought I already knew. This course was really what I needed to enhance my marketing qualification and added to my understanding of digital marketing.” Tokologo Mokoena (Marketing Manager – SABC – Ikwekwezi FM)
Being a digital marketer in 2021 means you need to have a wide range of skills; from technical know-how to content creation. In this practical, hands-on course we introduce you to the tools required to be a successful and efficient digital marketer. If you would like to apply for this course or would like more information, follow the link to our website https://shortcourses.imm.ac.za/online-course/applied-digital-marketing-certificate/.
The only thing that is guaranteed right now is change and 2020 has undoubtedly offered proof of that! COVID-19 also sometimes referred to as “RONA” has had a massive impact on students and student life. But, it’s not all doom and gloom, there is a way to stay safe and enjoy uninterrupted studies for this year regardless of the lockdown level or which variant of the COVID-19 virus is doing its rounds.
It is still possible to plan for a future despite the challenges being presented The matric exams which ended on 15 December 2020 are currently being marked and results are expected to be released on 22 February 2021. While matrics seem to have been left in a sort of limbo, Blade Nzimande, Minister of Education, has urged students not to fret. Traditional Tertiary Education Institutions have all set their academic year to begin between early-March and mid-April. This gives matrics ample time to settle into their choice of studies.
But, there is no need to wait to apply Charmaine du Plessis, Chief Marketing Officer at the IMM Graduate School has advised matrics to apply with their prelim results. “Most matrics have an idea, even before they write finals whether or not they are expecting a Bachelor’s or Diploma pass. The IMM Graduate School has a structured process where students applying for a degree programme but don’t qualify (with their final results), can move to either a Diploma, Higher Certificate or other course within the IMM Graduate Schools bouquet of offerings.”
Everybody that applies to the IMM Graduate School will be assisted to find a suitable programme to study
Du Plessis urges students that already have a qualification and want to register for a Postgraduate programme to do so as soon as possible to avoid the inevitable rush that is expected when matrics eventually receive their results. “We are anticipating a peak registration period, so to avoid longer call back times and (digital) queues, rather get your application in now”.
We ALWAYS have space for you The IMM Graduate School has geared up to take on more students this year. The COVID-19 lockdown was a catalyst in the adoption of online learning in South Africa and the IMM Graduate Schools academic department along with support functions have adapted their processes to take on an increased number of students for the year.
This is just as well since UNISA has recently announced that it will be decreasing student intake numbers by 20,000 students this year. Part of the reason for admitting fewer students is the inability of the National Student Financial Aid Scheme to meet the demand.
Another is that some buildings on the UNISA campus have been closed indefinitely due to COVID-19 and in an effort to keep everyone safe they have announced that there will only be one registration period for the 2021 academic year. This means that all modules for 2021 – for both semesters – must be registered before 12 March 2021.
If you have applied at UNISA and find that your registration has been unsuccessful due to any of the above or any other reasons, then turn to the IMM Graduate School – we can be your academic home for the next few years. We are able to offer you an uninterrupted fully online education backed by an established and committed academic team. And if COVID-19 lets up and allows for it, you can at any time sign up for classroom education at one of our many student support centres countrywide.
“Furthermore, to assist student financially during these tough economic times, we have partnered with Study Loans 4U. Study Loans 4U has relationships with the major banks and is able to not only secure the most favourable terms but also to increase the chance of a loan application being approved. Study Loans 4U does all the administrative work to make sure that the application process is quick, easy and stress free. In addition, the IMM has in place an instalment payment options which allows students to bay for their studies throughout the semester”, adds du Plessis.
Our registrations for 2021 are still open, but don’t leave it too late. You shouldn’t have to delay your goals by missing even one semester/term of studies. Take as much control as you can over what is controllable. Your health and your education. See you soon!
IBM’s Watson’s Lucy can be used to determine market segments, develop products, conduct competitive or market analyses, handle media planning, provide the numeric marketing data needs in writing a marketing plan, and assist with salient information in developing a marketing strategy. DR MYLES WAKEHAM, CARL WAKEHAM and MARIA HAMMAN give some idea of the power of AI in marketing.
Artificial intelligence (AI) refers to the creation of human-like intelligence that can process, learn, reason, plan, and discern natural language.
AI comes in three forms, namely, narrow AI, with which we are involved with on a daily basis and which is designed to perform specific tasks within an area (technology with intelligence in a particular domain) and general AI which is not area-specific and can learn and perform tasks anywhere and finally strong AI, which is an artificial super intelligence. Thus far, we have only managed to master narrow AI.
AI uses, among other technologies, natural language processing, speech recognition, robotics, machine learning (ML) and computer vision. An example of AI that you may already be engaging with is SIRI, presently available on Apple iPhones, who reacts to your voice on command. SIRI has the ability to ‘learn’ from you as you request information in the future.
According to Carolyn Frantz (Microsoft’s Corporate Secretary), AI will have a major influence on business and will equally have a dramatic impact on jobs. Frantz asserts that in the future, AI will make as much as 75 million jobs disappear in the USA but will be replaced by 133 million more challenging and less repetitive roles.
Besides its impact on HR, AI will also influence operations and production, inbound and outbound logistics, supply chain management (SCM), finance and as importantly, marketing.
One of the ways that AI is influencing marketing is with AI marketing assistants such as IBM Watson’s Lucy, a cognitive problem solver (in contrast with emotional), which acquires knowledge through a determined learning process.
Lucy can be used to determine market segments, develop products, conduct competitive or market analyses, media planning, providing the numeric marketing data needs in writing a marketing plan, assist with salient information in developing a marketing strategy, creating structured marketing content through a process called Natural Language Generation and so on.
According to IBM, Lucy is a powerful tool marketers “…can use for conducting online research, segmentation and planning and it is so powerful that it can do more in a minute than an entire team of marketers can achieve in months”.
Needless to say, the advantage of a marketing assistant like Lucy is that it can digest and analyse literally all the data a company possesses and once it has absorbed all of this data, marketing personnel, according to Watson, can ask the following questions, when attempting to solve marketing problems:
What are the personality characteristics and attributes of the organisation’s target audience based on a set of predetermined variables?
Which segments, towns or regions should be targeted first in order to maximise sales?
What content mix should be created for the target audience to maximise the attainment of the marketing and promotional mix objectives?
What is the current competitor activity and how can the organisation use such data to make better marketing decisions specifically within environments like retail channels?
The above are questions that companies need to answer in order to formulate marketing strategies that achieve the marketing goals as set by the enterprise. Lucy and similar AI marketing assistants can, therefore:
Create viable segments of a company’s target audience so that it can develop highly personalised content that is designed to appeal to such an audience (target market)
Assist in the planning of marketing strategies by interrogating the needs and wants of the target market and how best to maximise sales and profits because of such market intelligence through programmatic targeting as an example
Implement and control the different strategies so that the firm’s objectives may be realised based on data feedback loops put into place
Create promotion content that is customer-specific so that the organisation’s strategy and promotional mix can be directed specifically at satiating customer and organisational needs and wants.
According to MIT’s Brian Bergstein’s article, which was published in the MIT Technology Review in February 2020, AI as it currently stands:
Cannot question decisions so it is basically led by data which could be incorrect
Cannot explain the decisions it has made to qualify or quantify the decision
Cannot understand causation (why things happen following on from an occurrence)
Cannot measure psychographic typologies
Cannot reason qualitatively, e.g. how people feel about a brand; and as importantly
Cannot understand the concept of, for example, customer loyalty outside of quantitatively ‘crunching’ numbers
So, from the above points, AI must not be seen as a cure-all for an organisation’s marketing woes but rather a tool to assist the firm in achieving better results in the marketplace.
Application of AI in marketing
AI, and systems like Lucy (there are numerous others), will undoubtedly have a huge impact on content marketing as they become more affordable and more popular. They will help companies better understand their audience, and the data garnered by means of AI will allow marketers to position brands more effectively in the minds of current and future customers and put together more effective strategies so that organisational objectives may be attained.
AI will also help them understand what outcomes they can expect by pinpointing accurate customer expectation so that customer-specific targeting can be better planned based upon more reliable forecasting and market intelligence. According to the publication Smart Insights: The Financial Brand (March, 2018), the applications of AI in marketing can be found in Figure 1 below:
Figure 1: Application of AI in marketing
At present Cookies and other engagement tools follow customers as they interact with websites, products, and applications by providing various data sets that will form a personal ‘ecosystem’ that is programmatically targeted by tools and systems. Here relevance is the key to successful engagement by the consumer with variable pricing bases upon the propensity of interest and purchase.
AI can have an explosive impact on marketing throughout the organisation’s relationship with its customers… from demand generation through to the instilling of customer loyalty. It can therefore be used to cement strong and mutually rewarding relationships with customers and help to maximise the lifetime value of the customer.
The IMM Graduate School’s Dr Myles Wakeham is a motivated and well-connected academic and businessman who was instrumental in introducing and adopting CIPS at CPUT as a series of qualifications. He has consulted to a variety of institutions and organisations, such as the South African National Treasury, National, provincial and local government. He is also involved in international research, and with an academic consortium has researched the impact of IT on university education.
Carl Wakeham is a semi-retired ex marketing executive specialising business and brand strategy based on the Wild Coast. He is an ex director and shareholder of a marketing company based in Johannesburg. His special interests are brand development and positioning and has had the opportunity to work throughout Africa with businesses within the Naspers Group and many others He has had the opportunity to gain experience in the Far East and selected countries in Europe where he has lived. He has a BA/MBA and studied other business related fields whilst living in the Philippines and Ireland. He provides a consultancy service to various clients based on project work specifically in the communications /digital fields. He is actively involved in a digital media company where he is a shareholder.
BIO: The IMM Graduate School’s Maria Hamman has over 17 years of combined market research and CX consulting experience. She has worked on both market research projects and customer experience improvement projects with a broad knowledge of research due to working with multiple research methodologies both qualitative and quantitative.
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Creativity’s power in marketing and branding has been proven and documented over and over again for almost a century. When times are good, we’re more likely to take creativity for granted but now that we are in the midst of a global pandemic, we need to be more resourceful, writes BRETT MORRIS.
I’ve written many articles on creativity over the years. That’s probably because I’ve dedicated half my life to championing the cause of creativity as one of the most powerful tools any business has at its disposal. I’ve also been lucky enough to experience the power of creativity first-hand, working with brands and businesses that believe in the exponential advantage it offers.
Though I am more than happy to spend a good portion of my time and energy continually championing this cause, it has always amazed me that there is a need to do so. Creativity’s power in marketing and branding has been proven and documented over and over again for near almost a century.
We continually hold up examples in boardroom discussions (now video calls) of iconic companies or brands that have benefitted from the power of creativity. They say, “We need to approach this like Apple would” or “This needs a real Nike attitude”. And yet when it comes to implementing the theory, it’s much more difficult in practice.
That’s probably a good segue to talk about why there is such a spotlight on creativity in the current context. When times are good, we’re more likely to take creativity for granted but now that we are in the midst of a global pandemic, we need to be more resourceful.
We are faced with more challenges on a daily basis, there are more problems to solve and businesses are more cash-strapped, which means we are inclined to make more effort. That’s because it takes effort to push boundaries, to have a point of view or to be evocative. So given the choice, if we are not forced to make the effort, most people will choose not to.
Being creative takes a lot of hard work
This is not an indictment in any way, it’s just human nature and what people don’t realise, is that being creative takes a lot of hard work. This is not the view that most people have of creativity, they tend to think it’s something that ‘comes naturally’ but that is not the case at all. It is really nothing more than a disciplined process of critical thinking and methodical problem solving. And that’s probably why there has been an increased interest in creativity more recently.
The lockdown has obviously had a devastating impact on the economy and on people’s lives in ways we could never have imagined and that should not be minimised in any way whatsoever. But it has also made us all a lot more conscious of the things we normally take for granted.
I’ve spoken with many leaders who have remarked on how much more empathetic this crisis has made them. How they’ve been more purposeful in their communication and in their actions because they know how much more it counts. Many have also commented on how they hope that these behaviours continue beyond the pandemic as they make us better people. And the same can be said of creativity.
I hope that, as many businesses turn to creativity because they need to do more with less or do things in ways they’ve not done before, they don’t take its power for granted in the future.
I think it’s worth re-emphasising the point that creativity is not just about producing a ‘creative product’. Creativity adds value in whatever spheres it’s applied. To repeat: creativity is a process of critical thinking and problem solving and many of the most creative people I know are not actually in ‘creative fields’. I’ve reflected many times over the past months on how many businesses went to remote or distributed working on such notice in a short space of time.
A world beyond COVID-19
I have to confess that if you had asked me in January how long it would take to move our entire organisation to remote working, I probably would have given a typical corporate answer. Something like, “By the end of the year” for no good reason other than we place arbitrary emphasis on the end of the year as an inflection point. We would have had to run trials, report back, and deal with the inevitable delays as well as our day jobs getting in the way. And ultimately, we would have been lucky to be have made a decision by the end of the year.
And yet in the context of the current crisis, we were able to do this in two or three weeks. That comes down to the fact that we had some very creative people, applying their critical thinking and solving problems in a time frame that we would never have thought possible.
There’s no doubt that we’re going to be feeling the impact of this for a long time to come. And nobody could ever have imagined how COVID-19 would impact us in the way that it did. But what we most certainly can imagine is a world beyond COVID-19. We can imagine that we will get through this challenge and overcome it together. And we can imagine that it will actually make us more empathetic, more connected and more creative than ever before.
BIO: Brett Morris is Group CEO of Nahana Communications. After eight years in the ad business, he was first appointed Executive Creative Director of FCB Johannesburg. Under his leadership the agency won more awards than ever before in its 90-year history. He has been recognised numerous times at major award shows including Cannes, One Show, D&AD and Clios. In 2014 Morris was appointed Group Chief Executive and has since been voted by his peers as most admired agency leader in Johannesburg for five years in a row and three times across South Africa.
‘The lotus thrives in muddy and unpleasant conditions, we are being presented the opportunity to plant and grow lotuses.’
Creativity has taken centre stage even more now during this pandemic. COVID-19 has changed how we view the world and how it works and, change always fuels creativity. We have all had to re-imagine life, apply creative thinking and imagine new possibilities on how to execute creative solutions for our clients and the public under such dire circumstances.
True creativity has been awakened in creatives. The equation we’ve adopted is Isolation = (Imagination + Creativity-Noise). It has been a time for everyone to rethink, reflect, dig deep and that has allowed great content creation and a plethora of ideas. We’ve had to think up new ideas of engaging the consumer, keeping abreast of the shifts happening around us and create opportunities for our brands to stay relevant.
Done correctly, this time could be the preparation we all need so that we’re fully loaded for the new wave and possibly a new type of consumer. We will have to create new narratives for new realities. There is a stillness that is fertile ground for new strategies and creativity.
Co-creation that is made up of authentic brand/consumer collaboration is the future and storytelling still reigns supreme, even though it may look a bit different. We are more connected than ever even though we are apart and this is a huge opportunity for innovation – how to be apart but together.
That shrinks the world even more and at an even faster rate than what our reality offered us just a few short weeks ago.
One day this era will be part of history. The lotus thrives in muddy and unpleasant conditions, we are being presented the opportunity to plant and grow lotuses. ~ Zama Nkosi-Mabuye and Cuma Pantshwa, founders of Ashante Blush.
‘The best things that have come from this pandemic have all been driven by creativity.’
For me, I think it’s about doing what we can to uplift and inspire others around us. There’s so much negativity out there. The scale of this epidemic is unlike anything we’ve experienced in our lifetime, and people are suddenly faced with the realisation that we all lead a very fragile existence. We’re only human, so let’s bring some of that humanity into everything we do. The brands and agencies that do that will be the ones we’ll all want to partner with when we come out the other side.
There have been some amazing pieces produced locally and internationally. The Dove ‘Courage is Beautiful’ commercial by Ogilvy Canada was my favourite. Others that were notable included Nike ‘Play for the World’ and Facebook ‘Never Lost’. They all captured the right sentiment and spirit of hope. But that doesn’t mean every standout ad needs to have an epic feel to it. In fact, the one local commercial that helped us smile in this time was the Chicken Licken ‘Easy Bucks Meals’ commercial which they redid the voice-over to and released on Day 7 of lockdown. ‘Everybody’s talking about it, even during lockdown’ was the simple message. Pure genius.
Everything always impacts on advertising and creativity. That’s the nature of creativity. Adaptability isn’t scary for creatives because we hate monotony. You get the sense that most people concerned about how ‘everything has changed’ and how we will ‘adapt our thinking’ are not the ones who are used to staring at a blank piece of paper every morning.
Creativity will always shine through. But let’s not fall into the trap of thinking that data = creativity. You need data to have better insights to come up with creative solutions. But data in itself is not the answer. If that were the case every brand would be saying exactly the same thing in exactly the same place. The best things that have come from this pandemic have all been driven by creativity.
Humans are physical beings driven by emotion. That’s why we fear pandemics, even though the data tells us we can control it. Why we cry during movies, even though the data tells us it’s just a movie. That’s why even the Data Scientists read their kids bedtime stories – because we’re all human, not robots. ~ Brandon Govender is Executive Creative Director of FCB Durban.
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The recent outbreak of the Covid 19 pandemic has highlighted the importance of Supply Chain Management (SCM), as a sudden increase in demand for certain products and a complete standstill in demand for others has left many suppliers reeling. However the man in the street can still find it difficult to distinguishing the features that contrast a value chain, a supply chain and finally supply chain management (SCM).. Although there is a strong relation amongst these three activities, there are key differences that make them stand apart from one another.
Essentially, a value chain is a set of activities that a firm performs in order to deliver need-satisfying products or services to a defined market or markets. It is also known as a high-level model of how businesses receive inputs and then processes such inputs via the conversion process (operations) into finished goods and services. This is achieved by adding value to the inputs in such a way that the morphed final offerings will hopefully satiate varying customer needs, better than the competitor. The ultimate objectives of the value chain are the appeasement of both customer needs and wants (in the form of superior goods and services), and, as importantly, revenue and profits for the enterprise.
Created by Michael Porter in 1985, the value chain consists of primary and support activities. Primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and service. The key goal of these activities is to create value that exceeds the cost of performing the activity, thereby generating higher organisational sales and profits. Support activities on the other hand comprise procurement, human resources, finance, technology development, and the firm’s infrastructure. These ancillary activities within Porter’s Value Chain, assist the primary activities by forming the foundation of the organization on which the primary activities operate. A support activity such as financial management for example is of great importance for primary activities as without finance, these activities cannot be performed. Likewise, without effective Human Resources Management, the organisation will not have the requisite human capital to produce the required goods and services, market them and finally distribute them to…
The right organisation.
At the right time they are need.
To the right person who will be using the goods; and
At the right price so that their delivery to the targeted end-customer via fellow supply partners will enjoy the value that the offering has been designed to deliver.
The strength that underpins Porter’s Value Chain Analysis is its approach, as it focuses on the customers as the central theme of the business rather than on departments or people. Being a system approach to operating a business, the system links other systems, people, departments and activities to one another and demonstrates how the approach impacts on value creation, costs and profits. Consequently, the analysis makes a clear picture of where the sources of value and loss of revenue can be found in the organisation.
The supply chain is the network of individuals, firms, technology and resources that are involved in the creation and distribution of offerings from the source of the inputs (raw materials, components and so on) via the distribution network to the final consumer. The main challenges of the supply chain, or better still the supply network, are the ever-changing needs of the consumer, its complexity (especially international supply chains), supply risk and as importantly supplier risk. The recent outbreak of the Covid 19 pandemic has underscored the importance of a smooth-running and seamless supply network as without it operating effective and efficiently, more people would have been struck down by the virus. This would have undoubtedly increased the morbidity and mortality rate throughout the world as well as the negative impact the outbreak has had on the global economy.
Supply chain management (SCM) is about creating value. Early efforts at managing supply chains often focused on cost reduction in order to make the chain leaner. Unfortunately, these efforts sometimes reduced the ability to create value thereby negating the key purpose of the supply chain. In essence, there is more to creating value through effective SCM than simply wrestling costs out of supply chain’s primary or support activities. Being an agile supply chain in a modern context, is probably more important than wrangling lower costs as it translates into quicker market entry and better customer service.
There should be value-creating activities that reinforce supply-partner and customer centrism. Because there can be many supply partners in the equation, managing supply chains requires a balancing act among competing and oftentimes self-serving interests. To illustrate this, note the following example. The seller of raw materials (supply chain inputs) would naturally like to enjoy the highest possible price he can muster from the manufacturer in order to maximise profits. The manufacturer on the other hand might probably demand to procure the goods at the lowest possible cost in order to be competitive in the marketplace after he has incurred the time and cost to produce the goods. It is these conflicting requirements that require supply partners to be flexible so that these opposing needs may be realize.
The above is underpinned by the advent of the recent Covid 19 virus and how the interest of supply partners can differ, even in a life-threatening emergency such as the pandemic. In the USA, where the outbreak has reached mammoth proportion, Federal and local governments competed for life-saving Personal Protective Equipment (PPE) hoping to procure such goods at the lowest possible prices. However, because of supply and demand issues, and pure unadulterated opportunism, sellers put up the prices of their PPE goods to exorbitant levels in order to maximise profits at the expense of the people who were ill and dying in hospitals and old age homes. The sad reality is that there was no cohesion and coordination on a macro scale regarding to the procurement and delivery of such essential equipment, apparel and medication. Instead of Federal Government (central government) acting as the catalyst for the acquisition of such goods and services, it competed against states and hospitals, thereby increasing the cost and delaying the delivery of the imported life-saving offerings from Europe and the East.
SCM can be defined as the design, planning, execution, control, and monitoring of supply chain management systems, with the objective of generating value by synchronizing supply with demand and measuring performance on an international basis. Where once it was considered to be a philosophy, in today’s terms it has become an essential business activity that is designed to ensure the delivery of superior value-add services so that all the players in the chain may benefit there from.
The supply chain, not only links organizations e.g. suppliers, producers, and customers. It produces upstream and downstream flows, which move products, information and payment (cash) out of and into organisations.
The value chain however integrates a variety of supply chain activities throughout the product/service life cycle; from the marketing function determining customer needs and wants, operations converting inputs into goods and services and finally to outbound logistics, which consists of order processing, warehousing and distribution. The main intent of a value chain is to increase the value of a product or service as it passes through stages of development and distribution before reaching the end user. So, through effective supply chain mapping and streaming, organisations in the supply network can accurately direct their mutual efforts at providing value-add services to the next-in-line customer. The above hopefully illustrates the relationship of the three critical business activities, their relevance and as importantly how they provide value to all the members of the network, including the end consumer.
Q & A with IMM Graduate School – Leaders in technology-enabled education
Resilience. It’s a very apt word to describe South Africans and the same can be said about the businesses, organisations, and institutions that keep this great country of ours moving.
In the past few months, and even before that, IMM Graduate School has shown not only resilience, but also how much they care about their students and the success they will achieve. They’ve gone more than the extra mile. Years of constant innovation and drive to do better for their students have lead to IMM becoming front-runners in technology-enabled education, and during our age of Covid-19, it has proven to be exactly what their students need.
We had a quick chat with Charmaine du Plessis, Chief Marketing Officer at IMM, to find out how they’re supporting their students during Covid-19 and their recently launched BCom in International Supply Chain Management.
IMM has been around since 1960, and for the slightly older generation, we are the ‘household name’ for marketing qualifications. We currently offer 10 qualifications across higher certificates, diplomas, degrees, and postgrad. Our areas of expertise are marketing, business, and supply chain.
Focusing specifically on our marketing degree, these qualifications are fairly business-based, hence the BBA or BCom designation. The implication of this is that our curricula include modules such as financial management, business management, statistics, and a reasonable amount of quantitative work. Of course, the core theoretical marketing modules are in place, as well as various, very interesting, ‘applied’ marketing modules as you get to 2nd and 3rd year.
IMM is predominantly an online/distance/digital provider of qualifications. We have students from all over. There are almost 1 000 in Zimbabwe, but we also have various students in places such as the UK, Australia, India, and China. Our courses, content, and delivery model are set up to be able to support students remotely, which is ideal right now as you can imagine.
We also provide face-to-face tutorials for students who require additional help or prefer the discipline associated with a formal class schedule. Our largest Student Support Centre is in Stellenbosch, where we have over 500 students.
We like to define ourselves along 3 key dimensions:
Best-in-class qualifications: We have been offering degrees for many years, and we continually update. Many of the core principles remain constant but the case studies and applications are updated regularly.
Compelling delivery: We are probably the most flexible institution in terms of learning style. Simple yet compelling study guides, live and recorded webinars, digital interactive content, and face-to-face tutorials. We try to cater to all the various requirements and study styles.
Empathetic student support: This aspect is often overlooked by online education providers (in my opinion) and it is probably the biggest ‘gap’ between a traditional face-to-face university experience and online. Online is anonymous and it is difficult for lecturers to know when students are struggling. Because of this, we have implemented a series of interventions – not least of which is our help desk – where we are able to answer students’ questions within 15 minutes (during working hours) and slightly longer after hours. If you are to study remotely, this is a very important aspect to consider in any provider.
2. Covid-19 has changed the business landscape immeasurably. What steps will you take in the coming months to support your students?
Since 26 March, the IMM has been working non-stop to ensure that our students’ academic journey remains uninterrupted. Our various teams have not only been keeping the ‘engine going’ from home but are actually developing new products, content, platforms, and systems to make sure that our students look back at this semester as a successful experience and one that continues to push them toward their career objectives.
Our CEO, Dalein van Zyl, has been emailing students regular updates on all the important tweaks and changes to this semester’s schedule, emphasising some of the important items:
Assignments: Our assignment submission processes are ‘tried and tested’ and fully digital, or in other words, can be completed and submitted remotely, but the submission deadlines for most modules have been extended to allow a bit more flexibility for our students.
Examinations (Final Assessment): We decided to mitigate ongoing social distancing policies, so we have redesigned all the exams to allow for remote completion and submission. We’ve also put together memos and videos to help our students prepare and write an Open Book Assessment. The exam/final assessment schedule has also been tweaked and pushed out by 1 week.
Student support: Through our committed staff and our digital platforms, we have continued to provide support to our students almost 24/7.
3. Please share with us one of the courses you’re most excited about.
We recently launched our BCom International Supply Chain Management. It is an extremely relevant and interesting qualification that prepares students for the complex global trade and supply chain management sector. If you consider the most disruptive industries, as well as interesting businesses, it is not easy to ignore Amazon, one of the most valuable companies in the world. This qualification was mapped against industry standards and needs in order to develop skills that are job and industry relevant.
4. What are you looking forward to when it comes to the future of IMM Graduate School?
IMM Graduate School is at the forefront of technology-enabled education in South Africa. We have invested hugely over the last few years in systems and processes, and the result is a best-in-class combination of technology-enabled functionality with a human touch or support. We are able to offer our qualifications anywhere in the world and support students with equal intensity notwithstanding their location. At the same time, our talented and highly skilled faculty ensure that our curricula remain relevant to both graduates and future employers alike.
by Jani Grey . Q & A with IMM Graduate School – Leaders in technology-enabled education, Job Mail. Available here. [Accessed on 25 May 2020]
Euromonitor International: How is Covid-19 affecting the Top 10 Global Consumer Trends in 2020
It is May 2020. Students of the IMM Graduate School are busy writing their Final Assessments, not in a traditional examination venue, but rather on a computer, possibly at home. Now, in the midst of the coronavirus lockdown, the world has no idea how long the coronavirus will directly and indirectly affect us. What we do however know is that every individual, every company and every institution, has indeed been affected by the coronavirus in some way or another.
In this regard, Euromonitor International, a London based independent provider of strategic marketing research, did a comprehensive study to forecast how Covid-19 will possibly affect consumer trends over the medium to long term. To accomplish this, Euromonitor International re-analysed the 10 global consumer behaviour trends it identified for 2020, prior to the outbreak of the coronavirus pandemic. The objective was to potentially predict consumer behaviour once life return to (the new) normal. Below is a summary of the findings:
Trend 1: Beyond Human
According to Euromonitor (2020), prior to the outbreak of the coronavirus consumers looked at technology, including Artificial Intelligence (AI) and robots to take over certain human functions. Using a robot will certainly be welcomed by many families in completing mundane tasks such as washing dishes, ironing and even making a good cup of coffee. Companies were investigating how AI can be used in their long term strategies to improve efficiencies.
But now, during the pandemic, people are either in quarantine or lockdown, some choosing self-isolation. This has led to a need for contactless services and technology. There has been a rise in the selling of voice controlled technology, the use of chatbots (to obtain information) and the demand in smart speakers and – household devices.
Companies are now investing in robotic automation for example in some medical sectors. Walmart, is using robots to clean its floors. As people are increasingly becoming comfortable to use robots, robots are going to move from a novelty item to an essential item.
Example: Meituan Diaping (China)
Meituan Diaping, in Beijing, China, is a leading food delivery company. Since February 2020, it has been using autonomous vehicles to deliver its foods. Even though this was technology that the company was developing pre coronavirus, the pandemic forced Meituan Diaping to implement the technology sooner than originally anticipated. Their no-contact delivery has allowed it to respond to consumer demands firstly, but it also addresses environmental issues, as the vehicles ease traffic congestion and the electric cars are more environmentally friendly than normal fuel-operated cars.
Trend 2: Catch me in seconds
Through the internet and digital technology, consumers were used to receiving more content in less time. People were not interested in reading long-winded advertising messages. They were seeking personalised, authentic and appealing messages and communication channels. The consumers were expecting brands to identify the most useful content for them. They needed brands to reassure, to provide engaging narratives, and consumers therefore demanded short, speedy and multisensory messages.
Now, amidst the virus pandemic, social distancing and fewer face-to-face interactions have become part of our day-to-day lives. Consumers are worried by the virus and its implications. They are distracted by the merging of work-, home – and play life, all in the same physical space. When reaching out to consumers now, brands must rather be reassuring and supportive, as opposed to selling a product. Brands must show what they are doing to fight the virus and improve public health. Consumers want to be engaged and have fun with brands in these difficult times.
Companies would need to be agile and relevant to engage with people who are preoccupied and scared. This will place them in a good position post lockdown. The world is possibly going to face the worst recession ever, consumers are going to be extra careful on where they spend their money. Brands that were proactive during the lockdown will possibly stand out and be favoured above those that that did not engage in positive ways with their audiences.
Example: Giffgaff (UK)
Giffgaff is a mobile telephone network. The company launched an advertising campaign called ‘putting community first’ with the objective of providing people with the means to be there for each other and be able to share, through a mobile virtual network. Giffgaff went further to provide consumers with information and tips on how to deal with isolation and mental health concerns. Its focus on people rather than product or services allowed the company to build positive brand associations.
Trend 3: Frictionless mobility
People had the freedom to move around in congested cities. This has, in developed economies at least, shifted the consumer’s mind-set from ownership of some form of transport to access of transport. People had the freedom to move around and used apps and technology to access transport and pay for transport tickets.
The coronavirus has stalled this mind-set – people movement is limited and people are vigilant and cautious when it comes to mobility. People have moved away from sharing transport due to the inherent health risks, and in some cases are starting to use their owned transport again. There has been an uptake in cycling again – in Germany pop-up cycle lanes have been created, specifically designed to have enough space to allow for social distancing amongst cyclists.
Whilst consumers will slowly start resurfacing once the worst of the epidemic is over, flexible working hours will be more of the norm. Over the longer term, frictionless mobility will still be important, but maybe not to the extent as pre covid, i.e. rush hour traffic may be something of the past or at least the intensity of rush hour will be substantially reduced. Companies should be looking at investing into alternative sustainable solution, which include the removing or limitations of health threats that transport sharing brings about.
Example: Wheels (US)
Wheels, an electric bike start-up company, suffered huge losses due to the contamination scare. Wheels partnered with Nanoceptic, a company manufacturing self-cleaning service products. Nanoceptic develop a skin on scooters’ bike handles which continuously self-cleans. This allows Wheels to safely redeploy their fleet of scooters, and to adjust rental pricing plans for better deals with regular users.
The bottom line is that companies need to actively limit any health threats to their consumers.
Trend 4: Inclusive for all
Consumers were demanding that companies develop products and services that are accessible to all people, including those with physical or mental disabilities. Consumers wanted brands, products or marketing initiative which make inclusivity the foundation of their business – companies had to embrace people with disabilities, and actively try to understand the needs of such consumers. Business had to enable fully immersive opportunities for everyone.
Now, with the Covid 19 virus in full swing, this trend has become even stronger. Anxiety levels are high, especially for disabled people as they tend to have lower immune systems which makes their risk of catching the virus even more pronounced. Disabled people also requires carers, which makes social distancing impossible in some cases. It has become even more important for disabled people to have access to information. As the general public has a better understanding of the disabled’s world due to themselves being in isolation or lockdown, there has been an increase in community spirit. People are investing their own time in helping such people and putting pressure on companies to do more.
Disabled people, on the other hand, benefit from technology, for example, a greater ability to access virtual reality. Online communications enable more people to interact virtually and participate in a variety of activities. This certainly helps people with mental health problems as well as physical disabilities.
Example:UNESO World Heritage (Machu Piccu)
UNESCO, with their immersive virtual tours, allows all people, including those with physical disabilities, to access Machu Piccu in Peru. It allows viewers to really get a feel for the greatness of the site. Uvisit, the platform that UNESCO uses, enables any business to set up a virtual tour or event, allowing it to reach new audiences.
Trend 5: Minding myself
People were focused on mental wellbeing, including preventing the physiological effects of stress, worry and sleeplessness. Traditional stimulants such as alcohol and tobacco was used by practicing so-called ‘responsible stimulation’. Companies provided products and services enhancing mental wellbeing.
It has now become a matter of rebalancing, of creating a new normal. People need to manage their anxieties, therefore consumer behaviour will focus on self-care. Now, during Covid 19, people are secluded, and many are living in fear of the unknown and even claustrophobia due to living with family with no outlet for physical and/or mental space. People need to learn to live in the new state of unprecedented normality. As there are higher levels of anxiety levels due to the lockdown, people are using products and services that helped them manage their feelings and handle the severe emotional and physical situations. Herbal products and legal cannabis products are in higher demand. Social networks are used to fill the gap left by lockdown and social distancing. The uptake on relaxation and medication apps have increased.
Even after the dust of the coronavirus has settled, mental health will remain a focus. Consumption patterns will focus on the ‘self’ and good mental and physical health products will be in demand.
Example: Mindhope (Spain)
Mindhope provides mental health services. The company started a new therapy platform which connects consumers with psychologist. The platform also facilitates online appointment bookings, and is very easy to use. People who are already struggling can therefore easily cope with the use of the technology.
In general, mental wellness orientated solutions will become increasingly important as Covid-19 has already demonstrated its huge impact on physical and mental health – the ease of use and accessibility for all are key success ingredient.
Trend 6: Multifunctional homes
With the advent and growth of the coronavirus spread, people started cocooning themselves – home became a shelter from uncertainty. Businesses are actively exploring and implementing remote working and the world has seen a rise in the use of technology to make it easier to work, shop and play from home.
Now home equals the office. People are socialising in virtual space. Social media has replaced people’s previous social gatherings. Every day has become casual Friday as people are working in casual clothes from home.
School going children of all ages have moved online and people attend gym -, cooking -, and other classes online. People are now celebrating birthdays both alone and online. Consumers are using online platforms less to promote themselves, as in the past, but rather to stay connected with others. Livestream and video chats are increasingly being used by all.
Euromonitor (2020) predicts that the transition from home as the hub is here to stay. It may not be to the extreme that it is during the lockdown, but working from home will certainly become a greater reality. Consumers will furthermore change their at-home-habits – more working from home and more casual dressing will become the norm. Virtual lifestyles will run parallel with physical activities and – lifestyles when the world ‘comes out’ again.
Example: Zoom (US)
Zoom is a communications technology company. It provides functionality for companies, groups and individuals to create and attend virtual meetings. These services are offered free of charge to schools in some countries. It has become a social platform where people do remote video chatting, share drinks, do quizzes and party.
Companies need to invest in technology and other equipment to facilitate employees to effectively work from home.
Trend 7: Private personalisation
Early in 2020 consumers wanted to received tailored products and services. But there was a general hesitancy in providing personal information due to fears of who has access to data and how will such personal data be used. Business was forced to heavily invest in secure data collection methods in order to ensure privacy.
Now, people are more worried about the virus and more prepared to share data in the name of public health. Privacy concerns are put on hold in the short term. There will be a widespread increase in online ordering and payments, also amongst older people who tended to shy away from this previously, not trusting online shopping. Online shopping has become a necessity and is not a choice anymore. Companies would need to make privacy messages clear, especially for new audiences. Companies would furthermore need to review how they communicate to customers on the benefits of sharing personal data.
Example: Sentinel Health Care (US)
Sentinel is a health tech start-up that monitors consumers’ health remotely. It has launched a fever tracker application, enabled from a wireless thermometer, that sends real-time updates about an individuals’ health to healthcare systems, healthcare providers and so on. Sentinel identified a gap in the market which they were able to leverage by engaging with healthcare professionals to provide a personal solution that appeals to consumers’ desires to have a health monitor join the crisis. But consumers realised that they need to share personal data in order to be able to use Sentinel’s application. The benefits of sharing personal data, in this instance, far outweighed general fears of the potential mismanagement of data.
Trend 8: Proudly local going global
Consumers want products that both have both a local and national flavour. Covid-19 has catapulted this localisation. Consumers are searching for both national and local products and brands that highlights their local cultures, social norms, and traditional habits. Niche brands rode this wave by accentuating the localness of brands as part of their global marketing strategies. Businesses started increasingly to focus on local suppliers as borders were closed, whilst multinationals increasingly localised their overall operations. The virus has created a sense of ‘getting through this together’ through local business and communities support.
Post coronavirus consumers’ fear of contagion will still be strong enough to drive demand for local products. Local producers would need to provide stock and make the products that consumers want. Supply chains will become more transparent as consumers will want to know where their products are sourced. There will be a continued support of local business. The expected recessions after Covid- 19 will force multinational companies to invest even further in local manufacturing and supply chain services to provide more local products.
Example: Withies Delicatessen (UK)
Withies is a delicatessen in Somerset, United Kingdom, that offers local produce. With the outbreak of Covid, Withies started offering a new delivery service of freshly baked products to anxious or self-isolated consumers. Companies that adapt and introduce new services or products secure future trust and loyalty from consumers. In addition, they are expanding their reach to new consumers.
Trend 9: Reuse revolutionaries
Ethical consumers wanted a waste free future where products lasted longer and less waste was produced. Previously legislation surrounding the use of plastic shopping bags have changed in many countries, ranging from the banning of plastic bags under certain circumstances, to the consumer having to pay for plastic shopping backs in other. Such changes had led to the sharing and reuse of plastic in general. This trend lessened through Covid as people were afraid to touch products previously used, even if cleaned. There was a temporary move back to single use – and disposable products and staying healthy and safety.
Now, brands need to rethink – it is more about being clean than being green, as anxiety has moved consumer’s focus to health and safety. Over the medium term consumers will be worrying more about reinfection than green products.
But over the long term sustainability will still remain high on consumer’s agenda. Consumers will slowly return to sharing, reusing, renting and refilling. Companies will still need to embrace the reuse trend and educate consumers about the safety of reusable options. This will include clear instructions on how to reuse and recycle to avoid the spread of the virus.
Example: Refill APP (UK)
Refill APP allows consumers to refill their water bottles from a tap at specific points in the United Kingdom, free of charge. Water is generally found from either fountains or businesses which provide clean drinking water to the public. But now, with the close of many companies, Refill App’s listing has changed. For those companies, however, that can continue to safely provide drinking water, Refill still provides their locations on the app, but with an included message on health and hygiene.
Trend 10: We want clean air everywhere
Younger generations have increasingly raised concerns on air quality and demanded companies reduce emissions to provide these generations with a sustainable future. Awareness of air pollution impacted where consumers travelled and ate. Consumers favoured brands that were doing something about air quality. Companies globally continued to look towards technology to fight pollution.
Limited travel due to the coronavirus had a reversing effect on climate change. Furthermore, there is less room for eco-anxiety. Rather, the focus will shift to indoor pollution, where people will be anxious about their own health, and cleaning, washing hands, disinfecting things and so on will continue. As the lockdown loosens, consumers will refocus on sustainable living to the advantage of both people and the planet. There will be a combined focus on both the prevention of air pollution as well as being clean as the impact of pollution on people with respiratory problems will increase respiratory viral infection.
Consumers will seek solutions against pollution and require companies to actively innovate in their drive to prevent pollution.
Example: BYD (China)
BYD is the biggest electric vehicle manufacturer in China. With the coronavirus epidemic, BYD adjusted its production lines to supply face marks and hand sanitisers, to the volumes of five million face marks and 300 00 bottles of hand sanitisers produced per day. The switching of BYD’s production to manufacture protective equipment captured consumers’ hearts. Companies such as BYD may, post lockdown, be ahead in terms of consumer goodwill relative to companies who did not similar things during the virus spread.
As per Euromonitor International (2020), the coronavirus has to a greater or lesser degree, impacted all the pre-identified consumer trends for 2020:
The trends ‘multifunctional homes’, ‘beyond human’, ‘minding myself’, ‘proudly local’, ‘going global’ and ‘inclusive for all’ experienced an immediate spike as a result of the virus. This was followed by a long term shift in consumer behaviour relating to these trends.
‘Catch me in seconds’ experienced an immediate spike but is expected to follow its pre-covid patterns.
‘We want clean air everywhere’ has not changed, but may be even more pronounced due to the correlation between poor air quality, the coronavirus and respiratory problems.
‘Frictionless mobility’, ‘reuse revolutionaries’ and ‘private personalisation’ were trends that saw an immediate drop but which will expectedly recover after normalisation.
The key take-aways from this research conducted by Euromonitor (2020) are:
Currently, both consumers and business are dealing with extreme disruption, necessitating the need for rapid adaption. Brands need to be repurposed as being useful, helpful and supportive.
In the near term people and companies should use this time effectively to do tasks that they have not had time to do before. Planning should focus on returning to a new normal.
In the long term companies will be forced to reshape their future strategy planning, build in flexibility, prepare for multiple scenarios and possibilities and overall embrace technology.
Angus, A (2020). How is COVID-19 affecting the top 10 global consumer trends 2020?, webinar file in How is COVID-19 affecting the top 10 global consumer trends 2020?, Euromonitor International. Available here. [Accessed on 15 May 2020]
Coronavirus and the end of the global supply chain
Coronavirus has shown how fragile our cost-driven, just-in-time processes really are. With practitioners adapting to survive while planning more resilient systems for the future, will procurement ever be the same?
When the first container ship arriving from China at the port of Vancouver was cancelled in January this year, it didn’t seem particularly significant. By mid-March, when China’s struggle with Covid-19, aka coronavirus, had become so all-consuming that 30 more journeys had been cancelled, Vancouver’s port officials were facing a crisis of historic magnitude.
That consumer goods weren’t being unloaded from China as per the schedule was less of a concern than the fact that Canada, which usually filled those containers with lentils and peas, had two months’ worth of crops stuck in port (historically, roughly a third of Canada’s crops have been exported in containers). Imports were also disrupted: one local food company had to pay a premium for spices from Thailand which arrived a month behind schedule. Brazil’s coffee makers suffered too as the missing containers made it hard for them to ship their products to China.
The problems of countries and companies along just one shipping route indicate why some economists, notably Simon MacAdam at consultancy Capital Economics, are predicting a 20% dip in trade volumes this year. That is significantly worse than the last recession in 2009, when volumes fell by 13%.
The bottlenecks in Vancouver did not grab headlines in the same way as various countries’ difficulties in speeding up production of ventilator kits. But as Professor Tim Benton, research director of the Chatham House think tank’s energy, environment and resources programme, says, they remind us: “We have created a global supply chain that, for all its financial efficiencies, has very little resilience.”
Coffee is a case in point. One industry estimate, cited by The Economist, suggests that 29 companies across 18 countries need to collaborate to make “one humble cup”. That may, Benton observes, work financially for the companies concerned – and for consumers who can buy their favourite brand at a lower cost – but it cannot, in any true sense of the word, be described as efficient. A hurricane, strike or outbreak of coronavirus at any of those 29 companies could severely disrupt the supply chain, and the spread of the virus into Latin America has already led to huge spikes in commodity prices as buyers anticipate lockdowns and shuttered businesses. And that’s without the kind of surge in consumer demand that led to a rise of more than 20% in British supermarket sales during March 2020.
All those photographs of empty shelves, explicitly condemning shoppers for panic buying and hoarding, obscure the fact, Benton says, that governments are hoarding too. “Kazakhstan banned exports of wheat flour, Thailand has stopped exporting eggs, Vietnam has suspended rice exports and Russia is talking about limiting grain exports to protect supplies,” he says. “It’s not clear how many more governments will follow suit, but if they keep putting their nation first, the situation can only get worse.” Protectionist policies, coupled with panic buying, could create a self-perpetuating cycle of rising food prices.
What many analysts referred to as the “hidden costs of globalisation” were becoming visible even before the pandemic struck. “There was a clear sense that we had reached peak globalisation,” says Andrew Missingham, the co-founder of creative management consultancy B+A. “The political shocks of 2016, protectionist trade policies and climate change were already asking fundamental questions about that model.” Some of the foundations which businesses took for granted no longer exist in a pandemic age. “If you look at a business like ours, for example, it was predicated on three factors – the internet, cheap flights and free movement of people – and two of those no longer apply,” says Missingham.
Since the last global economic crisis in 2007-2008, many parts of the procurement profession have performed Herculean labours, protecting profits, companies and jobs by cutting billions of dollars in cost from the world’s supply chains. They did that, primarily, by seeking out places where they could make things at the lowest cost – often in China – and minimising inventory by applying lean manufacturing or ‘just-in-time’ principles.
The result is a global supply chain that is interconnected, intricate and sometimes unfathomable. As Duncan Brock, group director, CIPS, says: “The interwoven nature of modern supply chains means it is almost impossible to say for certain just how reliant we are on China for manufacturing and assembly.” Companies that placed such trust in Chinese suppliers that they used single-sourcing now face severe disruption.
Diverse sourcing strategies
“One key lesson from the pandemic is the importance of spreading the risk,” says Tim Lawrence, supply chain expert at PA Consulting. “Companies should avoid clustering suppliers in one region and around similar supply chains, reconsider whether it makes sense to create isolated supply chains and understand the location risks in every tier of the supply chain. Your supply chain may not be as diverse as you like to think – for example, your alternative suppliers may themselves be reliant on tier 3 or tier 4 suppliers in the same region.”
The obvious, if laborious, way to avoid such problems is to map your supply chain. “It isn’t easy,” admits Lawrence.
“It took Airbus five years to do it with the A320 passenger aircraft. And supply chains change so fast that the map might be out of date on the day you complete it, but digital technologies – especially 5G, data analytics and artificial intelligence – are proving increasingly helpful. They can improve visibility and connectivity, generate early warnings, and help free up supply chain leaders to focus on the strategic issues.”
Strategic questions would include assessing when it makes sense to keep the supply chain within the business. “There are certain components that are so critical to the business that the most secure supply chain might be to vertically integrate them,” says Lawrence.
As global supply chains hit bottlenecks many neither envisaged or expected, Missingham predicts: “We will see a lot more decentralisation, regionalisation and localisation.” Some pundits have talked of a ‘great reset’, where reshoring becomes the new norm. In an increasingly automated workplace, labour costs are no longer as critical when locating factories. Last year, multinational toolmaker Stanley Black & Decker shifted production of its Craftsman tools from China to Fort Worth, Texas, without increasing costs.
Brock expects new sourcing strategies to emerge but warns that any ‘reset’ will take time: “This may be the last straw for global sourcing as supply chain managers look local but, to put this in context, 290 of Apple’s 800 suppliers are based in China so such a strategy would take years to implement.”
Diversifying a supplier base is not always straightforward. Companies may be required, Brock says, to form alliances within their sector to develop new sources of supply where choice is limited or existing suppliers are clustered in the same region. Unilever has opted to protect the suppliers it already has, announcing a £420m cashflow relief scheme to expedite payments to SMEs in its network and offering credit to small retailers.
Learning just in time
Just-in-time manufacturing – reducing inventories to 15-30 days of stock or even less – has been a multi-billion-dollar boon for the global economy. Lawrence does not foresee a wholesale rejection of just-in-time or lean, but a reappraisal based on a more realistic assessment of the potential cost to the business: “There will be certain components and materials where you decide that it is more efficient, in the broad sense, to have six to eight weeks’ stock than three or four.”
Popularised by Robert Hall in his 1987 book Zero Inventories, the just-in-time philosophy always sat uncomfortably alongside procurement’s cautious ‘just in case’ approach to buying inventory. Dazzled by the savings, many companies ignored the fact just-in-time made it much harder for procurement to understand how extensive, responsive and opaque supply chains really were. This truth came home in February when a South Carolina hospital ran out of surgical gowns. Its traditional supplier in China had contamination concerns over its stock – not related to coronavirus – but when managers tried to buy replacements, with the pandemic escalating, they struggled.
But in the middle of a crisis this severe, there is also a temptation to overestimate how profoundly our behaviour as individuals, companies and organisations will change. The 2007-2008 depression signalled, as so many people forecast at the time, the end of the road for a certain type of free market capitalism. It seemed a reasonable proposition at the time but it didn’t work out that way. The idea of getting back to ‘business as usual’ can induce a certain complacency.
In this crisis, many managers – not just in procurement – will argue that nobody could have seen this coming. That is true, up to a point. Nobody could have predicted how quickly and radically Covid-19 would change the way we live and work. Yet, for those companies which were paying attention, the signs were there to be interpreted.
The US grocery chain H-E-B began monitoring what was happening in China in the second week of January. After two weeks of analysing various sourcing reports and maintaining close, constant contact with companies in China, the retailer redrafted the disaster plans it had used for the swine flu outbreak in 2009 and Hurricane Harvey in 2017 to confront coronavirus.
As Craig Boyan, H-E-B’s president, told Texas Monthly: “Chinese retailers sent some pretty thorough information about the early days of the outbreak, how that affected grocery retail, how employees were addressing sanitisation and social distancing, how quarantine affected the supply chain, how shopping behaviour changed and what steps they wished they’d taken to get ahead earlier in the cycle.”
Using that information, H-E-B promptly took various steps: forming a remote working committee to coordinate policy and actions, reducing opening hours to give more time to put product on shelves, rationing certain product purchases and paying local beer distributors to bring eggs to its stores. Even so, Boyan admits, they did not resolve every challenge: “We’re still struggling to get eggs and we still have a hard time understanding why toilet rolls were the first things to go out of stock.”
Planning to fail
If the coronavirus is a black swan event, there is an obvious temptation to plan on the basis that it will never happen again – or at least not in our working lives. The call of the next quarter’s targets can often sound more compelling, but Lawrence says supply chain leaders need to change their mindset. “It is easy to focus on the small things that happen often, or may come up in the next three to six months, and plan scenarios for those, but to be honest you could delegate that task to the technology. As this pandemic shows, it would pay companies to look at the really big things that don’t happen very often and run scenarios for those.”
Understanding risk is partly about what supply chain leaders know but also, Missingham says, about what they do with what they know: “People working in supply chains are, in my experience, real experts in the people, challenges and opportunities they face – be that individual components or particular raw materials. The problem is that that knowledge is too narrowly held within organisations. In future, one of the important jobs for supply chain specialists will be to educate a broader part of the business.”
Covid-19 has shed an unforgiving light on every flaw in the world’s supply chain. The pandemic has shut factories, stalled shipments, fuelled labour shortages, closed borders and will, the United Nations estimates, cost the global economy at least $1trn. “In times of crisis and uncertainty, it is hard for businesses to plan but supply chain managers who act now and keep a close eye on such data as the purchasing managers indices as they make plans can mitigate the damage,” says Brock.
Yet in future, when supply chain leaders have the breathing space to think, let alone plan, for the long term, they might conclude that prevention is the best form of mitigation. Companies which neglect the opportunity to fundamentally rethink their supply chains do so at their own peril.
That is especially true, Benton argues, when it comes to defining a more sustainable, healthy and environmentally friendly food production system.
As he says: “The question is not ‘will it happen?’ The question is ‘when will it happen?’ We could have started to create a sustainable, equitable and nutritious food system in 2003, after the outbreak of SARS. It could happen now or it could happen in 10 years’ time when the next crisis occurs, but for the sake of our health, and the health of our planet, it cannot not happen.” What goes for the food industry, you suspect, goes for the other sectors of the global economy.
The competition is no longer between brands or even between companies; it is between supply chains (networks). Supply chains in the time of coronavirus have changed, possibly forever. MARZIA STORPIOLI reports.
Supply chain management has been likened to a philosophy, a concept rather than an essential service.
Historically, companies relied on strong brands and good products to win over the consumer. Competitive advantage was gained by the organisation based on the strength of its brands and its reputation for quality products.
But as the COVID-19 pandemic continues its inexorable march across the globe, supply chain management is no longer being considered merely a concept, but rather a life-saving essential service used for the cohesion of all supply chains so that they may work in concert with one another in order to satiate the needs and wants of people and businesses at all times, including times of crises.
It’s useful to remember wars have been won and lost by the implementation and control of either effective and efficient supply chain management, or the lack of using it to its full potential, as was experienced during the Napoleonic Wars and World War ll. There is little doubt that the post-COVID-19 world will be decidedly different to life as we knew it prior to this scourge befalling us.
There’s no doubt most nations were caught unprepared by its rapid advance. In South Africa, consumers – like those across the globe – adapted their buying behaviour to “cope with this rapidly evolving situation”, as Nielsen researchers put it.
Retail outlets – supermarkets, pharmacies and wholesalers – were unable to satisfy consumer demand for sanitiser products, demonstrating the inability of supply chains within South Africa, and globally, to respond to a meteoric increase in demand for hand washes and sanitiser products, household and industrial bleaches and surface cleaning solutions driven by the global crisis.
Just-in-time (JIT) and lean manufacturing, once seen as the pinnacle of achievement in supply chain performance, may no longer be effective. They were implemented across most global supply chains in the face of mounting pressure to reduce supply chain costs – the aim being to continually strive for increasing levels of efficiency while reducing costs overall.
Efficient, but not robust
These supply chains are operating on razor-thin margins, so much so that they are no longer robust and unable to respond to ‘shocks’ in the system, and have limited capacity to respond to disruption in their supply chains. They are efficient, but they are not robust.
If the disruption continues, eventually these supply chains will stall – manufacturing will stop due to a lack of raw materials or spare parts.
Today, companies that achieve a sustained competitive advantage (Zara, 3M and Dell) are those who have invested significantly in developing responsive logistics capabilities. They are demand-driven and designed from the customer backwards (rather than from operational capability forward – forecast driven). Their supply chains are agile and responsive to changes in consumer behaviour.
Talking of consumer behaviour, self-preservation reigned ahead of South Africa’s national lockdown as the ‘haves’ stockpiled goods at the expense of the poor, the needy, the aged and the sick.
Imagine if the world did not have an effective and efficiently run supply chain to constantly channel food, fuel and other essentials to replace those that have been exhausted because of this ‘feeding frenzy’. There would be further chaos, indescribable misery, an uncontrolled mortality rate and above all, a world economic recession that would surpass the 1929 financial crash!
With the pandemic spreading to South Africa a few months after the initial outbreak in China, Nielsen was able to research global markets, delivering insights into how retailers are dealing with challenges brought about by coronavirus.
Turning a crisis into an opportunity
The research shows that retailers are facing three primary challenges: insufficient inventory of some categories, difficulty in logistics and distribution, and inadequate staff to deliver orders.
Those able to organise resources and respond actively to the epidemic and launch measures to “help turn crisis into opportunity” will thrive. These, Nielsen reported, included “flexible co-ordination of participants in the supply chain, ensuring the efficiency of product supply, showing care and concern for employees, rationally deploying staff, adjusting the store’s operating hours, expanding businesses through online channels and in community and strengthening corporate brand marketing to enhance consumers’ trust and creating a favourable impression”.
Nielsen has identified six key consumer behaviour threshold levels that tie directly to “concerns around the novel coronavirus outbreak. These thresholds offer signals of spending patterns, particularly for emergency pantry items and health supplies with these patterns being mirrored across multiple markets”.
As African countries such as South Africa and Kenya announced their country-specific responses to the outbreak, Nielsen found that global consumers were adapting their purchase behaviour to cope with the rapidly evolving situation.
“As patterns begin to emerge in response to news events of this nature, it will be imperative for companies to learn from these scenarios so they can sustain growth even in times where COVID-19 is deeply impacting people’s lives. These patterns will help provide leading and trailing indicators to those trying to understand how people will respond as developments continue to play out at different times in different countries,” said Scott McKenzie, Nielsen’s global intelligence leader, adding that this would be critical to understand as stores worked to maintain supply levels of in-demand items.
South Africans entered threshold #5 ‘Restricted Living’ on Friday 27 March 2020. Consumer behaviour at this stage was characterised by severely restricted shopping and constraints due to supply shortages, delivery fulfilment challenges and caps on product quantities, Nielsen reported.
The lessons learned
Of the retailers surveyed by Nielsen on their attitudes towards business for the rest of the year, 67% said they would make efforts to expand online channels and accelerate home-based business / retail warehouse layout.
“Fifty-three [percent] said they would change their product mix according to the shopping habits of consumers and increase the inventory and on-shelf number of health, disinfectant and protection products,” Nielsen reported. “Forty-three percent of the retailers say that they would work on their supply chains, especially those for fresh food, strengthen the ties with various brands and enhance communication efficiency.”
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