February 2012 | Commentary | Checking In

The Fifth P of Marketing

Tags: Supply Chain Management

Keith Biondo is the publisher of Inbound Logistics magazine.

Why are the four Ps of marketing—Product, Price, Promotion, Place—important to logistics practitioners? Collaborating with suppliers and being tightly wired to customers and their demand signals helps craft the right Product. Reducing inventory, touches, and supporting infrastructure helps keep any Product's Price lower. And when your Promotion materials arrive where they need to be, and on time, you amp getting the word out effectively.

In our world, Place is the one P that keeps the other three standing. You can do all the hard work to have the right product at the correct price, and promote it from the mountaintops, but if it is not in front of customers when and where they need it, you've got nada.

Producing our annual education and career issue reminded me of a column I wrote back in 1994, suggesting a fifth P that's important to logistics: People—especially considering the adoption of complex processes requiring advanced logistics and supply chain management skills.

Recent comments from Apple management indicate why my fifth P is relevant. When asked why Apple chose Asia to site its plant locations, CEO Tim Cook left unsaid the attractiveness of low-cost labor, an understandable market advantage in the consumer electronics space Apple dominates. Yet greater costs can be found in component parts and supply chain management. The focus on Asia is flexibility. "Factories in Asia can scale up and down faster," Cook said. He means Asian supply chains have surpassed U.S. supply chains.

Before you kill the messenger, a recent press report gives an iXample of what Cook means. A last-minute iPhone screen redesign at Apple headquarters threatened the success of a big, expensive marketing push. Management at the Chinese factory said they could help by getting the line revamped in time to hit the deadline. New supplies were marshalled. Foremen roused 8,000 workers from company dorms, fed them, and explained the mission and what was at stake.

Within a half-hour, the first shift started fitting the new glass in place. Ninety-six hours later, the plant was producing 10,000 phones a day with the newly designed glass. People made this happen—manufacturing and supply chain People.

For more evidence of the growing importance of People to logistics, consider why so many auto plants are locating and expanding in the U.S. South. Yes, for tax incentives and transport infrastructure. But the skilled and motivated manufacturing and supply chain workforce, at executive management and line-job levels, plays a significant part in these expansions.

People with a depth of supply chain and manufacturing skills can make a real difference—over there or over here.