14 Jul 2015

Using performance benchmarking to educate yourself on what you are buying

what are the first three brands that come to mind when you think globally?  most likely, brands like google, apple, and coca-cola are the first ones you think about.  influential brands are easily recognizable and consistently rank highly when discussing their value.  these brands, along with numerous others, have not grown overnight, but have achieved steady growth through disciplined business practices and a willingness to grow outside of their core business.

the question is: how do they grow outside of their core competencies and product categories while maintaining their brand integrity?  whether a brand is just entering the market or is globally recognized, a critical step to success is to use smart sourcing.

smart sourcing utilizes data available today to influence decisions that have a lasting impact on the future.  as brands expand, very few continue to own their entire supply chain.  they can't.  it's too costly to keep up with demand.  they have to source products and components of products to grow the business.  the problem becomes, how do you know you are purchasing a high performing product at a competitive price?  too cheap and performance suffers.  too expensive and the product won't sell.  with more frequent and larger purchases from suppliers, it makes sense to focus on these sourcing decisions to ensure that the product (or component) being purchased lives up to the strategy of the brand. utilizing smart sourcing not only improves the value of the product, but also enhances the brand.

so, how do you do it?  in the fast paced global manufacturing economy, sourcing can become a headache for companies.  the best way to live out product strategy is by educating yourself on exactly what you are buying, aka smart sourcing.  through performance benchmarking, you can learn exactly what the market is currently accepting.  using that information, you can then develop performance specifications that tell suppliers exactly what they need to provide to achieve your brand integrity and compete on the shelf.  rather than telling your potential suppliers that you need a motor, tell them exactly what motor you need, one that passes five specific performance tests at five specific levels. 

with smart sourcing, a brand no longer has to hope its finished product outlives the brand image.  it now has the tools necessary to ensure the brand is consistent from component to component, product to product, and consumer to consumer. 

intertek's product intelligence consulting group focuses on providing the industry with services to build, maintain, and protect brands.  smart sourcing is one of the tools we utilize to partner with our clients on their way to becoming one of the world's most valuable brands.

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