With the titanic shift that has occurred in business, only customer-centric companies will survive. For the manufacturing industry, having to deal with end customers has been a shock. Traditionally, manufacturers did not have direct contact with customers and could hide behind a sales channel of distributors, resellers, or integrators. The advent of direct digital sales channels has brought customers and manufacturers face-to-face, so the demands and wishes of customers can no longer be ignored. Managing them can be challenging, but there are three ways to get started.
Diversify the Supply Chain to Spread Risk
“Pivot” has been the most-overused word of the past year. By definition, it means companies are able to adapt to market circumstances instantly. For most businesses, flexibility and agility have been corporate qualities for longer than just the past 12 months. But in 2020, every organization had to pivot to change its existing ways of operating. While most supply chains have shown great resilience, it became clear that single sourcing as a means to reduce production cost comes with a risk. In the future, manufacturers need to diversify that risk by spreading production over different countries and even bringing some production home if feasible. Diversifying supply chains will help prevent product shortages and allow manufacturers to react quickly to future disruptions. But with a multi-pronged supply chain, powerful tools will be needed to manage these complex streams of raw materials, half-finished products, and finished goods. Providing customers with information access on the supply chain journey at various touch points helps reinforce the customer centric approach as previously end customers were granted limited visibility.
Glocal: Think Global, Act Local
More than ever, the manufacturing industry needs to think global and act local. To make that happen, processes have to be streamlined internally and externally. Programs such as Quote-to-Cash can ensure the entire process runs seamlessly – from taking the customer order to invoicing goods to services delivered to recognizing revenue. These software solutions make it possible for manufacturers to sell directly to the consumer. Portals and e-commerce tools bring customers and manufacturers together and allow companies to react swiftly to customer requests, demands, and fulfillment needs. And while these tools make it possible to sell direct, the software needs to take into account the partners that work with customers and vendors. By putting customers at the epicentre of the supply chain journey organisations can now start to embed an experience first culture across the supply chain compared to the past.
Get the Right Data
For companies to maximize their efficiency, it is crucial to know what customers expect and when they expect it. This predictability allows sales and operations to make sure the entire supply chain is geared up to deliver the right product on time and with the right margin. If everyone in an organization has access to the same data and reports, predictability can be achieved to match supply with demand. A single source of data means all colleagues have insight into stock levels, margins, run rate business status, and pending opportunities. And, when companies have a single source of truth, it becomes much easier to use artificial intelligence tools such as Einstein Analytics to help make the right decisions and steer future directions. Accurate forecasting is a great way to boost profitability. In fact, according to the Institute of Business Forecasting, an average consumer packaged goods company can save more than $3 million for every percent improvement for under-forecasting errors and $1.43 million when improving the over-forecasting error.
Change is hard, but the challenges of the past year have pushed companies to embrace or advance their digital transformations due to evolving business practices. The effects will be felt in the long term. According to The Economist, a new dawn of technological optimism is breaking. Companies that capitalize on these technological breakthroughs will be the winners in the years to come, even for the manufacturing industry.