Technology is changing the world, and it’s also changing manufacturing
Incorporating digital best practices, such as working from relational databases, providing real-time information to employees and customers and improving the customer experience through online sales is what will separate the manufacturing winners from the losers over the next decade.
What’s Changed in Manufacturing
The internet has changed how customers interact with companies. We now live in a digital economy, where the ability to purchase almost anything is at the tip of your fingers with one click of a button.
Online shopping used to be thought of as only something that companies selling directly to consumers needed to factor in. However, the digital economy has so deeply permeated our behaviors that this isn’t limited just to B2C customers anymore. Things are starting to change for B2B commerce too, and companies that are smart enough to get on board will be the ones to reap the most successes.
Here are a couple of statistics to back up this change in purchasing preferences. A recent study showed that:
- 93% of B2B customers prefer to buy online when they’ve decided what to buy.
- 74% feel buying from a website is more convenient than buying from a sales representative.
- 56% expect to make half or more of their work purchases online this year.
This shows just how critical incorporating digitization into B2B and manufacturing is. B2B buyers want to be able to purchase products and get the information they need anytime, anywhere. They want their experience to be effortless and easy. And companies that don’t do this are going to facing a much shorter life expectancy.
How much time do your employees spend searching for information, making changes or fixing errors from inaccurate information?
Outside of some of the biggest companies, manufacturing today remains largely a “pencil and paper industry”. This type of mentality has a huge impact on how productive your business can be. It leads to departments working in silos, not sharing changes and updates and tribal knowledge that could be useful for everyone staying isolated.
This is obviously very inefficient. You have departments all over, working on different documents and outdated information, which can lead to the loss of time, and, as people leave, the loss of tribal knowledge.
Take care of this disconnect and optimize your internal operations. Start by getting everyone using the same database to store their documents, manuals and notes. Using this type of relational database in the cloud (meaning it can be accessed from anywhere) allows everyone to be connected and working from the same information.
This not only will have an impact for your engineers, but will also allow your field techs and customer service reps to access up-to-date parts information.
Think of all of the time your people will save by having instant access to real-time information and breaking down communication silos. This alone can save hundreds of thousands of dollars for your company.
End users are more empowered than ever.
When making purchases, they want something that is high quality, low cost, delivered quickly and information they can get instantly.
Manufacturers in the past have relied on dealer networks or conducting business over the phone. While there will still be businesses where this works, more and more customers want to be able to get their information and ordering done online.
A recent study found that customers that have to speak to a sales rep to make a purchase are 4x as likely to go somewhere else the next time they need to buy something. We need get in a mindset of being customer-focused. If you can do that, you can gain loyalty, which will help sustain your business and sell more aftermarket parts.
One major source of revenue many manufacturers are missing out on is providing easy access to selling aftermarket parts.
Studies have shown that about $1 trillion dollars a year are spent on parts for machinery people already own. What may surprise you is that OEMs capture less than 50% of this market currently. It’s will-fitters and other dealers that are taking advantage of this high profit margin segment, which is too bad.
There is no one in a better position to sell your parts than you. You have a distinct advantage when it comes to enhancing the buyer experience. You have access to exclusive customer data, comprehensive product knowledge and more precise parts information.
Parts sales is a market that is sitting there for the taking and can provide a long-term steady stream of revenue after an initial sale of equipment. While there will always be some people who only want a bargain, shoppers have proven that they will pay for convenience and quality, which OEMs can provide.
The companies that are going to thrive and overtake their competition are the ones that recognize the opportunities available and incorporate technology into their operations and sales. By creating a strategy early, you will be able get a jump on the market and leave everyone else in the dust.