Digitize to Win: 3 Strategies for Manufacturers

Julia Marvin June 9, 2017 Tags: , , , , , , , , , ,
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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:man looks up parts information on computer

  • 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.

Optimizing Operations

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 You have departments all over, working on different documents and outdated information, which can lead to the loss of time, and, as people leave, the loss of tribal knowledge.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 tablet looking at a shipping facilityby 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.

an assortment of spare parts on a gray backgroundStudies 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.

In Summary
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.

Read about these strategies in action in our customer success stories. 

Manufacturers: Your Web Experience IS Your Brand

Eric Neyer May 23, 2017 Tags: , , , , , ,
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A leading customer experience consultant from the UK, Gerry McGovern, recently published an article titled, Your Digital Interface Is Your Brand. While Mr. McGovern typically focuses on more service-oriented institutions and businesses, the message is a definite reality for manufacturers.

Think about how the average customer interacts with a manufacturing company. Whether that customer is a dealer, a machine owner, a technician who is working to repair equipment…it’s very likely that whatever that person’s role, their first contact when seeking help or information will be in the form of a website visit.

Ten years ago, this certainly wasn’t the case, especially for manufacturers of heavy and industrial equipment. Their sales models generally involve a dealer network, and customers were trained to contact the dealer first with any needs, problems or support questions.

In this scenario, the dealer becomes the literal face of the manufacturer. And in the past, the dealer was the closest and most effective representative of the factory and the products it made.

Nowadays, rather than the local dealer being viewed as the closest extension of the manufacturer’s brand, customers see an OEM’s website as shouldering a larger share of the responsibility for brand loyalty.

As McGovern puts it, “Our impressions and experiences of brands today are increasingly digital.”

Online technical support boosts service efficiency and spare part salesHe goes on, “When I think about my bank today I don’t think about its physical buildings or its people. I think about the hassle I constantly have with Java every time I visit its site, how the navigation is not simple enough, and how if I have to ring support I can be waiting 10-15 minutes for someone to answer….”

Is this how your industrial buyers, dealers and equipment owners think about your website? Do you make it easy for current and future customers to access your site? Can they easily find what they need? What percentage of visitors can achieve their goals without picking up the phone? Are you putting an internal business unit’s needs ahead of the customers’?

If you can’t positively answer these questions, you haven’t given your online presence enough credit for the massive influence it has on branding, customer engagement and the future of your business.

Hiperbaric reduces pressure on aftermarket sales and services using Documoto

Julia Marvin March 21, 2017 Tags: , , , ,
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Hiperbaric makes high-pressure food processing machines that sterilize and preserve food products in factories around the world. As a company at the forefront of innovation, they were looking for a way to provide better technical support for customers.

Check out the infographic below to see how Hiperbaric has improved aftermarket sales, field service productivity and user experience using Documoto.

reducing pressure on after-sales support 
Download the full case study here.

10 Myths About Winning in the Aftermarket

Cailin Klein February 23, 2017 Tags: , ,
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Aftermarket sales are an afterthought for many manufacturers, which is part of the reason that independent third-party suppliers have captured most of the market.

Many companies are content letting these independent suppliers take care of their customer’s needs. There are a lot of common concerns about what it will entail to have a successful part sales strategy, which hinders manufacturers and keeps them from tapping into this high-margin business segment. Not only can these parts sales help boost a company’s overall financial health, but they can even generate more profit and revenue than original equipment sales.

To stay competitive, it’s time to change how we think about the aftermarket. Here are 10 myths about aftermarket parts sales and the reasons you should rethink those misconceptions:

10 Myths About Winning the Aftermarket Part 1 Infographic 10 Myths About Winning the Aftermarket Part 2

The Top 3 Business Trends for Manufacturers in 2017

Digabit Inc December 16, 2016 Tags: , , , , , , , , , ,
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The new year is fast approaching, which means it’s the perfect time to look ahead and start gearing up for 2017. We’re predicting that next year will continue to bring fundamental shifts to manufacturing business operations, thanks to technology.

Here are the top three business trends manufacturers should address to improve profits, drive customer retention and stay ahead of the competition in 2017.

1. The relative value of the aftermarket

Manufacturers of industrial-grade equipment have a continual revenue stream problem—it can be years or even decades before customers need to replace a full piece of machinery, and profit margins are tight on these capital equipment sales. On the other hand, selling aftermarket parts is a high-margin, long-term revenue stream.

drill machine parts

Economic studies show that spare parts and aftermarket sales comprise almost 8% of the GDP, meaning about $1 trillion is spent a year on assets that are already owned. Big money is made through ongoing sales of replacement parts and service products. Who is best positioned to sell these products, if not the OEM?

What may surprise you is that OEMs traditionally capture less than 50% of aftermarket part sales. Instead, most of this market share is captured by third party resellers, will-fitters and other suppliers.

This is a huge missed opportunity. By taking steps to increase these aftermarket sales using technology and other resources, companies can see their profits grow exponentially this upcoming year.

2. It’s time to move more sales online

The internet’s broad use by consumers and businesses has dramatically changed how people gather information and make purchases. And the expectation of equipment owners to be able to research and buy parts online is only going to continue to grow in the future.
an with credit card online shopping

Manufacturers have a unique opportunity over the next few years to streamline aftermarket sales with online parts catalogs and flexible purchasing options.

Brand loyalty may be dying in the consumer retail arena, but OEMs have a distinct advantage when it comes to enhancing the buyer experience. With access to exclusive customer data, comprehensive product knowledge, and more precise parts information, manufacturers have a head start on making a “sticky” online sales platform.

While bargain hunters will always exist, modern shoppers have proven that they will pay for convenience and quality, elements that OEMs are uniquely poised to provide.

Providing online parts sales and information is one of the quickest paths to increase revenue and customer satisfaction. The digital shift means that buyers expect real time information with immediate access. Soon (and by “soon” we mean now), a bulky paper catalog accompanied by a parts desk phone number isn’t going to cut it.

3. Internet of Things (IoT)

IoT drawing

Where do people, data and intelligent machines intersect and how is it going to change the world? According to IDC, IoT spending is expected to skyrocket in the next few years, from $656 billion in 2014, to $1.7 trillion in 2020.

And there’s a good reason for it. IoT can make services more responsive, convenient and efficient for consumers. This is true for industrial IoT (IIoT) as well. Most new heavy equipment includes telematics capabilities, with sensors installed on key systems, whether operators choose to use them or not.

Some companies are using these systems to shift asset maintenance from a preventative to predictive model. Downtime is one of the costliest variables in equipment lifecycle costs, and IoT can play a key role in diminishing it.

Instead of guessing the condition of equipment and replacing parts on a predetermined schedule, maintenance can instead be triggered by real-time conditions monitored by sensors installed in the machine. This may seem like a small change, but significant dollars can be saved by not replacing parts that don’t need it, and by optimizing downtime and reducing unplanned work stoppages.

For manufacturers, think of the benefits gained from this type of data, and how customers can be encouraged to buy aftermarket parts from an OEM. With IoT and accurate data, you can predict a customer’s needs and have parts and supplies ready and in stock. And by integrating this data into your online parts catalog, you could send the customer a reminder email with a suggested shopping cart that includes the needed parts.

This is an exciting time to be in the manufacturing business and use technology to increase customer satisfaction and revenue. By integrating streamlined aftermarket parts sales, data and online capabilities into your overall strategy, your business can jump to the next level in 2017.

Podcast: The eCommerce Opportunity

Eric Neyer July 22, 2016 Tags: , , , , , , , , , ,
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In March of 2016 Alan Sage was the featured guest on top marketing consultant Bruce McDuffee’s weekly podcast show, Manufacturing Marketing Matters.

As always, Bruce asks insightful questions and provides his own expert perspective. And Alan shares his predictions on the future of online and aftermarket sales for manufacturers who traditionally relied on dealer/distributor networks to generate orders and revenues from part sales and service.

Alan and Bruce discuss the increasing difficulty for manufacturers to maintain or increase revenues in light of global economic volatility, the proliferation of 3rd party suppliers, and greater competition from non-domestic manufacturers. The competition for aftermarket part sales has become even more challenging, with resellers on eBay, Ali Baba and other online channels vying for the same market share.

The solution is to create an effortless buying experience for online users, akin to the Amazon.com experience that private consumers have come to expect. That is, the ability to buy anywhere, any time, and have confidence that you’ll receive the right parts in a cash-register-ecommercetimely fashion.

Listen to the entire show and learn more about Alan’s actionable takeaways:

  • Manufacturers’ proprietary information (this includes parts catalogs) gives them a competitive advantage over non-OEM aftermarket providers, so figure out how to leverage this information.
  • Customers will pay more for convenience and reliability, so don’t make the mistake of trying to compete only on price when you can truly add value to a transaction.

Bruce McDuffee has proven to be an innovative voice in the world of marketing for manufacturers, applying concepts from B2C and other arenas to the unique challenges and needs of manufacturers. From content marketing to eCommerce to search engine optimization, Bruce stays on top of the latest.

If you’re a manufacturer wondering about the trend toward more transparent online B2B sales, or a marketer looking for advice on best practices for manufacturers, you’ll get something of value from this exchange of ideas.

Check out the podcast on manufacturing eCommerce today.

An Equipment Owner’s Perspective on Spare Parts

Cailin Klein June 30, 2016 Tags: , , , , , , , , , , ,
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One of Digabit’s clients is Schramm, Inc., a 115-year-old manufacturer of drilling equipment supplying the global mining, energy and water industries. Schramm builds custom rigs tailored to buyers’ specifications, which means that maintenance and repair of these unique machines requires complex coordination of the right people, with the right parts, at the right time.

Complicating matters even more, many of Schramm’s products operate in remote locales, hundreds of miles from the nearest airport or major city. Job sites like this are expensive to manage, and when equipment is idled due to a breakdown or unscheduled maintenance it can cost the equipment owner tens of thousands a day in lost productivity and labor costs.

Consider the problems posed by this scenario for a job site’s mechanics and operations manager, as they attempted to keep equipment running up to 24 hours a day:

  • Technical support materials often consisted of a generic set of manuals that did not accurately reflect the actual machinery.
  • Support documents such as illustrated parts books were delivered in print with the machine, or in PDFs on a CD, which means they were practically impossible to update when the OEM re-designed and superseded a part.
  • Depending on geography, delivery of parts could take several days and cost hundreds to thousands of dollars for express service. The consequences of ordering the wrong part were magnified manyfold, considering the immense costs related to downtime.
  • Communications with support staff in the OEM’s aftermarket organization could be difficult, making identification of the correct replacement parts a significant problem when documentation was incorrect or missing.
  • In extreme cases, the ability to rapidly deliver spare parts becomes a life-or-death affair.

This was the environment for equipment users prior to Schramm’s adoption of a digitally enhanced workflow for parts book authoring and publication.

Then Schramm adopted Documoto, a modern, relational database solution that delivers product documentation in the cloud. Documoto has unlocked massive benefits for Schramm customers:Schramm Equipment-Owner-Perspective-Spare-Parts

  • Equipment users have the ability to look up detailed diagrams of parts and assemblies, in parts books that are custom-built alongside the machinery.
  • When parts or other product data are revised by the manufacturer, customers’ electronic parts books are automatically updated within a day.
  • Because part and assembly drawings are now identical to the physical components, order accuracy increased while order processing efforts dropped.

It’s surprising to learn that many billion-dollar companies still manage aftermarket support the old way. Forward-thinking firms like Schramm—and Digabit’s other clients—have discovered a 21st-century parts catalog solution, and the benefits of 24×7 customer access to highly accurate product documentation.

5 Reasons to Use OEM Parts — And 3 Reasons Not To!

Cailin Klein April 8, 2016 Tags: , , ,
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If you work in an industry that relies on commercial vehicles, heavy equipment like drilling rigs, or other complex pieces of capital equipment, one of your biggest concerns is maximizing your machines’ uptime and minimizing your total cost of ownership (TCO).

Given those two complementary objectives, what do you do when it’s time for repairs or machine maintenance? Do you order parts made by the original equipment manufacturer (OEM) online or through the local dealer? Or do you scour eBay, Alibaba and the neighborhood Harbor Freight to find the cheapest option available?

There may be good reasons to go the economical route, but don’t make that decision lightly. Here are five reasons why you may want to stick with the original manufacturer’s parts, at least in certain situations:

1. Quality

We’re referring to fit and function here. Yes, you can find an M10 x 1.25 bolt at Home Depot, but is it made from the same material as the original? Does the thread pitch really match? This is a simplistic example, but it applies even more so in the case of complicated parts and assemblies. Have you ever gone to install a new replacement part and the holes didn’t match up? This is much less likely to happen with OEM parts designed by the manufacturer.

2. Warranty & Support

Occasionally the installation of a non-OEM part poses a threat to warranty coverage on a particular piece of equipment. If your hydraulic system fails because someone changed with fluid that doesn’t match manufacturer specifications, you may be on the hook to rebuild it yourself rather than filing a warranty claim. OEM parts themselves may also have a better guarantee than those from 3rd-party suppliers or will fitters.

Documobile parts catalogs for mobile field service

3. System Compatibility

With the increasing use of connected sensors and integrated data collection to monitor and record operating conditions, making sure related components are compatible is a primary concern. Manufacturers commonly use proprietary software to control machine-to-machine (M2M) communications, and other aftermarket suppliers may not have access to the code that makes everything work together.

4. Reliable Distribution

Large manufacturing companies have been around for years, meaning they’ve had a long time to refine their supply chains and distribution networks. While you may believe you’re saving a few hundred dollars by buying that expensive part from a “disruptive” vendor, the only thing likely to be disrupted is your work schedule when the part doesn’t show up on time.

5. Durability

A part is a part, right? Except you have no idea what’s in the alloy or plastic that the part is made from. Auto makers have spent over 100 years formulating recipes for sheet metal and coatings that resist corrosion and contribute to increased safety standards. Is that fender produced in Malaysia made of the same stuff? Nobody knows.


Why You Shouldn’t Use OEM

Of course, every rule has exceptions, and the decision to use OEM parts isn’t completely cut and dry. There are some instances where it makes sense to seek out an alternative, mostly from the perspective of reducing TCO. Here are three:

1. Similar (or Better) Quality, Lower (or Equal) Price

In some cases you can verify that a non-OEM aftermarket part at least equals the original in quality, but is simply priced lower due to the supplier’s reduced overhead or better efficiency. For certain types of applications, aftermarket parts may even be perceived as upgrades over OEM components.

2. Aftermarket Parts Made by Same Supplier

Sometimes a 3rd-party vendor actually sources parts from the same assembly line that makes the OEM parts. This can be hard to identify; however, as manufacturers usually make pains to ensure that their parts don’t carry visible markings that reveal the true maker.

3. Obsolescent Equipment

If machinery is near the end of its projected service life, it may not make sense to pay a premium for the advantages offered by OEM parts. Increased resale value will not likely recoup the additional investment required, and durability ceases to be a primary factor in the buying decision. Just find the most economical solution to get you through the busy season, and spend the money you save on a new unit!


LA Metro Increased Order Accuracy With Documoto