May 26 by Catherine Desedare
If you had to guess, what’s more complicated? Managing complex manufacturing of a product, or selling the products you build? In reality, both bring equal levels of complexity, especially as the world gets smaller, and the competition moves faster. But while growing manufacturing companies usually make supplier collaboration and rigor on the manufacturing floor a top priority, eliminating complexity from customer-facing processes often takes a backseat.
When it comes to manufacturing, growth and complexity go hand-in-hand, whether you’re dealing with proliferating SKUs and increasing supplier risk on the engineering side or responsible for selling to multiple channels, pricing and geographies. And if you focus only on streamlining your manufacturing process while overlooking your sales team and channel challenges, you’re seriously impeding your ability to grow, and introducing incredible risk to your business.
Three Pressures Driving Sales Challenges for Complex Manufacturing Organizations
Most manufacturers know the production challenges introduced by globalization, rising competition, and the transformation of traditional business models . . . but these same challenges make it increasingly difficult to deliver your products to customers quickly without cutting into your margins.
1. How Globalization Introduces Sales Challenges for Complex Manufacturing
- New manufacturers, innovations and products are appearing with sudden speed from unexpected quarters of the world
- The transparency introduced by the internet means customers can find the lowest price for anything quickly
- Growth opportunities now originate from developing markets—but you have to cater to the unique regional buying processes and standards of those markets to successfully enter
2. How Increased Competition Introduces Sales Challenges for Complex Manufacturing
- The market is saturated with potential suppliers; so to win contracts and projects—or retain longstanding clients—you need to offer the best prices AND the best service
- Distributors, dealers, and partners are increasingly willing to sell competing products—so it’s critical to find ways to monitor partner activities, and drive partner loyalty
- Pricing dominates purchasing decisions at the expense of functional consideration, salient benefits or brand loyalty
3. How The Growing Need for Business Transformation Introduces Sales Complexity for Manufacturers
- The business-as-a-service strategy emerges as a way to generate consistent, recurring revenue streams and ensure margins
- Greater emphasis is placed on leasing arrangements, services and outsourcing programs
- Pricing policies change from upfront charges to fees based on milestones, utilization rates or outcomes
These changes—and more—require a more sophisticated approach to manufacturing—and selling—your product lines. Identifying channel-specific sales strategies should be a standard part of your new product introduction (NPI) process to ensure that you can get products from the shop floor and to your customers (whether through an E-Commerce site, a direct rep, or a partner channel) fast.
Most manufacturing companies have realized the importance of adopting solutions like enterprise resource planning (ERP) and product lifecycle management (PLM) to bring centralized visibility to suppliers, engineers, and the manufacturing floor, but what do you have in place to streamline interactions with distributors, customers, and sales reps?
In the face of today’s challenges, configure price quote (CPQ) solutions have emerged as a way to more effectively sell complex products across multiple channels and geographies. If you’re interested in learning more about this, check out the following IDC MarketScape Report on CPQ for Manufacturing.