In Manufacturing, the Customer is Always Right

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Customer-centric manufacturing isn’t just the latest industry buzzword. It’s a real shift in business strategy that puts the customer first, both on the product side and the service side. It offers a way for companies to satisfy increasing customer expectations, sell personalized products and provide top-notch customer service.

What’s behind the move toward customer-centric manufacturing?

Introduction

We are all familiar with the phrase “The customer is always right.” As smart consumers, we may be skeptical that businesses always adhere to this philosophy, but it has never been truer than in the manufacturing industry today.

Customers everywhere expect more. They expect to be able to get the products they want when they want them, configured and personalized to suit their desires, and ordered quickly from anywhere. They also demand fast and helpful customer service. In order to keep up with these rapidly changing customer expectations and compete successfully for more demanding customers, manufacturers are moving toward a customer-centric approach to allow them to provide the right products to the right customers at the right price on time.

What’s Driving the Move Toward Customer-Centric Manufacturing

There are several reasons why manufacturers are embracing customer-centric strategies.

Customer Expectations

Today’s customers expect more. The rise and popularity of Amazon.com and its imitators has helped fuel this increase in customer demand. Because of this “Amazon Effect,” people all over are now accustomed to shopping online, often on their cell phones, to quickly find and configure products to suit their individual needs and receive delivery as quickly as possible.

Because of these changing customer expectations, businesses in every industry have had to rethink their business models. They all need to sell to these savvy, digitally-aware consumers in order to remain competitive. Manufacturers are no different.

Personalization

Increased customer expectations have led to more personalization. From suppliers and partners to direct customers, manufacturing has had to move from mass producing standard products to producing a wide variety of products as quickly as possible.

The need to differentiate products goes beyond traditional cost differences. Certainly, demanding customers want the best price. But now they also want personalized products that they can configure in many different ways or they will give their business to somebody else. This is especially true for younger consumers who have grown up in the digital world and don’t know any other way.

Examples of product personalization are everywhere. Consider a private jet. The original manufacturer may build a standard aircraft body, but when it comes to the rest of the jet, customers have a variety of configuration options. Companies that sell private jets let customers configure everything online, from the floor plan, including living spaces and conference rooms, to the design scheme. Like a car, the customer can also specify the color of the plane and whether or not to have a stripe.

Compete on Customer Experience

It’s not only personalized products that customers are demanding. They are also demanding a better customer experience from the sales process all the way through to customer service. Manufacturers are seeing that their ability to provide better and new kinds of services is helping them earn the trust of their customers by improving their overall experience.

Customer service experiences have a very strong influence on how customers view a company. Think about the last time you had to contact customer service to solve a problem with a product or service. If you had a negative experience, how likely would you be to trust that company to serve your needs in the future? Probably not very likely. That company has lost your trust.

Customers expect to be able to contact customer service quickly and get their problem solved just as quickly. To meet this expectation, not only must manufacturers empower their service reps with better and more timely information to serve the customer; they also need better and more efficient ways to communicate with their customers, suppliers and partners.

Capabilities of Customer-Centric Manufacturing

So how does customer-centric manufacturing meet the competitive pressures of rising customer expectations, product personalization and improved customer experience?

Connecting People, Data and Things

At the core of customer-centric manufacturing is data. Manufacturing firms have a lot of data to manage. They have marketing and sales data, customer data, supplier data, product data, financial data, engineering and inventory data, production data, shipping and receiving data, and service data.

All this information needs to be digitally shared with the right people at the right time, both inside the company and outside with suppliers, partners and customers. According to a 2018 study by Aberdeen Group, top performing companies are 46% more likely than other companies to be able to share data with both customers and suppliers.

Making a Single Set of Data Available Across the Enterprise

Manufacturers often do have access to all this critical data but there are problems with the traditional IT strategies used to manage it.

Data is typically fragmented and disconnected between departments and functions. One department may have customer data in its CRM system while operational departments have other sets of data, and the two systems don’t talk to each other. Customer service reps may not have access to all of the information they need to serve a customer. There might be multiple sets of competing data being used and misused, resulting in lost revenue and unhappy customers.

Another factor complicating data is the Internet of Things (IoT). IoT allows devices and machines to collect a variety of data, such as status, temperature, maintenance and more. Manufacturers have to integrate this data as well.

Combining CRM and ERP

One important part of this idea of sharing data across an enterprise is the marriage between CRM and ERP systems.

Traditional IT strategies keep these systems apart. Customer and sales data is maintained in the CRM system, while manufacturing operational data is managed by an ERP system. There are several problems created as a result:

  • Inefficient processes, including manual entry in spreadsheets.
  • Sales is cut off from operations and neither group has insight into the other.
  • Multiple customer records are created.
  • Customer service can’t access all of the customer information they need.
  • Information latency, which is the amount of time it takes for data to move through the system.
  • IT departments must maintain multiple, disconnected systems.
  • Users have to learn how to use multiple systems with different user interfaces.

When CRM and ERP are integrated into a single cloud platform like Salesforce, these problems go away. A cloud-based ERP solution like Rootstock, designed and built on the Salesforce platform, integrates seamlessly with Salesforce CRM so all that front-end sales and customer data is part of the same system as the operational data.

In this kind of system, everyone has a 360-degree view of a single set of data connected across the enterprise. Sales orders are automated, customizable and fully integrated into Salesforce so that companies can track every step of the customer journey.

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Real-Time Visibility

Another advantage of customer-centric manufacturing is the ability to see the real-time status of processes, customer data and product data on a desktop computer or mobile device. This lets businesses make business decisions on-the-fly anywhere and anytime. According to the Aberdeen study, leading companies are 31% more likely to have real-time visibility into the status of all their processes and data.

Executives can view the current sales or financial status quickly and easily instead of looking at last month’s manually entered data. Workers along the entire supply chain can react instantly to resolve issues, enter data quickly, accurately fill orders faster and manage inventory more efficiently.

Advanced Analytics

Another key capability of customer-centric manufacturing is advanced analytics. Advanced analytics lets manufacturers quickly view critical information and make effective decisions to increase profits.

For example, Salesforce uses AI-augmented analytics from any data source on any device to help manufacturers uncover hidden business opportunities.

Here are some of the ways that advanced analytics helps manufacturers:

  • Monitor trends in the sales pipeline to visualize and marry supply and demand in dashboards.
  • Monitor customer buying, service and payment trends to predict future purchases
  • Operations managers can optimize performance by measuring safety and compliance, manufacturing cycles and capacity utilization.
  • Field service analytics analyzes all work orders and technician performance.

Cloud Computing

Cloud computing is another key component of the technology infrastructure of customer-centric manufacturing. With the Cloud, data and applications are hosted on a remote server, accessed by users in a web browser and maintained and updated by the software vendor.

The Cloud allows big data to be stored and accessed in real time. The Cloud provides a secure platform for sharing that all-important single set of data across the enterprise. The Cloud allows scalability; whether it’s shrinking demand, changing markets, or projected growth, manufacturers have the flexibility to scale up or down as required. The Cloud fosters mobility, enabling access from mobile devices anywhere in the world.

Cloud-based ERP software like Rootstock pulls all these benefits together so that manufacturers can implement customer-centric processes and business strategies.

Provide the Right Products to the Right Customers at the Right Price, On Time

The primary goal of customer-centric manufacturing is to provide the right products to the right customers at the right price, on time. How does customer-centric manufacturing achieve this goal?

Personalized Products

The key to being able to provide personalized products is flexibility.

Ordering Flexibility

Customer-centric manufacturing gives manufacturers the flexibility to support orders of all kinds, including non-standard orders. It also provides configure-price-quote (CPQ) flexibility in order to offer a wide variety of prices and product configurations to all those demanding customers.

Multi-Mode and Project Mode

Flexibility extends to the production side as well. Manufacturers have to support many production modes to be able to build all those personalized products. Single-product mass production just can’t do this. Customer-centric manufacturing allows companies to quickly shift between engineer-to-order, configure-to-order, build-to-order and make-to-stock products and assemblies.

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Many industries use project-based manufacturing, integrating engineering, sales, operations, procurement, materials, planning and production around a project. The flexibility of customer-centric manufacturing includes the ability to use a project-centric approach.

Operational Flexibility

Customer-centric manufacturing applies flexibility to everything on the operational side, including scheduling and capacity planning, engineering and routing, shipping and receiving, and even quality control.

BOM and routing flexibility give manufacturing the ability to design and build simple and complex products, produce new product types, and change the order of operations executed on a part. Machine flexibility allows the use of multiple machines to perform the same operation on a part, as well as the system's ability to adapt to changes in volume, capacity, or capability. Lot and serial control gives manufacturers the flexibility to adhere to ever-increasing regulatory requirements.

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Forecasting

How do manufacturing firms know which products and when to build them? With accurate forecasting and demand planning along the entire product life cycle.

Aberdeen’s study found that leading companies are nearly three times as likely to be able to perform demand planning and forecasting. Accurate forecasting requires companies to capture consistent and complete data. Customer-centric manufacturing does this.

Through real-time visibility, manufacturers not only can adjust information in real time, but they can also share information with multiple users at the same time, including management and people in the field. Sales can make changes to plans immediately instead of waiting for the next sales cycle. The supply chain team gains insight into demand and can make any required changes. Customer behavior can also be factored into forecasts by monitoring customer activities such as cases logged, late payments, returns, product age and warranty expirations.

Enhanced Customer Service

A key factor in competing on customer experience is the ability to provide customer-centric service. Manufacturers are finding new and better ways to improve customer service to increase customer loyalty and keep their customers happy.

Connecting Customers, Suppliers and Partners

Today’s customers are used to a mobile-first experience and use social media on a daily basis. These behaviors drive customer expectations for real-time, on-demand customer service interactions. They expect immediate responses on multiple channels, as well as self-service options that allow them to solve their own problems.

Companies are embracing customer-centric manufacturing to meet these expectations. Mobile, social and online communities connect customers, suppliers and partners to collapse the distance between them and provide greater insight into products, service and operations.

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Customer-Centric Service

One critical benefit of a having a single set of shared data in an enterprise is that everything about the customer is available to service reps. For example, Rootstock Cloud ERP on the Salesforce cloud platform provides complete service history for any product or component. When a customer has an issue, the customer service rep has immediate access to the complete history of the item, including modifications.

Customer-centric service also gives service reps the ability to view the customer’s order status, billing, contracts, payments and more. Waiting for a service rep to find this information makes customers unhappy but having this information instantly available is the kind of customer service that makes customers happy and buys loyalty.

Servitization

With all this data and advanced analytics, manufacturers are uncovering new sources of revenue on the service side. Instead of just selling products, companies are now selling solutions and services. This trend is called servitization.

At a Worldwide Business Research Field Service event in 2018, attended by industry leaders like FedEx and Salesforce, one of the most popular workshops focused on servitization. This is becoming a common strategy for manufacturers to improve customer satisfaction and grow profits in the manufacturing industry.

Once a product has been sold, additional services can also be sold to add value for the customers. These product-based services can include everything from extended warranties and maintenance agreements to delivery and installation to refurbishing and recycling. For example, GE’s healthcare division offers installation services for large medical devices throughout an entire hospital as well as performance maintenance and monitoring.

Companies also offer use-based services such as product leasing, renting, sharing and pooling, with short- or long-term contracts. For example, Rolls-Royce created their TotalCare package to let the manufacturing company rent airplane engines to customers, who pay only for the hours the airplane is flying.  Like the “Software as a Service” trend that revolutionized the software business, “Products as a Service” is taking hold for manufacturers and distributors.

Summary

Customer-centric manufacturing isn’t just the latest industry buzzword. It’s a real shift in business strategy that puts the customer first, both on the product side and the service side. It offers a way for companies to satisfy increasing customer expectations, sell personalized products and provide top-notch customer service.

By implementing technologies such as Cloud ERP software and advanced analytics on a robust and flexible cloud platform like Salesforce, manufacturers can win and keep the demanding customers of today’s digital world.