Are you a manufacturer who was considering entering the 21st century at some undefined point in the future? Thinking about initiatives like empowering customers with an easy to use automated digital CPQ process to replace your current overly complex ordering processes and modernizing and streamlining the factory floor with Industry 4.0 sensors and data analytics. If you have had a profitable business maybe it wasn’t your top priority, after all, why mess with what works? Slow and steady wins the race.
The pandemic has changed all that. COVID is transforming future goals into today’s prerequisites for survival. The pandemic, for better or worse, has turbocharged digital transformation for every type of business.
As Winston Churchill said: “Never let a good crisis go to waste.” Now is the time to introduce new paradigms and big changes. In response to the pandemic, we have seen businesses make changes in days or weeks that they thought would require years or decades. There has never been a better environment for change than now. Take advantage of it if you want to survive and thrive in the new normal.
So what does the new normal look like for manufacturers?
CPQ (Configure, Price, Quote)
83% of sales professionals are currently using some form of a CPQ system. Sales teams with CPQ solutions are having a 28% shorter sales cycle and a 105% larger average deal size. We are now beginning to see online rules-based CPQ systems that guide customers through the creation of accurate. There are two areas that can take CPQ to the next stage of development:
- Embedded CPQ: With the automated rules-based tools possible today the logical place for CPQ to start would be embedded in the background of the design process. Plugins from parts/component manufacturers to CAD design tools would enable the parts order to be built in real-time as the product is designed. The client can see the costs and availability of components during the design process. When the design is approved a parts order could be generated with one click.
- Guided CPQ: Online rules-based CPQ apps that guide clients through the ordering process and guarantee a legal order configuration, taking into account dependencies and specs can eliminate the need for engineers and sales in the ordering process. Clients can order from anywhere and the order can go straight to manufacturing or fulfillment. A seamless cloud to manufacturing or cloud to fulfillment flow opens future opportunities for more automation in the process.
The aforementioned tools not only drastically reduce the expert man-hours needed for ordering. They also eliminate the need for in-person contact and enable online remote collaboration. Faster, cheaper, and health safe… a technology hat trick that can transform your business.
Direct to Customer
According to BDO’s 2020 Middle Market Industry 4.0 Benchmarking Survey:
“65% of respondents cited improving customer experience (CX) as one of their top short-term business goals at the start of 2020. Additionally, 56% of mid-market manufacturers sell direct-to-consumer, enabling them to provide a more personalized experience while capturing insights straight from the source.”
Digital technology makes the disintermediation of the supply chain not only a possibility but a necessity. Manufacturers need a direct relationship to customers for access to the customer data that informs strategies for customer retention, new product development, and identifying new markets. A streamlined supply chain also provides customers with more competitive pricing and faster delivery.
Businesses that want to succeed in the new normal must be in full control of their customer’s digital experience and the data it yields. Taking command of your connection with your customer opens the possibility of new business models
- Subscription Services: provides the customer with lower upfront costs and the manufacturer with predictable recurring revenue
- Product as a Service: Make your product a platform. A wildly successful example is Peloton. The bike is not the product, it is the community interaction, classes, and experience that customers buy into that makes Peloton a success. The platform that Peloton has created is the primary value to the customer.
- Pay per Use: On-demand services tailored to customers on an as-needed basis. Metered usage tracking allows billing to track usage and customers to scale services in real-time.
You can expect to see new business models impacting manufacturing segments in the same way that Uber disrupted the taxi industry and AirBnB disrupted the hospitality business. This is why it is so critical that manufacturers begin the process of digital transformation and not wait to get blindsided by an industry disruptor.
Managing human interactions on the factory floor to ensure a health-safe environment has become as important as managing production during the pandemic. The sensors and data technology of the “Industrial Internet of Things” enables managers to monitor human interaction and movement, monitoring, management, and diagnosis can be performed remotely allowing for the creation of a health safe and more efficient work environment.
Online collaboration makes it possible to tap the specialized knowledge of experts, vendors, and colleagues at other sites and remote locations. Sensors in mobile devices can ensure workers keep safe distances apart. Sensors, vision systems, and robotics can automate parts of the process and augment human efforts making for a safer and more productive environment. Dashboards on mobile and desktop devices can give management and workers real-time status of everything in the production process.
The Data Revolution
These new systems of engagement and the Industry 4.0 IIoT (Industrial Internet of Things) generate a treasure trove of data that can now be mined with AI (Artificial Intelligence). Rapidly developing Machine Learning technologies are providing businesses with actionable insights that can inform changes in production processes, sales targeting, product development, and new markets. The ability to generate customer, employee, and factory floor data and rapidly process it with machine intelligence is now a key to business success.
A Historic Business Opportunity
All of these technological innovations serve multiple business needs for manufacturers. They make for a health-safe workplace, they increase productivity, safety, and quality, they deliver a better customer and employee experience and they provide manufacturers with the data intelligence and agility to respond quickly to market needs and technological disruption.
COVID has acted as a super accelerator to digital transformation. The good news is businesses of all kinds have risen to the challenge and adapted and changed in ways and at a speed, they never thought possible. There has never been a better time to embrace innovation and change.