TRANSFORMING MANUFACTURING RELATIONSHIPS:
KEY RELATIONSHIPS CAN PROVIDE THE OPENING FOR TRANSFORMING AN ALREADY SUCCESSFUL MANUFACTURING OPERATION INTO A CUSTOMER-FOCUSED COMPANY THAT IS STRONGLY COMPETITIVE AND VIABLE FOR MANY YEARS TO COME
Controlled, predictable changes in how you manage relationships with customers and business partners can make it possible to identify and act on new opportunities and realize additional revenue.
In this ebook, we review the current state of manufacturers’ customer relationships and discuss how technology can help you improve and capitalize on them. Sikich consultants can help you achieve better returns from customer and vendor relationships and avoid vulnerabilities that could provide an opening for the competition.
MANUFACTURING CUSTOMER RELATIONSHIPS TODAY
When Sikich teams work with manufacturing companies, we see certain patterns of customer relationships over and over. Successful manufacturing companies generally excel at managing the people and processes involved with production. They also align supporting and back-office roles, such as finance and HR, with their goals for growth and efficient management. The strategic priorities of the executive team and the board of directors tend to set the agenda for those business groups and processes that focus on relationships – sales, marketing, services, and distribution. There is no question that customer relationships are essential for a thriving business. However, in actual practice they don’t always receive the strategic, holistic treatment they would deserve.
In companies that produce complex or highly customized products, the customer-facing individuals in sales, product engineering, services, and marketing usually have a deep understanding of their customers, their business challenges, and how the company’s products can help them. Often, they have to educate their colleagues and ensure that leadership and other business groups also appreciate the concerns of customers and prospects, even if they never hear their actual voices. Employees who interact with customers may use specialized marketing and sales software tools that offer up-to-date, comprehensive information on customer accounts and histories. Other business groups may not have access to the same data and might not be able to see how that lack might compromise their decisions.
In other manufacturing organizations, which produce commodity items in great quantities, the understanding of customers is often more rudimentary. These companies sometimes operate remotely from the users or beneficiaries of their products. They may even rely on third-party distribution channels or outsourced sales and service specialists to convey customer perspectives to them.
WHEN YOU LEAVE RELATIONSHIPS UNATTENDED
What are the possible risks and consequences manufacturers face when they work from a limited understanding of customers and delegate customer focus to certain business groups or even outside parties?
The most important observation is that they are likely to miss opportunities where they could serve customers. This can take many forms:
HOW CUSTOMERS EXPERIENCE A LACK OF FOCUS AND ATTENTION
From the perspective of individual customers, working with a manufacturer that does not manage relationships expertly can be unsatisfying and unproductive. For example, customers might experience the following:
DO VENDOR AND SUPPLIER ENGAGEMENTS STILL FIT THE BUSINESS?
When manufacturers find it challenging to understand and serve their customers, they may also experience other essential relationships as unproductive or difficult to manage. Such business groups as finance, sales, marketing, and the executive team may use different sets of information and a variety of software tools to direct the engagements and interactions with distributors, suppliers, and vendors. Without reliable reporting on the exact value that relationships with, for instance, global logistics companies or outsourced parts makers contribute to the business, it will be next to impossible to improve their performance. That, in turn, may make it difficult to identify which of these business partners could best support a manufacturing company that has ambitious goals for meeting customers increased expectations for quality and value.
Similar to customer relationships, whose management is too often siloed with the sales, marketing, and service groups, key vendor engagements are frequently left in the purview of operations managers, who may not even be aware of the challenges and opportunities presented by the company’s customers. In consequence, manufacturers may continue to use vendors that are no longer a best fit and which may be hard to realign if a company decides to innovate its products and enforce more demanding standards for quality, accuracy, and timeliness, or if it wants to assess and improve vendor performance based on metrics.
INDUSTRY LEADERS ARE CHANGING THE PACE
Manufacturing companies should not underestimate the visibility and influence of the still-recent innovations by prominent industry leaders. Some of these manufacturers have been successful and continued to grow because they understood better than their industry peers that investing in customer relationships can pay off and fuel the transformations that can help manufacturers thrive. In recent years, some manufacturing businesses have surrounded their products more and more with value-adding services, or recast products entirely as service offerings, also changing their revenue model in the process. Those changes would not be possible without a deep understanding of customers and the ability to align the entire organization behind the goal of creating value.
A FOUNDATION FOR MANAGING CUSTOMER RELATIONSHIPS
Some manufacturers lose important customers and face threats of reduced market share and poor competitiveness before they decide to change how they manage their relationships with customers and key business partners. Even then, they may believe that they can accomplish better outcomes with minor measures that aim to adjust employee’s attitudes and update the company culture and branding style with a stronger focus on customer value.
While reforming corporate culture plays a role in how people think and go about their work, the effort cannot be transformational and sustained if workers don’t also receive the right tools that allow them to understand and serve customers. For many manufacturing companies, that means replacing spreadsheets and specialized software products for tracking and interacting with customers and business partners with more powerful functionality that can support employees across the business groups and which can draw on financial and operational data from the company’s business management systems.
Serving customers will look different depending on whether you are a CEO, a product engineer, a finance manager, a sales rep, or a field-based services specialist. However, manufacturers need to provide their entire organization with certain capabilities. These are probably the three most important:
TECHNOLOGY TOOLS TO ENABLE HIGH-VALUE ENGAGEMENTS
Most manufacturers already own most or all of the relevant data to support transformational customer relationship management, but need to identify and deploy the tools to enable their business roles to change their practices. To avoid fragmenting the technology environment and correlate all customer information, they have to connect these tools with financial, engineering, and operational systems. Implementing and integrating the technology typically requires expertise and assistance from a technology partner with a seasoned manufacturing industry and innovation background of empowering people and organizations to create more value from their key relationships.
Customer relationship management (CRM) systems have been used for many years as discrete software products, and most current ERP systems also include CRM capabilities. In recent times, CRM solutions have expanded to help companies manage relationships with suppliers, distributors, investors, analysts and other external stakeholders in addition to customers. The once-popular XRM acronym, which meant to imply management of various relationships, has largely disappeared.
Today’s leading CRM solutions, including Salesforce, NetSuite, and Microsoft Dynamics, can be implemented in the cloud and configured to give the right level of secure access to customer data for people in different business rolesâ€”sales, marketing, service, executives, and others. For mobile employees in the field, customer-facing teams at company locations, and business users in marketing, finance, or business leadership, they are equally fast to learn and easy to use.
These solutions can serve as comprehensive, centralized repositories for all information, communications, activities, and documents associated with individual customers or customer segments. They come with analytical capabilities that manufacturers can configure to reflect their KPIs and other metrics. Standard integrations with IoT analytics and other business insight tools as well as manufacturers’ engineering, production, service management, and other systems are robust and can be efficiently managed in the cloud.
WHAT COULD TRANSFORMATIONAL CRM MEAN FOR A MANUFACTURER?
If you aim for a cultural or values transformation and want to re-orient your teams to focus on customers and delivering value, that effort can become successful and measurable when you provide people with the CRM tools and data to be effective in understanding and serving customers. As soon as the software is implemented, you can advance the transformation of how you manage the relationships with customers and business partners. A number of advancements can then become possible:
REALIGNING VENDOR RELATIONSHIPS
Most businesses prefer to work with fewer vendors, not more. Some manufacturers outsource installations, scheduled maintenance, warranty management, repairs, and upgrades of their products to third parties and prefer to focus on what they feel they’re best at — creating and producing valuable, competitive products. For customers, that may be a minor concern if everything goes well, but it can be worrisome and wasteful when it does not. Often, important details are lost in the hand-over from the manufacturing company to these service providers, and a quick recovery or correction may be necessary to maintain the quality of the customer experience. Commodity and mass manufacturers sometimes disregard this element of the business, also because customer relationships may be mediated for them through third parties.
Deploying a powerful CRM solution makes it possible to reset your relationships with outsource service providers. You can take two main directions in accomplishing this:
SIKICH AS YOUR RELATIONSHIP TRANSFORMATION PARTNER
Today’s CRM systems offer a wealth of foundational and advanced capabilities, and their manageability and usability are superior to what business software tools were like even just a few years ago. Many sound choices are available, and manufacturers have to determine which is the best fit for them. Even thorough research, in-depth demos, and vendor reviews may not always generate the confidence to take the next step. Thatâ€™s when a technology partner like Sikich can simplify your decision-making and create a CRM environment that fits your company.
Sikich often collaborates with manufacturing companies which have realized that there is unrealized potential in their relationships with customers and key business partners. We understand the manufacturing industry and its challenges. Sikich manufacturing practice members have developed their careers in the industry before they joined us.
As industry participants, we know how challenging it can be when manufacturers aim to maintain and grow their businesses while competitors nibble at their market share and margins are under the threat of erosion. We also see that many manufacturers hope to benefit from digital transformation and Industry 4.0 initiatives, but shy away from the high risk and cost that can be associated with these efforts. Focusing on customer relationships, a core value-creating element of your business, can make it possible to control transformation, align it with tangible goals, and minimize its risks.
TECHNOLOGY AND MANUFACTURING EXPERTISE TO POWER CONTROLLED TRANSFORMATION
Sikich alliances include such leading providers of CRM solutions as Salesforce, NetSuite, and Microsoft Dynamics. We know the technologies inside out, and have many opportunities to contribute the voice of our customers to their continuing development. In successful projects for hundreds of manufacturers and thousands of clients, we have refined the art of helping our clients manage organizational, process, and technical change in the least disruptive and most efficient manner possible. We continuously update and evolve our implementation methodology, Sikich HeadStart, which follows industry-best practices in a low-risk, outcome-oriented approach to deploying software. You can count on us to provide knowledgeable guidance when you need to integrate CRM with ERP or other business systems or when you want to ensure a streamlined, predictable, productive move to the cloud.
COLLABORATIVE, EMPATHETIC PROFESSIONALS WHO SPEAK YOUR LANGUAGE
We often hear from clients that their Sikich consultants, deployment teams, technologists, and support groups operate from a level of professional empathy that they have not seen elsewhere. We keep your goals and transformational opportunities top-of-mind, no matter whether we help you deploy your CRM solution for all the users in the company or if we troubleshoot and resolve a seemingly tiny issue in how well business software works for you.