The world has witnessed many business activities come to a halt following the outbreak of the COVID-19 pandemic, and manufacturing operations are no exception. The shutdown of the manufacturing industry, a key sector, brought the entire economic system to near collapse.
The pandemic brought with it a massive disruption in the entire supply chain of the manufacturing industry. It affected the data, processes, and other systems across the value chain. This brought about structural and fundamental changes in the industry. However, these changes are not temporary and are likely to continue even after the pandemic comes to an end.
Several new trends have emerged in the manufacturing industry. Many manufacturers believe these trends are here to stay and shape the industry’s future in 2021 and beyond. Today, let’s examine 5 key trends that have emerged in the manufacturing sector.
1. Traditional Demand Forecasting Methods Are Rendered Obsolete
Ever since the age of industrialization, manufacturers have used conventional and manual methods to predict the demand for their products. Some of the most popular conventional approaches include using previous year’s trends and data to estimate future demand. Although these methods have worked pretty well in the past, the emergence of technology has made them obsolete. The manual methods of demand prediction are slowing down business; a study shows 76% of manufacturers feel it is time to ditch the conventional forecasting methods.
Nowadays, planning requires a quick response to market dynamics. Moreover, with larger businesses, manual forecasting methods become complex. In an era where time is money, any delay in response results in reduced profits. Manual forecasting methods are complex, time-consuming, and prone to errors. All this suggests that it is high time to find new and modern tools for demand forecasting. More and more manufacturers have started using modern tools and have moved to the cloud.
2. Digitization of Sales and Operation (S&OP) Systems
A good S&OP system can help prevent the manufacturing business from encountering business shutdowns, equipment failure, and delays. It also helps maintain the standard and quality of the products.
The COVID-19 crisis has led manufacturers to realize the importance of digitizing S&OP procedures to ensure smooth business operations. Digitization of S&OPs makes it easier to communicate with their employees and other stakeholders and ensures effective and informed decision-making.
Manufacturers who feel they are future-ready have completely digitized their S&OP procedures. A survey by Salesforce reveals manufacturing firms that have moved their sales and operations and planning to the cloud are 3.5 times more prepared to embrace the future, while those who are unprepared for the future have no presence on the cloud at all.
Some of the major benefits of digitizing sales and operations are:
Quick responses to customer needs
Optimization of overall inventory
Reduced revenue cycle and a lesser gap between the launch date and revenue.
This clearly indicates that digitization of S&OP procedures in manufacturing is the latest trend and is likely to continue over the coming decade and beyond. By going digital, manufacturers can tap into new customer segments and provide value to them using their products, which can help them increase their sales. It can also help achieve more accuracy in forecasts.
3. Cloud - The New Home to Companies
With an increasing need for faster delivery of products, while meeting the high standards of quality, it has become important to keep systems and data safe and accessible. Cloud computing is a technology that uses the internet to store valuable information and data and ensures its safety. The cloud is generally more reliable and less susceptible to technical errors. It can help you save costs, can be seamlessly scaled as per your needs, is less time-consuming, provides a competitive edge and improves efficiency with the help of smart manufacturing techniques.
A survey showed manufacturers who are ready for the future are 2.2 times more likely to move their key business operations to the cloud compared to others. Customer relationship management, demand planning, enterprise resource planning, supply chain management and financial planning system are some of the major sales and operating functions that manufacturers move to the cloud.
The benefits of cloud migration for manufacturing entities are endless, which makes cloud migration another important trend in the manufacturing industry.
4. Increasing Importance of Channel Partner Relationships
A study reveals that 94% of manufacturers who are prepared for the future also happen to be very satisfied with their channel partners and have good relations with them. On-boarding and recruiting good channel partners are critical to the success of a manufacturing business. In today’s highly competitive world, marketing through channel partners is a new trend. Investing in the infrastructure to build strong collaborations with channel partners is the smartest move you can make as a manufacturer in 2021 and the coming years.
5. Growth in Servitization
Servitization is providing after-sales services along with the sale of the product. It is highly prevalent and effective in the case of equipment manufacturing companies. Heavy machines are prone to damage and require servicing and care from time to time. In a highly competitive market, just selling the product is not enough; providing service to customers is just as important.
Servitization is a process where a company or a manufacturer adds value to the customer by selling a service through a product. For instance, Rolls-Royce’s TotalCare program provides repair and replacement services for aircraft. Servitization helps manufacturers build long-term relationships with customers, and thereby, improve revenue and increase customer retention rates.
The Salesforce study revealed around 89% of manufacturers who are prepared for the future believe that after-sales service is an essential part of creating value for the customer. This indicates that servitization is another important trend that you should look out for in the coming decade.
As you can see, these 5 trends will determine the course of the manufacturing sector in the years to come. At Solunus, we help your manufacturing business make the best use of cutting-edge, cloud-based Salesforce products to adapt to these trends and meet your revenue goals. Our rich experience gained serving manufacturing firms of various kinds coupled with a strong focus on comprehending your specific needs helps us create the best value for you.
Hope you liked this post. How do you plan to adapt to these trends? We’d love to know.
What You Can Expect by Partnering with Solunus
70% Increase in Work Order Processing Efficiencies.
60% Reduction in Manual Processing of Tasks.
360° View of Operational and Sales Data.
90% of Customer Complaints Are Resolved on the First Contact.
47% Increase in Productivity of Service Reps.
Solunus is a dedicated Salesforce partner organization, headquartered in Dallas, Texas. Our unrelenting focus on comprehending the unique needs of our clients coupled with our unrivaled expertise of the Salesforce platform enables us to deliver the perfect solutions that create the best value for manufacturing firms.