CRM for Manufacturing Industry
Need of CRM in Manufacturing Sector
Manufacturing along with other industries has seen a significant transformation in the last two decades. From being a distribution centric industry, it has moved towards customer centric, as inventory is losing its life span. Every month or quarter, products are changing their shape and form, all due to extreme innovation.
The automated manufacturing machinery helps with ease to change the product form and composition. The concept of “manufacturing today” and selling the same for the next 2 years is over. Lean manufacturing is about knowing what is needed in the next one week, one month, one quarter and catering accordingly. Even though the manufacturing schedule exists for the whole year, it is flexible enough to ensure changes in the last minute.
Profitability in Manufacturing Sector
There are three factors that influence in Manufacturing sector’s profitability
- Sales and Marketing Optimisation –
- Operations Optimisation
- Manufacturing Optimisation
In the above 3 factors, Operations and Manufacturing has already been fully optimised with usage of automated processes and robotics. So the only left over for manufacturing companies to improve their profitability is Sales and Marketing. In Sales and Marketing typically they share 1 : 3 in budgetary allocations. For example if a company annual budget is 1 Million USD, Marketing gets 250K and Sales and Sales Operations gets 750K USD. So the only way left for manufacturing companies is to optimise the productivity of Sales Team to influence the profitability.
So for many manufacturing companies CRM is the need of the hour for profitability improvement.
Major Sales Issues in Manufacturing Sector
Product Price Variations
The price list needs to be changed periodically as per the changes in the price of the raw material. The head office must continuously update the price list to the Sales Department, to enable them to pass on the price change to the end customers. The Sales Department needs to ensure that the Sales personnel across all regions adopt the revised price list with immediate effect.
Quotes Visibility Management
When quotes are given by the sales personnel, it is at their discretion to mark a copy head office or not. Some sales personnel might do this while others might want to send information only for selected prospects that they are sure to win, rather than all.
Head office does not have visibility on how many quotes were given to prospective customers. And no one in the company has the control on whether the customer has been informed about the price variations or the discount policies.
Daily and Weekly Reports
The daily Report and the weekly report need to be forwarded and checked as a must. If for some reason one report is missed, then the link is broken. The next report would start as a new one and historical data and comparison would become a challenge.
Information Loss when Salespeople Exit
If a sales executive or manager leaves the organisation, the information managed in silos might be lost or taken away. The knowledge transfer process becomes very tricky in such situations.
Last Minute Sales Projections
Sales personnel may project the prospect and the value of the order. But they would not be able to give accurate and detailed information on the product in daily or weekly reports. Mostly the sales person is going to project about an upcoming order only once the customer is ready to place an order. They do not feel the need for reporting all opportunities and also they will project the opportunities only after customer confirms the order.
This way the production department never plans on the projections instead they depend on last year / last month sales as the projection for next month.
This is where it becomes extremely important for the manufacturing division to know before hand what exactly is in the sales pipeline, the forecast. Traditional methods of marketing personnel, forecasting their sales while working in silos is not going to help the manufacturing division to plan. Advanced accurate forecast about the upcoming sales as per market requirements is needed by the manufacturing division. This forecast helps manage inventory and more importantly, the schedule.
Lost Order Analysis
Since salespeople do not have the habit of informing the head office about all the quotes that they have given, the lost order analysis will not reach the product team. So feedback from the sales team about which product needs to be changed etc is not based on the Data instead of the sales person’s personal opinion. Nurturing lost orders and/or fine tuning the product is not facilitated.
The issues enumerated above do not appeal to the management when the sales are good. But addressing these issues becomes key success factor when sales are going down.
When management proactively wants to maintain leadership in their domain, these issues become bottlenecks. Addressing these issues should be a priority whether a company hits roadblock or not.
CRM usage in Manufacturing Sector
CRM not only helps to address these bottlenecks but also brings in more value to the table. Customer Relationship Management now involves Sales Force Automation, Customer Support Automation and Marketing Automation components. The most important being the Sales Force Automation.
Features of Manufacturing CRM
Product Catalogue and Pricing
Traditional CRM products facilitate the products and quotes module, whereby the company can put their comprehensive product catalogue in the system. Typically the head office or the product team can put it up and maintain it. As and when a new product is launched or price of product changes, the product catalogue is updated. All sales personnel are trained on the CRM application; which is typically a web application.
The sales personnel enter product and quantity information to create a quote. As the interest level of the prospect goes the quote can be modified to include new products or changing the pricing. Since complete quote is available for modification, price changes can be approved by management.
The system facilitates sending the pre formatted quote to the customer either by an email template designed in the CRM or generating a PDF quote. The PDF quote is attached in the email to the prospect.
Obsolete Inventory and Excess Inventory Discounts
An automatic consolidation of all quotes created by sales personnel from across the regions is available in the CRM. More than anything else, the management gets to know details of the products which have been quoted to each prospect / customer. Manufacturing division can take decisions to clear their inventories from different regions.
And discounts about products can be specifically targeted to the prospects where a quotation is given by a sales person instead of advertising across the board.
At the same time analytics of which products are moving in which regions can all be looked into and future plans be drawn accordingly.
An automatic forecast will be readily available for the sales manager and a product specific forecast is also readily available for the manufacturing head. Over a period of time the company can make accurate forecasts by implementing certain processes as also by training their sales personnel accordingly.
The process of using crm quotations ensures a uniform quote given by the sales personnel across the organisation. These quotations are available to the managers and more importantly, to the head office. If and when the sales personnel leave the organisation, all the information remains intact within the system.
Product Team Field Level Feedback
When sales personnel lose some of the probable orders, the product team can analyse if a pattern exists and also get to pinpoint the problem. It can also be known if certain products are losing because of a new variant or changes implemented by a competitor. Literally, product variants can be created based on the feedback from the market instead of designing at the board room.
Customer Complaint Management
On the other side, if the customer is facing challenges with their product or delivery or any other issue, he can complain to the sales person or support member. These complaints can be tracked by assigning ticket ids or case ids and maintaining all communication together. Complaints can be analysed to deduce the problems and rectified. By avoiding future complaints company gains goodwill from customers.
Integration with Backend
Traditionally all CRM systems come with integration capabilities that help in getting the product level inventory information to CRM. This way sales person can confirm on the spot at the field about accepting an order as well as it delivery schedule.
Most of the manufacturing companies sales team is distributed across the geography. When they are on the field, a mobile application for CRM will be handy to them. Most of the CRMs have a mobile application for both android and apple iPhone with offline capabilities.
Exhibition Participation and Return on Investment
Many manufacturing companies participate in Events and Exhibitions specific to manufacturing sector to build their brand and contacts. Once participants collect contact information of their stall visitors or other company contacts, they just move on by contacting only the immediate prospective ones.
And these exhibitions are typically outside of the sales person’s city and sometimes country. And they tend to be one of the most expensive marketing activities of the company and happen year after year.
CRM comes with Campaign module that helps in capturing all the Exhibitions and Events along with the leads and contacts generated during the event. And once they are entered agains the campaign and allocated to Sales executive, the return on investment (ROI) is automatically measured over the period of time. This helps in optimising the Marketing spend as well as make the management understand the relevance of Event participation.
CRM can add significant value by helping companies to manage their customers, contacts, leads, opportunities, quotes and development, amongst other activities.
Some of the renowned companies providing CRM include SugarCRM, Salesforce, NetSuite CRM and Microsoft Dynamics CRM.
Bhea is a partner of SugarCRM from 2007 and has more than decade experience in implementing a CRM for manufacturing companies and other industries.
Contact Us for any Demo or more information.