5 min read

120 views

Why Implementing CRM is essential to the manufacturing industry

December 27, 2023

The Importance of CRM in the Manufacturing Sector

The manufacturing sector, along with other industries, has undergone a revolutionary transformation in recent years. Transitioning from a distribution-centric approach to a more customer-centric model, the second has witnessed a paradigm shift in its operations. This change has been driven by the reduction in the lifespan of inventory and the rapid evolution of products due to unprecedented levels of innovation.

In this dynamic environment, both large-scale and small-scale manufacturing companies are now recognizing the significance of integrating invocation and technology into their business processes. One of the essential technologies that have proven to be instrumental in facilitating the transformation is Customer Relationship Management (CRM).

Today CRM systems play a critical role in the manufacturing sector and CRM product companies like SugarCRM started focusing heavily on the manufacturing sector.

Lean Manufacturing is optimised to the core

Lean Manufacturing is highly optimised, and the automated manufacturing machinery facilitates each adjustment to product form and composition. The outdated practice of producing goods for the next two years is no longer applicable.

Lean Manufacturing focuses on understanding the demand for the upcoming week, month, and quarter, and adapting accordingly.

Despite the manufacturing schedule covering the entire year, it remains flexible enough to accommodate last-minute changes.

However, Lean Manufacturing no longer provides a profitability advantage for manufacturing companies.

CRM to Enhance Profitability in the Manufacturing Sector

Three key factors influence profitability in the manufacturing sector:

Marketing and Sales Optimization
Operations Optimization
Manufacturing Optimization

While Operations and Manufacturing have already been fully optimised through the use of automated processes and robotics, there is still room for improvement in Marketing and Sales.

Marketing and Sales can leverage automation and technology to enhance profitability.

Typically, budgetary allocations for Marketing and Sales follow a 1:3 ration. For instance, if a company’s annual budget for Marketing and Sales is 1 million USD, Marketing receives 250K USD, while Sales and Sales Operations gets 750K USD. Therefore the area left for manufacturing companies to boost profitability is to optimise the productivity of the Sales Team.
Hence, deploying and adopting CRM software is crucial for manufacturing companies to improve profitability in the current landscape.

Critical Sales Challenges in the Manufacturing Industry

1. Product Price Variations

Price lists must be updated promptly in response to changes in raw material prices, necessitating effective communication from the head office to the sales department and uniform adoption across regions.

2. Quotes Visibility Management

Inconsistent practices in making and sharing quotes can lead to a lack of visibility for the head office regarding quote distribution and customer communication, hindering control over pricing and discount policies.

3. Daily and Weekly Reports

Mandatory forwarding and validation of daily and weekly reports are essential due to the risk of broken links and data loss, complicating historical data access and analysis.

4. Loss of Customer Pipeline Information on Sales Person’s exit

Incomplete and delayed reporting by sales personnel results in inaccuracies in projecting upcoming orders, leading to a dependence on historical sales data for future projects instead of proactive planning by the production department.

5. Last Minute Sales Projections

Lack of comprehensive reporting by sales personnel results in a reactive approach to order projections, impending proactive planning by the production department.

6. Sales Pipeline and Forecast

Siloed forecasting by marketing personnel hinders accurate forecasting for the manufacturing division, affecting inventory management and scheduling.

7. Lost Order Analysis

Inadequate communication of quotes by sales personnel leads to a lack of comprehensive data for product feedback and lost order analysis, hindering product refinement.

8. Customer Satisfaction and Relationship Management

Seamless coordination between the sales and production teams is crucial for preempting customer dissatisfaction and fostering loyalty. Customer Relationship needs proactive issue resolution and feedback based improvements.

Addressing these issues is essential for sustained success, regardless of current sales performance.

What are the uses of CRM in the Manufacturing Sector?

The users of CRM in the manufacturing Sector are diverse and impactful. CRM not only dresses the obstacles mentioned above, but also adds significant value. In addition to addressing these challenges, Customer Relationship Management (CRM) now encompasses Sales Force Automation, Customer Support Automation, and Marketing Automation components. Of these, Sales Force Automation is the crucial aspect.

Key CRM Features for the Manufacturing Industry

Product Catalogue and Pricing

Traditional CRM systems enable the management of comprehensive product catalog and pricing with the system, typically managed by the head office or product team.

Sales personnel are trained to use the CRM application, which automatically updates product information across sales teams.

Quotation Management and PDF Quotes

Sales personnel can easily generate, modify, and send quotes to prospects through the CRM software system, with the ability to create and approve price changes.

The system supports sending pre-formatted quotes via email templates or as PDF attachments.

Obsolete Inventory and Excess Inventory Discounts

The CRM system consolidates quotes from across the regions, providing management with insights into quoted products for each prospect / customer.

This enables the manufacturing division to clear inventories and target discounts or product bundling for specific prospects.

Contact us for any CRM review or implementation needs!

Inventory Planning: The CRM system offers analytics on product movement in different regions, facilitating future planning and accurate forecasting for sales and manufacturing.
Quotation Ownership: CRM ensures uniform quoting across the organisation and retains quote information within the system, even when the sales personnel leave the organisation.
Product Team Field Level Feedback: The CRM data provides insights to the product team, enabling analysis of sales pattern and customer feedback to make informed decision about product variants and improvements.
Customer Complaint Management: The CRM system helps in tracking and analysing the complaints to identify and rectify issues, leading to improved customer satisfaction and goodwill.
Integration with Backend: CRM systems integration with backend systems to provide real-time product inventory information, enabling sales teams to confirm orders and delivery schedules on the spot.
Mobile CRM: Mobile applications for CRM with offline capabilities facilitate the sales team’s activities in the field, catering to the geographically distributed sales team in manufacturing companies.
Exhibition Participation and Return on Investment (ROI): CRM systems capture and measure ROI from participation in events and exhibitions, allowing companies to optimise their marketing spend and understand the impact of event participation.

Conclusion

CRM software systems can provide substantial value by enabling companies to consolidate the management of their customers, contacts, leads, opportunities, quotes, and development activities within a unified platform. Learn more about how CRM is reshaping the manufacturing industry and why SugarCRM is our top recommendation for Manufacturing CRM.

In the realm of Manufacturing, CRM systems serve as valuable assets for companies aiming to retain crucial clients and gain competitive advantage within the industry.