Manufacturing Sales Handbook

Manufacturing Sales Handbook

Everything you need to know about selling in the manufacturing industry

Contents Understanding manufacturing sales 3

What makes manufacturing sales complex? 4

Evolving market challenges for manufacturers 6

Five industries that use advanced manufacturing sales 8

5+1 types of manufacturing that defines sales 12

Risk breakdown of manufacturing models 20

Manufacturing distribution models in B2B 24

Manufacturing sales software solutions 27

Customer centricity in manufacturing sales 34

Conclusion 36

2 | Contents inmindcloud com

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Understanding manufacturing sales Manufacturing sales occur when a manufacturer sells the finished product they have created from raw materials or components. Well, that used to be an appropriate definition pre-Industry 4.0, pre-digitalization, and pre-consumerization.

These days, manufacturing sales must do more than ‘pick up the phone and make the sale’ due to some powerful factors:

• 24/7 online sales are becoming the norm in the manufacturing industry.

• Smart manufacturing methods have the potential to drive rapid innovation across all verticals.

• Market competition means other manufacturers are making every effort to adapt to B2C expectation levels.

Ask any manufacturer what they think of manufacturing sales, and the answer will likely be one word: Complex.

Smart manufacturing methods drive rapid innovation across all verticals.

inmindcloud com3 | What is manufacturing sales?



C-Level Purchasing Supply Chain Production Finance Marketing Sales

ServiceOperationsEngineering Production

FulfillmentOrderTenderNeed

Budget

Pain

Presentations

Research

Short-ListsTender

Quote

Email

Award

Clarifications

Distributors

Order Status&Delivery

Service

Upgrade

Customer Visits

Portal

Retention After-Sales

FinanceMarketing Sales

BU

YER

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LLE

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THE B2B BUYING AND SELLING JOURNEY IN MANUFACTURING IS COMPLEX

What makes manufacturing sales complex?Business-to-consumer (B2C) sales are relatively straightforward compared to the business-to-business (B2B) space where manufacturing lives.

For example, when buying a Tesla, the B2C process is relatively straightforward. It involves one (or very few) decision-makers, is driven by personal expectations, and is purchased for a known and comparatively small price. Sure, you can make customizations on their website, but these are limited in scope and easily priced.

In the second case, a business buying a product—Tesla in our previous example—looks for manufacturers that meet their technical requirements for a specific or custom vehicle component. They then start a selection process that involves multiple suppliers submitting their proposals through an RFQ process. A lot of work must be done before a sale can even be considered.

inmindcloud com4 | What makes manufacturing sales complex?



Various stakeholders from Tesla might be involved in the requirements-setting, budgeting, and research process.

Meanwhile, suppliers need to engage in a series of tasks. Beginning with gathering requirements and using the information gathered to begin design, engineering, calculations, part configurations, material and production simulations, pricing, and ultimately creating a tender document.

The manufacturing sales process involves more than salespeople — including engineers, material and production experts, procurement, and middle-management decision-makers. The quoting process alone can take several weeks and incur a high cost to the company, with no guarantees that the contract will proceed.

At this point, we have not even painted a complete picture of this journey. Often, negotiations or corrections can easily send this process into a repeat loop before the customer even buys. And when the buying business makes the final order, another set of complexities come into play. Factors such as labor dynamics, material costs, or unforeseen production circumstances could threaten the successful delivery of the product or manufacturing solution.

You can conclude that in B2B manufacturing sales, the buying journey and the selling process are a winding path of multiple dependencies. It involves many stakeholders (6-10) and carries significant risk from errors or delays for both the buying business and the manufacturer.

Having a complicated buying process in the manufacturing industry was accepted as the norm. But research has shown that B2B enterprises, like manufacturers, need to overcome it to recover during economic downturns.

Having a complicated buying process in the manufacturing industry was accepted as the norm.

5 | What makes manufacturing sales complex? inmindcloud com



Evolving market challenges for manufacturersAdding to the complexities of the B2B sales process, manufacturers are faced with four main market challenges that force them to re-think their sales and even business models:

Industry 4.0 and smart factories transforming

manufacturing vs. siloed data.

INDUSTRY 4.0 AND OPPORTUNITIES04MARKET

VOLATILITY03CUSTOMER EXPECTATIONS02GLOBAL

COMPETITION01

Graphic 2 – Evolving market challenges for manufacturers

Graphic 3 – Sales challenges in each manufacturing sub-vertical

Rising pressure of long sales cycles

on profitability and customer experience.

B2B customers increasingly expect B2C experiences for customized products

and innovations.

Globalized markets with universal

competition and tightening margins.

1 Global competition

Globalization is not a new challenge for manufacturers. But with the rise of digital opportunities, manufacturers across the globe can sell and market to the same customers. The digital economy is giving manufacturers a more extended reach than ever before. Local manufacturers now have to compete against manufacturers based in other parts of the world. With competition intensifying, already slim margins are expected to tighten even more.

EVOLVING MARKET CHALLENGES FOR MANUFACTURERS

6 | Evolving market challenges for manufacturers inmindcloud com



2 Customer expectations

B2B decision-makers demand a seamless and smooth customer experience that mirrors their experiences with purchasing consumer goods. They want matching service offers, convenient purchasing, and self-service models, and at the very least, high responsiveness and better customer service. In addition, they expect customization for already complex products and solutions.

3 Market volatility

Manufacturers traditionally struggle with market volatility. Factors such as raw material prices, labor costs, or political changes can affect their supply chains and sales markets. Global economic fluctuations can impact a less agile industry, such as manufacturing, disproportionally harder than other sectors.

4 Industry 4 0 opportunities

The fourth industrial revolution has opened new horizons for manufacturers. They now have access to technology that can transform their productivity, speed, and flexibility. Emerging technology like cyber-physical production systems (CPPSs), Industrial Internet of Things (IIoT), Assisted Intelligence, and Cloud Computing helps manufacturers build smarter factories.

One of the primary opportunities arising is the cost-efficient production of mass-customized products in a lot size of one. The challenge, however, is that manufacturers might not be agile enough to adopt these new technologies and lack clear strategies to implement emerging technology successfully.

What do manufacturing market leaders do? Leading manufacturers today have developed technology-based strategies that help them stay ahead. They overcome market challenges by constantly adapting how they sell and operate their business to solidify their market position and mitigate the risk of revenue loss.

7 | Evolving market challenges for manufacturers inmindcloud com



Graphic 3 – Sales challenges in each manufacturing sub-vertical

Graphic 4 – Supplier Pyramid in the Automotive Industry

MEDTECH & HIGH TECHNOLOGY

Complex production & sales

Competitive market

High costs of operations

STEEL & METAL

Volatile raw material prices

Decelerating global demand

Diverse customer requirements

MACHINERY & EQUIPMENT

Rising global competition

Hardware commoditization

Constant price pressure

ELECTRICAL EQUIPMENT

Dependant on operational efficiency

Subject to economies of scale

Technological expertise

AUTOMOTIVE & SUPPLIERS

Short innovation cycles

Shrinking margins

Long contract duration

Five industries that use advanced manufacturing sales

SALES CHALLENGES IN MANUFACTURING VERTICALS

As manufacturing becomes increasingly complex, we need to simplify the sales process.

In manufacturing, each sub-vertical has a typical way of operating. The differences can be found in the way manufacturers use labor, machines, tools, and chemical or biological processing. Understanding the differences can help manufacturers look for strategies to cope with market challenges or sales complexities.

8 | Five industries that use advanced manufacturing sales inmindcloud com



Medtech & high technology

The medical device and technology industry (in short, medtech) covers medical instruments and equipment used for diagnostics, monitoring, and therapeutics. Medical device manufacturers produce surgical instruments, diagnostics apparatus such as ultrasound instruments, and medical devices like pacemakers. Technologies such as 3D imaging, additive manufacturing, coatings and surface treatments, micromanufacturing, and even nanotechnology come into play.

The high-tech manufacturing industry produces cutting-edge technology products from computers to plane engines. Advanced machinery is used to manufacture components and parts (such as semiconductors and circuit boards). Processes such as forming, casting, molding, and laser engineering are used.

Sales in these industries are characterized by a high complexity in; production and sales, a competitive market landscape, and high costs. Manufacturers in these sub-verticals focus on supply chain efficiency and demonstrate high agility –while keeping costs and inventory levels low.

Industry Spotlight

Increasing market share through expanding a global sales force and distribution networks is a significant challenge for medtech and high-tech businesses.




Steel & Metal

The steel and metals production industry uses various raw metals to fabricate structures, machines, tools, and parts. Value-added processes include welding, cutting, forming, metal stamping, forging, casting, and machining, all of which require engineering designs. This industry struggles with volatile raw material prices and a general slowdown in demand. As a result, steel and metal manufacturers take extra care in aligning supply and demand while keeping track of their highly diverse customer requirements.

Machinery & Equipment

Industrial machinery and equipment manufacturers design, fabricate and assemble various products. These products can range from small-scale machines to industrial components or tools. Buyers are from sectors such as agriculture, construction, mining, aviation and aerospace, defense, and maritime. Machinery and equipment manufacturers also serve other verticals that require industrial equipment like robotics and pumps.

This industry primarily deals with rising global competition and commoditization of hardware which causes massive price pressure

Electrical Equipment

The electrical equipment and electrical components industry manufacture products that generate, distribute, or use electrical power. Products include batteries, sensors, electrical wiring, lighting equipment or motors, generators, and transformers. This industry depends on efficient operations, economies of scale in purchasing materials and production, and of course, technological expertise. In addition, manufacturers in this vertical seek to balance costs versus customer requirements and short innovation cycles—while keeping a close eye on margins.

Automotive & Suppliers

The automotive industry is a significant economic global force that designs, develops, and manufactures motor vehicles. Auto parts and components manufacturers are suppliers for the automotive industry. They produce components that become part of the automobile, such as brakes, suspension, steering systems, engine parts, safety management, climate control equipment, engine cooling, exhaust systems, and interior and cockpit modules.

Industry Spotlight




Automotive supply manufacturers can be classified in tiers 1-3 in a supplier pyramid depending on the hierarchical order (tier 1 supplies directly to the manufacturer). The entire industry is transforming at lightning speed, resulting in shorter innovation cycles. Suppliers are facing massive price pressure through global competition and volatile material costs. At the same time, suppliers in the industry usually commit to multi-year contracts. Their focus must be on margins, successful international sales, and new business opportunities in digital channels.

Tier 2: Uses materials and parts to manufacture individual components for

automotive supplers, e.g. car door handles

Automotive manufacturer: Assembles the entire automobileOEM

SYSTEM SUPPLIERS

SUPPLIERS FOR INDIVIDUAL COMPONENTS

SUPPLIERS FOR SINGLE PARTS AND RAW MATERIALS

Tier 1: Supplier of R&D services, and production of complete systems, e.g.

steering system or climate control equipment

Tier 3: Manufactures and supplies individual parts or raw materials that would be made into components by tier 1 and tier 2 manufacturers.

Make-to-Stock MTS

Graphic 4 – Supplier Pyramid in the Automotive Industry

The exponential speed at which the market is evolving puts those who wait further and further behind.

SUPPLIER PYRAMID IN THE AUTOMOTIVE INDUSTRY

Industry Spotlight




By now, you have learned that manufacturing sales strategies are dependent on market conditions and can be influenced by industry-specific factors. Another factor determining how manufacturers sell is the manufacturing system or type used to produce their products. Finally, various business models are developed to balance out the production costs while meeting customers’ demands.

5+1 types of manufacturing that define sales

12 | 5+1 types of manufacturing that defines sales inmindcloud com



1 Make-to-stock (MTS)

Business characteristics of MTS

This method is used by factories that produce commodities that are then stocked in warehouses or stored in showrooms. Manufacturers that found success with this business model understand that demand must be somewhat predictable and precisely forecasted. That is because the manufacturer expends capital to produce goods in advance. The capital then ends up bound in the finished goods until they are sold.

In MTS, the Sales Order does not drive the production program, but the predicted demand does. Incoming orders will use existing inventory which is then delivered, which keeps the lead time low. When a manufacturer overproduces goods, they often apply aggressive discounts that eat into their margins to sell their goods and avoid writing them off.

Underproduction means some market demand remains unserved, which gives competitors a chance to steal market share. In the case of MTS manufacturers, the complexity of sales lies in forecasting demand before production.

Make-to-Stock MTS

DELIVERY TIME

CHANGE IMPACT

ENGINEERING COST

DEVELOPMENT INVESTMENT

FAST

HIGH

LOW LOW

Manufacturing-to-Order MTO




2 Make-to-order (MTO)

Business characteristics of MTO

In MTO businesses, standard products with clearly defined specifications are manufactured and sold when orders are received. In this model, inventories are easily managed, and the risk of overproducing is eliminated as market demands are clear. But in today’s consumerized B2B world, customers are increasingly becoming impatient. They don’t want to wait for their products to be produced.

Also, economies of scale in mass production is rarely applicable. Manufacturers cannot guarantee a steady stream of orders, so production costs and prices are likely higher due to low quantities. Plus, manufacturers in MTO cannot plan the ideal utilization of a production line and schedule.

All too often, this results in accepting low-margin orders to utilize the line.

In recent years, however, Industry 4.0 technologies such as additive manufacturing (3D printing) are helping MTO businesses produce goods in lower quantities at lower costs. The industry term is “lot size of one,” where an MTO can produce a single product at the lowest possible cost.

Demand for customization in MTO is also on the rise. However, it is incredibly complex to sell. Cost calculations need to be immaculate for MTO businesses to achieve profitability.

Assemble-to-Order ATO

Manufacturing-to-Order MTO

MEDIUM

HIGH

LOW LOW

DELIVERY TIME

CHANGE IMPACT

ENGINEERING COST





3 Make-to-assemble (MTA)/Assemble-to-order (ATO)

Business characteristics of MTA/ATO

Make-to-assemble or assemble-to-order is a hybrid between make-to-stock and make- to-order. The manufacturer will produce components or parts in anticipation of orders for assembly. They will then decide at which position in the Bill of Material (BOM) the material is kept in stock, readily available for processing.

While the manufacturer is ready to fulfill customer orders instantly, he can also be left with unwanted parts or components when demand is low. Availability checks and lead times for these components need to be carefully considered. In general, ATO gives some flexibility, allows for speed in fulfilling market demands, and helps reduce waste, which leads to a lean and agile production model.

Assemble-to-Order ATO

MEDIUM MEDIUM

LOW LOW

DELIVERY TIME

CHANGE IMPACT

ENGINEERING COST





4 Configure-to-order (CTO)

Business characteristics of CTO

Configure-to-order is a hybrid of make-to-stock and make-to-order. In CTO manufacturing, products are assembled and configured according to customer requirements. The standard subassemblies are made to stock and must be immediately available at a well-predicted inventory level to quickly fulfil customer orders. The final assembly is postponed until the order comes in, which helps manufacturers remain flexible enough to offer high product variety.

Just as in MTO, this model helps manufacturers cope in today’s competitive markets where tailored products with unique requirements are in high demand. The CTO system enables both mass customization and fast response time in order fulfillment. In CTO manufacturing sales, the complexity lies in the configuration. End-product standards are predefined but must be flexible enough to allow viable configuration.

Some manufacturers will define a material master record number for each variation of the standard product, or they use variant configuration models.

Configure-to-Order CTO

DELIVERY TIME

CHANGE IMPACT

ENGINEERING COST


HIGH

LOW LOW

MEDIUM

Engineer-to-Order ETO




5 Engineer-to-order (ETO)

Business characteristics of ETO

Engineer-to-order is a manufacturing system that is often used for very complex or specialized products. The project starts once an order is received, which kicks off a long design, engineering, and production timeline. The final products or solutions, as well as subassemblies and components, are engineered (or customized) by the manufacturer according to the customer’s specifications—meaning they have never been built before.

ETO manufacturing requires high subject matter expertise, meticulous requirements, engineering analysis, and high design effort. The costs tied to these requirements are high because of human resources needed and must be maintained even before a customer orders. Projects and work breakdown structures are used to manage procurement processes and dependencies during the extended lead-time.

Manufacturing-as-a-Service MaaS

Engineer-to-Order ETO

DELIVERY TIME

CHANGE IMPACT

ENGINEERING COST


HIGH SLOW

LOW

MEDIUM




+1 Manufacturing-as-a-Service (MaaS)Manufacturing-as-a-Service MaaS

DELIVERY TIME

CHANGE IMPACT

ENGINEERING COST


LOW LOWLOWFAST

Business characteristics of MaaS

Manufacturing-as-a-service is a service-oriented business model that exists since pre-industrial times when farmers brought their wheat to the mill to get flour. It is based on sharing manufacturing infrastructure to reduce costs and make better products.

In practice, customers define what needs to be made, and the manufacturer makes it. However, with the availability of Industry 4.0 digital technology (IIoT, additive-manufacturing, connectivity, big data, and cloud computing), MaaS becomes a highly flexible model that can produce faster, cheaper, and in any quantity while keeping resource consumption under tight control.

MaaS becomes a highly flexible model that can produce faster, cheaper, and in any quantity while keeping resource consumption under tight control.




On the other hand, MaaS is highly dependent on streamlined and reliable supply chains. In the MaaS system, Original Equipment Manufacturers (OEMs) effectively sell their process expertise. Therefore, it requires a fully digitalized and connected production and total transparency into their processes and costs.

Different manufacturing complexities

As you can see, each manufacturing industry is tied to supply and demand. Manufacturers choose to meet demand via different models—and are subject to the risks and complexity of each model. A successful manufacturing business requires sales strategies that consider supply chain, stock management, production, design, engineering costs, and quality control.

A successful manufacturing business requires sales strategies that consider supply chain, stock management, production, design, engineering costs, and quality control.




Risk breakdown of manufacturing modelsThere are five key risks that businesses must contend with within the manufacturing industry. Depending on the manufacturer’s model, some risks are more apparent and will shape a manufacturing firm’s sales strategy.

Time needed to deliver products

Delivery time is an important point for customers and a key differentiator for manufacturing businesses. Some manufacturers choose the make-to-stock route, which shortens the delivery time to the bare minimum.

At the opposite end of the spectrum, you have the engineer-to-order route. Manufacturers who choose this route offer maximum customization, but the finished product can only be produced and delivered after their customers define what the finished product should be like. This can take up to several months.

All of the other models—MTO, ATO, and CTO—lie somewhere in between. They offer some customization but have already produced most of the final product. This customization allows manufacturers to offer a reasonable delivery time and some customization.

However, emerging digital technologies can give manufacturers access to models that have far fewer compromises. Manufacturing-as-a-service is one of these models. With MaaS, manufactures can produce fast, customize fast, and deliver fast.

20 | Risk breakdown of manufacturing models inmindcloud com



Agility and the impact of change

The ability to offer customization is a competitive advantage for manufacturers. With the make-to-stock model, small changes can result in a big impact on the business.

That’s because MTS businesses are fine-tuned to produce goods that go straight to the warehouse. Changes to a particular product can result in the finished products becoming immediately obsolete (or even worthless).

At the opposite end of this spectrum, you have ATO and CTO models that are built to accommodate rapid changes in product design. For ETO models, changes only affect the design aspect and not the production aspect of the manufacturing process, so the impact is minimal on the final product.

How does agility affect sales?

Selling customization is a complex process that involves engineering, design, configuration, and costing. The accuracy of these calculations will be reflected in the margins of every single deal. Being able to offer something that has not been built before also requires powerful visualization and quoting tools.

How do timeframes affect sales?

Estimating realistic and accurate delivery time promises in quotes or online sales ultimately affects the customers’ decision to buy. It’s all the more true for manufacturing models with high customizing, design, and engineering efforts where cycle times depend on tight project management and a lean approval process. Overpromising delivery times could result in unhappy customers and a disrupted relationship.

21 | Risk breakdown of manufacturing models inmindcloud com



Cost of engineering incurred & risk of design error

All manufacturing companies will incur engineering costs. However, for manufacturers using the ETO model, engineering costs are a large part of their business. Each time an ETO project is initiated, the manufacturer’s engineering team designs the product or solution at a significant cost.

For all other models, engineering costs are incurred at the initial design phase. Thus, they are one-off, upfront investment costs and will not recur until the product reaches end-of-life.

The risk of design error is also heavily tied to how much engineering costs are incurred. The more engineering a product requires, the bigger the impact an error can have on the business. Manufacturers that use the ETO model are more vulnerable to the risk of design error than the other models.

How does the ETO model affect sales?

Engineering designs will always have to be reviewed by the customer to ensure the final product meets all requirements. Of course, it also needs to be technically viable, material and components need to be available, and production capabilities should comply. This requires a streamlined workflow with adequate approval processes and collaborative quote versioning. All reconfigurations and recalculations in the process have to be based on real-time production data information, and designs should be made available in the format of choice—in 2D or 3D.

22 | Cost of engineering incurred & risk of design error inmindcloud com



Investment needed in development

Before manufacturers start production, they need to invest in building the infrastructure. Next, they would need to invest in the development process. For some models, the development process can be significant.

For example, in the configure-to-order model, manufacturers would need to develop the base products, the variations, and finally, the configuration process. For this model, the investment needed to develop the entire process is the highest. For assemble-to-order, the costs are lower because the base products are already manufactured.

For MTS and MTO models, the investment is incurred at the start. Once the business is running, there is very little need for further investment into development. For ETO, the manufacturing process only starts when the customer makes an order.

How does it affect sales?

Accuracy is key in the calculation of development costs that will later go into the price of a product or solution. For ETO projects with high development costs, it is all the more important to be transparent. Customers are more likely to accept a higher price for services that are fully justified and explained in detailed quotes or online offers, and which are underpinned by a great customer experience.

Costs and risks in manufacturing typically increase with the level of complexity in engineering and design. Manufacturers are starting to discover how digital technology can help by:

Managing risks using digital technology

• Automating time-consuming activities

• Streamlining mission-critical activities like workflows & approvals

• Eliminating calculation errors for costs and prices

• Ensuring only viable configurations and combinations of products, components, and manufacturing processes

• Guaranteeing consistent management of data

• Digitizing complex engineering models

23 | Investment needed in development inmindcloud com



Manufacturing distribution models in B2B A distribution channel is a path the manufacturer uses to deliver its products or service to the customer. The route can be as short as a direct interaction between the manufacturer and the buyer. It can also include several interconnected intermediaries like wholesalers, distributors, retailers, etc.

Wholesalers Distributors Partners

MANUFACTURER

Graphic 11 – Manufacturing distribution models

Partner assumes responsibility of marketing and sales while increasing reach

Reduced control over brand & customer experience, distributor and partner management needed, lower profit per unit sold

+-

Complete control over costs, marketing, sales, and shipping, higher margins

Business growth is limited by distribution limits

+-

INDIRECT SALES

DIRECT SALES

CUSTOMER

CUSTOMER CUSTOMER

For manufacturers, it is vital to have a mix of distribution channels that a) complement their manufacturing type, b) create high availability for buyers and in target markets, and c) keep the cost of sales in check.

HOW MANUFACTURERS DISTRIBUTE

24 | Manufacturing distribution models in B2B inmindcloud com



Direct sales (manufacturer to B2B customer)

In direct sales, no intermediaries are involved. The manufacturer or producer sells directly to its B2B customer. For example, a manufacturer of ophthalmic machines sells directly to an optics lab that uses it to produce spectacle lenses.

ADVANTAGE Direct selling is an excellent way to manage costs as the manufacturer has complete control over marketing, sales, and shipping. However, manufacturers are also increasingly setting up online stores to meet customer demands for self-service buying in B2B environments. Other channels could be B2B fairs and traveling sales representatives.

LIMITATION However, as the business grows, so does its distribution needs. To reach a larger consumer base or new markets, manufacturers might sell through intermediaries.

Indirect sales: distributor or partner sales

In indirect sales, manufacturers build up a network of partners, wholesalers, and retailers to meet business goals such as:

• Faster expansion

• Increasing brand recognition in larger sales networks

• Outsourcing sales operations costs

• Gaining access to new groups of customers or new market segments.

25 | Direct sales (manufacturer to B2B customer) inmindcloud com



In general, a wholesale buyer will stock large quantities of the manufacturer’s products and sell them to further intermediaries in smaller amounts for a profit. Retailers, on the other hand, are store owners that sell the products to their customers directly.

ADVANTAGE Partner sales is an option when commercial knowledge in regions or languages is beneficial towards the sale of goods. The manufacturer outsources the marketing and sales processes, but shipping remains in the manufacturer’s hands.

LIMITATION Indirect distribution models come with certain risks like:

• A general lack of managerial control

• Lower profit per unit sold

• Channel competition

• Increased need for coordination during the introduction of new products or implementation of changes

• Higher effort in brand maintenance

• And of course, the extra step of managing the sales network relationship

26 | Direct sales (manufacturer to B2B customer) inmindcloud com



The manufacturing world is changing faster than ever before, and manufacturers need to adapt their selling methods to meet their business goals. The tools in use vary in effectiveness, efficiency, and future viability.

Traditional industrial sales processes & software

Manual tasks and siloed operations are the characteristics of a traditional manufacturing sales process. However, regardless of the type of manufacturing, the manufacturer’s offer—also called quotation, RFQ (request for quote), RFI (request for information), or tender—always starts the seller-buyer relationship.

It often contains the details of the product, service, or solution requested. Its level of complexity depends on the type of manufacturing the product needs. In essence, it is a critical part of the manufacturing sales process, as it also sets the margins and can determine a deal’s profitability.

Traditional sales methods rely on manual extraction of sales relevant data from sources such as the ERP (Enterprise Resource Planning) system or product catalogs. This data is then processed through tools such as Excel to calculate costs, configure products or solutions and create offers.

Manufacturing sales software solutions

27 | Manufacturing sales software solutions inmindcloud com



Traditional manual processes are slow, lack accuracy, and are prone to human or system error — especially for more complex manufacturing types such as CTO, ETO, and MaaS.

In addition, hundreds of dependencies, product variations, and cost factors require up-to-date information that cannot be guaranteed without connectivity. In addition, quotes often require input from various specialist departments, and final quotes need reviews and approvals. Errors and misalignment can send the entire process into a repeat loop.

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SALES JOURNEY

START

PRODUCTION

Sales-relevant data is stored in a manufacturer’s ERP

LEAD

FULFILMENTAFTERSALES/

RE-CONTRACTING

CRITICALPATH

The outcome of such a manual process is inadequate in terms of quality, margins, sales cycle time, and cost of sales. It is also not sustainable in highly competitive markets with demanding customers.

TRADITIONAL MANUFACTURING SALES JOURNEY




Digital sales software solutions: CRM, CPQ, Commerce

Over the years, manufacturers have acquired or custom-developed solutions that could deal with complexity in the RFQ and quotation process. Many are stuck with on-premise software to configure, price, and quote (CPQ) manufacturing products and solutions were implemented to fit very individualized IT landscapes.

With the rise of cloud computing and affordable internet around the globe, new solutions entered the market. The most relevant cloud software solutions for manufacturing sales are Customer Relationship Software (CRM), CPQ, and E-Commerce systems.

The role of the ERP in manufacturing sales

For manufacturers, the actual value of the before-mentioned software solutions comes into play when all software solutions are running on one platform and are deeply integrated with the manufacturer’s Enterprise Resource Planning system (ERP).

Sales-relevant data is stored in a manufacturer’s ERP

Products

Raw materials

Engineering knowledge

Configuration models

Costs

Inventory levels

Prices

Account discounts

Orders and purchases

Shipping

Taxes

Deliver schedule

Region and sales channelspecific calculation schemes

MANUFACTURER’S ERP




The ERP is at the heart of all manufacturing processes, and it houses:

• Product data,

• Raw material information,

• Engineering knowledge,

• Configuration models (e.g., LO-VC model)

• Costs and prices,

• Price lists, variant prices, account discounts,

• Shipping costs and taxes,

• Status of business commitments such as orders and purchases,

• Stock availabilities and delivery times,

• Region and sales channel specific calculation schemes

Years of work and evolving production knowledge are saved in a manufacturer’s ERP. A digital sales solution needs to make effective use of this knowledge and back-sync for real-time data consistency.

Manufacturers looking to accelerate manufacturing sales can use a digital sales platform to connect all data sources, process steps, stakeholders and distribution channels involved—building a seamless end-to-end process.

Sales-relevant data is stored in a manufacturer’s ERP.




INDIRECT SALES

DIRECT SALES

MANUFACTURER

Graphic 15 – A Digital Sales Platform makes ERP data ready all sales channels

ERP

COMMERCE / SELF SERVICE

CPQ

CUSTOMER

CRM

CRM – Customer Relationship Management System

Manufacturers have evolved to be more innovative, connected, and customer-centric than ever. A manufacturing-focused CRM helps them achieve their new goals and manage the complexity of all customer interactions.

At the same time, a CRM keeps sales teams and distribution partners updated with the latest data from the manufacturer’s ERP, CPQ, or Commerce systems. It provides manufacturers with a 360-degree customer view and enables them to match customer’s demands for speed and customization.

At its core, a CRM helps manufacturers manage end prioritize customers to:

• Drive successful sales outcomes with accurate customer data

• Manage customers and their needs across all channels

• Increase sales efficiency by automating the lead-to-order process

Typical functionalities of a manufacturing-focused CRM are customer account and contact management, purchase and conversation tracking, pipeline management, forecasting and reporting, and sales collaboration features.

INDIRECT SALES

DIRECT SALES

MANUFACTURER

Graphic 15 – A Digital Sales Platform makes ERP data ready all sales channels

ERP

COMMERCE / SELF SERVICE

CPQ

CUSTOMER

CRM

A DIGITAL SALES PLATFORM MAKES ERP DATA AVAILABLE FOR ALL SALES CHANNELS




CPQ – Configure Price Quote Solution

A CPQ is a central element in manufacturing sales. It enables manufacturing sales teams or channels unprecedented access to all sales relevant data. It then assists with generating quotes for complex products faster, more accurately.

Tight integration to the manufacturer’s ERP is essential. But a CPQ’s true potential is realized when it is coupled with the CRM and E-Commerce system.

A CPQ system digitalizes and automates the entire quotation process to:

• Create best-match offers from standard to fully customized products and solutions

• Automatically generate consistently accurate quotes and enable shorter sales cycles

• Help exceed buyer expectations with outstanding offerings on all selected channels

Classic features of a CPQ are product/service catalogs with smart selling functionalities, quote automation with workflows and approval routings, as well as product, service, and solution configuration.

Increasingly popular are interactive 2D and 3D visualizations for products and solutions. In addition, an essential feature for CTO and ETO businesses is manufacturing costing and pricing. And finally, a CPQ should tie all quote details together through quote management and document creation functionalities.




E-Commerce Software

Today customers expect a seamless buying experience with 24/7 access—even from B2B businesses.

Commerce solutions for manufacturers can be anything from a digital product catalog, an online store for the entire product and service offering, a spare parts online shop, or a partner, distributor, and dealer portal.

They satisfy the demand for 24/7 business operability and provide fast business growth options at a very low cost and high returns.

Commerce platforms make knowledge and products instantly available online to:

• Enable self-service purchasing for customers or partners who know what they want

• Empower distributors or partners to inform themselves, make inquiries, or purchase

• Deliver a seamless and error-free buying experience for after-sales and repeat-purchases

A manufacturing commerce platform typically delivers an out-of-the-box online shop or portal based on manufacturing products, configuration, and customer data. It securely restricts data access and provides personalized offers for different buying groups.

For example, it can include customer account discounts, promote install-base-related products, or recommend spare parts and consumables that are relevant to the respective customer.

Partner portals offer a similar online buying experience. In this case, the partner plays the role of the buyer and can inquire, purchase, register equipment, or re-order consumables on behalf of their customers.


https://blog.inmindcloud.com/the-manufacturing-commerce-playbook



Customer centricity in manufacturing salesAs hard as the manufacturing sales process is, the B2B buying journey can be just as tricky. Today, buying a complex manufacturing solution involves six to ten decision-makers. You are expected to gather product and seller information and use it to make the best buying decision possible for their business. Globalized markets bring even more options and solution providers to the evaluation table.

However, even when problems are well-defined, solutions are explored, and requirements clear, the buying group must still complete several tasks (e.g., process validation and internal alignment) to select the best supplier. Circling back to our first graphic, you may notice that every complexity in the sales process matches equally complicated processes on the buyers’ side.

Graphic 19 – Customer centricity is more important than ever

Globalized markets give customers more options

Several tasks need to be

performed to select the best

supplier

Buyer's committee is expected to

make the best decision for the

company

Buying decisions involve 6-10

decision-makers

Make it easier for customers to buy now, and they are 2.8x more likely

to buy again

CUSTOMER CENTRICITY IS KEY TO FUTURE GROWTH

34 | Customer centricity in manufacturing sales inmindcloud com



Manufacturers who understand that they have to simplify selling, but at the same time simplify how customers buy, have made the necessary shift in perspective to be successful. In addition, a focus on customer experience and aligning the customer journey with the sales process can repay in terms of higher win rates, bigger deal sizes, and customer loyalty.

Graphic 20 – Align the customer journey with the sales process

Customer Journey

SalesProcess

Alignment through digital sales platform

Vender &product research

Definingrequirements

Negotiatingwith vendors

After-salesexperiencePurchase

Online/offline presenceDistribution/partner

Product &solution portfolio Defining offer

Customer satisfaction/retentionOrder & fulfilment

ALIGN THE CUSTOMER JOURNEY WITH THE SALES PROCESS

35 | Customer centricity in manufacturing sales inmindcloud com



Manufacturing sales is as complex as it gets Manufacturing sales is shaken and shaped by market challenges, industry specifics, manufacturing types, and distribution mix. That means every manufacturer faces a unique challenge when it comes to selling their product or services. No two businesses are the same.

To overcome their challenges, manufacturers need a strong but flexible sales strategy that can help them adapt to the risks and opportunities that arise with ever-changing market demands.

This approach can only be possible with digital manufacturing sales software such as CRM, CPQ, and Commerce. With these solutions, manufacturers can easily protect margins, improve customer satisfaction, and, more importantly, increase revenue.

However, the full value of these digital solutions only unfolds when they are run on one platform where deep backend integration ensures seamless data flow between your ERP, sales channels, and customer.

Digital sales solutions and industry 4.0 technology offer manufacturers the path to build agile and sustainable manufacturing models and matching sales strategies. A customer-centric approach ensures that manufacturers become easy to buy from and, in addition to that, equipped for the future of a consumerized B2B world.

Conclusion

36 | Conclusion inmindcloud com



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Documents

Manufacturing Sales Handbook