John slowly counts all the open applications and tabs on his computer. His heart sinks. Does he really need all these data sources to renegotiate the contract with Constructibuild? John is a key account executive at a leading manufacturer of cabling components, and his main customer has asked him to renew their annual contract. And can he please come up with a very competitive price, taking into account all last year’s orders – both the run rate orders and the one-off orders for specific building projects.
This should be a straightforward enough exercise: review last year’s framework agreement, check the actuals, make an estimate for the new year and see what rebates apply. In reality, it is much more complicated. John has no idea what last year’s actuals were, unless he consults multiple data sources. Does this sound familiar? In all too many companies, information is scattered across disparate systems and getting a single source of truth is hard.
How did it come this far? Let’s take a look at some of the factors that have changed manufacturing and that have contributed to the complexity of insights and reporting.
Manufacturing has changed dramatically
The fourth industrial revolution, in which data became the single biggest asset, has changed things for any company working in manufacturing. For starters, production companies have suddenly come eye to eye with customers. Traditionally, the customer was a far-away concept, shielded by a sales chain of distributors and resellers. Digitisation in general and ecommerce in particular, have brought manufacturers and customers closer to each other. These consumers now expect the same customer experience from these traditional manufacturers as the service they get from new players like Amazon or Alibaba. These ecommerce giants are offering new products and competing products at lower prices, but especially with better service. Thirdly, the clock speed of markets is so fast that long-term planning is out of the question. This makes it harder to predict batch sizes and margins.
Integration across the value chain
With so many changes going on, automation is key. Unfortunately, different parts of the supply chain, sales processes and production planning have been automated separately and are not connected seamlessly. Having a close collaboration across the value chain holds many advantages, both upstream (between customers and Sales) and downstream (between Sales and Production).
- When a customer-facing ecommerce system is integrated with the Sales back office, customers themselves can change orders, place repeat orders and get quotes immediately based on agreed pricing brackets.
- From their end, Sales have a good insight into what the customer wants. Better still: Sales can compare the current pace of customer orders to previous sales, thereby enabling proactive sales development.
- Besides insight into inventory, Sales has real-time knowledge on how quickly customer orders can be fulfilled.
- Sales has an integrated view on both the run rate business and on one-off orders. Run rate and one-off are typically managed in different systems. By integrating these numbers, Sales get a single customer view and a single product view. Equally important is a single view on pricing.
- When systems are integrated, there is no need for tedious monthly calls between Production and Sales where most of the time is spent arguing over who has the correct numbers. Streamlined processes and integrated information systems eliminate the need to check multiple information sources.
- If Production knows both the inventory and the order volume that is coming in, it can make better decisions on when to order what raw materials. Pricing of raw materials may fluctuate, and an insight into order levels allows Purchasing to acquire raw materials at a time when the pricing is right.
- If inventory levels are easy to check and can be combined with orders coming in, inventory levels can be kept under control. This leads to a lower investment in working capital.
Information at everyone’s fingertips
Do the advantages above seem like a delusion? Salesforce Manufacturing Cloud makes this dream come true, with features such as management of sales and / or framework agreements, account-based forecasting, all the way down to the individual product, account-based targeting for easy follow up and full insights to overall performance and action setting to all involved, plus add-ons such as community portal for partners and Einstein analytics.
Account-based forecasting allows Sales to use its own formulas to calculate forecasts, based on orders, opportunities and sales agreements. Sales managers can use these forecasts to understand what products perform best and can decide which customer account(s) managers need to focus on, to drive sales. These insights can also form the basis to set measurable targets for account managers. When changes happen after the forecast has been set it is easy for the account manager to change the forecast, thus overwriting the originally calculated forecast.
By incorporating Community Cloud for Partners into Manufacturing Cloud, the real-time visibility and collaboration tools in Manufacturing Cloud can be extended to customers and channel partners. This will reduce the latency in the planning process. What’s more: this will also improve the overall accuracy of sales forecasts.
While adding Manufacturing Cloud as an extension to Sales Cloud will already lead to more visibility and transparency in the value chain, the Einstein Analytics add-on provides many more insights straight out of the box. Einstein Analytic is the Artificial Intelligence engine of Salesforce and when added to Manufacturing Cloud comes with between 50 and 60 pre-built Einstein dashboards. This eliminates the need to develop custom reports. Making custom reports is time-consuming and can eat up to 40% of a project’s total budget. Having these intelligent dashboards makes it easy to take informed decisions.
Manufacturing Cloud provides all actors in the value chain with information at their fingertips. Having information at your fingertips has been a given for the last few decades, however the key in the manufacturing industry is having the same information at everyone’s fingertips. That is one of the main key elements of the added value derived from implementing Manufacturing Cloud.