04/05/2015
By Phil Lewis, Senior Director, Business Consulting at Infor
We all know that consumers are becoming increasingly sophisticated. Well informed, sceptical and fickle, they are brand-savvy and demand a great deal in return for their loyalty. For the companies that serve them, attracting and retaining customers is tougher than ever, as increased competition, new channels and value propositions flood the market.
With one swipe of a tablet a consumer can evaluate and choose alternative, cheaper or faster suppliers to satisfy their need for a new product, and if a company falls short of a promised delivery window, the modern consumer can defect in a couple of clicks.
Testament to this trend is that according to a recent survey of manufacturers commissioned by Infor across UK, France, Italy and Germany, 70% of UK companies say
that their customers expect lower prices and either the same or an increase in quality. When they lose out on sales, 52% said it was to cheaper competitors.
Until recently this trend was viewed largely as a challenge for the sales and marketing department. But while sales and marketing play a key role, according to research, customer service, poor aftermarket support and a lack of attention from account managers actually rank much lower than factors such as pricing, fulfilment and product quality when customers express dissatisfaction.
With most manufacturers reporting that customer expectations are having a direct impact on their profitability, and a further majority saying that brand loyalty has been negatively impacted, manufacturers must address these challenges holistically in order to stay relevant and keep pace.
The recent resurgence has highlighted that manufacturers are very adept at reinventing themselves in response to market conditions. However against an already complex and challenging landscape, how can they respond to this new consumerist culture?
Customer-centric = technology-centric
Adopting a new customer-centric manufacturing operation requires deep cultural change, with technology at its heart.
The days of investing in technology to deliver back office efficiency savings are still ongoing of course. However most organisations have achieved this, and instead, are turning to IT to help drive innovation and growth.
Technology is intrinsic to every decision made by an organisation as it connects systems, machines and people to facilitate new ways of efficiently and effectively responding to customer needs. Whether that is using a 3D printer to quickly and cost effectively generate and ship a spare part; reducing the number of suppliers in order to consolidate the supply chain; opening a new plant; changing BoM to facilitate production following a customer request for customisation; or pinpointing lead times for a new product, technology is the foundation to build business processes and workflows throughout and beyond the factory. Similarly, the interface between people and technology has to be quick, intuitive and reliable in order to encourage user adoption and maximise the flow of information.
The good news is that on the whole, manufacturers view this new consumer-led dynamic as an opportunity. Many are already making operational changes to their businesses, with half of those surveyed describing these changes as ‘major’ and a further 50% saying that they will continue to make operational changes in the next 12 months.
Through embracing customer-centric culture underpinned by technology, and continuing to make changes to adapt, manufacturers can stay relevant to their customers, innovate and use improved productivity as a lever for cutting costs.
This combination will in turn set the industry in good stead for growth and allow European manufacturers to complete on a global stage.
