A survey/report which examines the challenges and opportunities identified by the manufacturing, distribution and wholesale industry for 2018 – featuring the electrical industry.
The report was commissioned by sales-i, the business intelligence software which works with electrical manufacturing, wholesalers and distributors.
The year in the supply chain: objectives, obstacles, and opportunities
The electrical industry is in a curious position going into 2018. On the one hand, its place in an increasingly digital ecosystem is beyond question. On the other, it continues to face a number of significant challenges: some longstanding, some emerging more recently, and all somewhat problematic for businesses operating in the space. How do electrical industry suppliers, manufacturing and wholesalers rise to the challenges of an evolving landscape? How can the industry adjust to a future forever in flux?
New research by sales-i hopes to provide some clarity. The report, which asked 233 senior executives operating in several industries (including electrical), sheds light on hopes, fears, and ambitions for the coming year.
Coping with challenges and harbouring hopes
So, what stands in the way of the supply chain’s success?
The most common obstacles are sales-related. Overall, more than half (59%) are struggling to find and retain new customers, over a third (38%) aren’t selling enough to existing customers; and a quarter are having difficulty with the performance of individual salespeople.
It’s often neglected in favour of improvements to products, but the simple business of connecting with customers – longstanding and new – is essential to the health of the industry. This is reflected in the top business objectives of those surveyed: 79% claim they aim to acquire more customers, 71% are looking to do more in terms of customer retention, and 30% are prioritising productivity gains. Each of these concerns corresponds to a specific challenge: teams need to sell more – and to sell more, they need to make the most of their time.
The easiest way to overcome these hurdles and achieve these goals is to prioritise investment in customer-facing technology. Business intelligence and CRM tools can provide sophisticated analysis of customer behaviour: the more salespeople know, the better their pitch; the less they must do in terms of research and reporting, the more time they have for preparation. Undoubtedly, salespeople want to do their best work; they just often lack the means to able to do so.
Opportunities amidst obstacles
Accordingly, it makes sense that the opportunities that respondents identified relate largely to innovation. Some 54% see hope in new product development, 40% are interested in improving their marketing, sales, and advertising campaigns, and 35% believe boosting production efficiency to be a particularly rich seam for them to tap.
There’s a degree of restlessness to these responses. Electrical manufacturing companies don’t want yearly iterations of the same old stuff if they can have exciting, new products to pique the interest of new customers and retain the interest of old ones. They don’t want promotional campaigns that fire off the same tired offers. They don’t want a workforce that works harder if they can have one that works more intelligently.
This is partially just the natural order of things – nobody wants to risk losing their customers to the competition – and partially due to a strong desire for competitive differentiation. An offering that can legitimately claim to be fresh and innovative will have more purchase with an electrical business’ target audience than one which promises the same old thing. Equally, a marketing campaign that can reach heretofore untapped consumer sources can be incredibly valuable. A more efficient production process can increase speed to market. However, none of these opportunities can be realised without manufacturing technology.
Though 2018 was the immediate focus of the report, it also asked wholesalers for their opinions on the future. Responses were neither fully optimistic nor fully cynical: the electrical industry is nothing if not pragmatic.
The economy is many things, but for most industries it’s at its best when it’s quiet. Yet periods of stability and prosperity must eventually end. Because manufacturers, suppliers, wholesalers, and retailers are all so closely linked, small dips in performance can echo across the whole supply chain.
Accordingly, an overwhelming 98% of respondents understand that the direction of the economy is essential to the direction of their business. Simply put, if the market is experiencing a downturn, customers are less willing to spend, and the range of things they wish to purchase dramatically narrows.
Whatever they choose to do in 2018, companies in the supply chain will need to pay close attention to the economy – whether they take advantage of it or attempt to succeed in spite of it.
Respondents believe that the availability of skills (or indeed, any lack thereof) will determine whether they can succeed in the near and distant future. This is logical enough: without specialised, talented employees, a company is poorly equipped to market their offering to prospects, to turn those prospects into customers, and to provide adequate products to those customers.
But where specifically should be the focus? Some 62% of those surveyed consider sales a hiring priority, 27% want to see more recruitment done in operations and logistics, and 21% aim to make strategic hires in product development and general production.
The question, of course, is not who to hire: it’s how to find the very best and convince them to join. This will be a long-term priority for electrical businesses.
Taking the technological initiative
It should come as no surprise that the electrical industry is curious about modern technologies, and sales-i’s report bears this out. While there is some scepticism, many more respondents are enthusiastic and optimistic about it: just 5%, for example, see automation and smart factories as a danger to their business, while 61% see it as a clear opportunity. E-commerce, meanwhile, is viewed as a threat by 18%, and as an opportunity by 70%.
A majority view innovation as a boon to their business. They understand that when time-consuming tasks are handled by machines, they can reclaim their time; they know that a digital sales channel is increasingly becoming an essential rather than just a ‘nice to have’. Eighty-four percent are using software to get the most out of sales. They know that customers demand more personalisation and a deeper understanding of their particular requirements - and they’re rising to the challenge.
The electrical manufacturing industry is in good shape, and it is partly due to this forward-thinking nature. But forward-acting will be just as important. In an uncertain environment, anticipating the future can seem futile. But if businesses don’t know exactly how events will unfold, they can prepare for most eventualities by making sure their technology is ahead of the game.
By Paul Black, CEO, sales-i