Growing demand – how can manufacturers get back on the front foot?
Whether it’s disappointing manufacturing data from the world’s second largest economy, Brazil, which posted an 80 month low PMI score, or the US manufacturing sector contracting for the first time in three years, it’s clear that manufacturing is currently on the back foot.
In a slowing global economy, factories are struggling to gain momentum. The ever changing business environment makes it harder for manufacturers to maintain their profitability levels and deliver sustainable growth. The level of competition that factories now face to win or even simply retain business is extremely fierce. Buyers have the luxury of perusing through copious manufacturers who offer the same range of capabilities and products and are willing to squeeze their margins that bit further.
This new ‘empowered customer’ era creates a fickle world where infidelity is rife amongst manufacturing purchasers and it can be triggered by the smallest gripe. Today, any manufacturer seen to be slow in their response to changing customer demands risks losing business in an instant – equalling millions of pounds in lost sales.
With the rise of the digital world, customers across all sectors are now more connected and knowledgeable than ever before, using an array of different channels to contact companies with questions and complaints.
In the nitty gritty world of manufacturing it’s easy to forget about the importance of delivering customer service excellence but business can be won or lost on this very principal. There’s plenty of evidence to support this statement. Consulting firm Gartner found that 89 per cent of marketing leaders expect to compete primarily on the basis of customer experience by 2016 compared with 36 per cent four years ago. And, to reinforce its importance further - aftermarket services now account for about 24 per cent of total revenues and 40 to 80 per cent of a factory’s total profit.
It’s hard to ignore these stats. Many manufacturers could see a reduction in orders in the near future so it’s now more important than ever the industry gets to grips with the changing customer landscape and seeks new efficient ways of working to conquer customer complexities.
In recent years departments such as product development and supply chain have gone through transformational changes to adapt to the evolving landscape. Long gone are the days of the disconnected customer processes where inconsistent data, poor analysis and Excel spreadsheets ruled the roost. Now, manufacturers find themselves needing to implement the same transformational change that puts customer service at the very heart of their business strategy.
The principle concern for manufacturers should really be to mitigate the risks of inconveniencing the customer at any stage of the customer journey. With the empowered customer being present on so many channels, the obvious solution is to first make sure that the systems that customer-facing employees are using are effective and allow the customer to switch between these communication channels seamlessly. The technology should ultimately remove ‘friction’ from the buying process, allowing customers to continue a single conversation or transaction with the business.
Bernecker & Rainer (B&R), an Austrian-based, manufacturer of automation technology operating in 160 countries, has made some remarkable progress in this area and is seeing significant results. Having felt hampered by their previous disconnected customer service process, B&R invested in a new Customer Relationship Management system from SugarCRM that was quickly rolled-out across the company.
CRM systems are of course nothing new but they’ve evolved rapidly in recent years. Once little more than a glorified database of customer information, the most successful modern incarnations feature a level of sophistication that can revolutionise the way a company does its business. For example, user-focused tools and contextual intelligence help to discover new customer insights; marketing campaigns can be driven more effectively and a consistent service can be provided across all customer touchpoints.
B&R use the CRM technology to provide a level of specialised customer service that aims to keep their customers loyal for years to come. From the moment contact is made with a customer their key data is collated: company information, what the production needs are, how the products can be presented and the up-sell and service opportunities. Gathering this key information allows them to map the entire customer life cycle through the system.
Possessing this consolidated information allows B&R simply to know their customers better. They can now get ‘under the skin’ of their customers’ requirements, allowing their sales and marketing teams to deal with them on a more personalised level. This tailored approach means deeper and more meaningful customer relationships that bring lasting value to the business and its brand.
Like many companies, B&R tried for as long as possible to live economically with its in-house system, knowing it would be costly and risky to change. However, the decision was made that if the company was going to maximise sales and net margins, investment in technology that could offer increased efficiency, process automation and outstanding customer service was needed.
Technology that not only keeps you close to your customers but helps you anticipate their needs in order to secure future business is becoming a key ingredient of business growth. Customer satisfaction is the life blood of any successful growing business; the recurring revenues it provides can give manufacturing companies much needed stability, in both the good and the bad times.
Henning Ogberg is Senior Vice President & General Manager (Europe, Middle East and Africa) at SugarCRM.
Ultium Cells LLC/Li-Cycle: Sustainable Battery Manufacturing
Ultium Cells LLC - a joint venture between General Motors and LG Energy Solutions - has announced its latest collaboration with Li-Cycle. Joining forces the two have set ambitions to expand recycling in North America, recycling up to 100% of the scrap materials in battery cell manufacturing
What is Ultium Cells LLC?
Announcing their partnership in December 2019, General Motors (GM) and LG Energy Solutions established Ultium Cells LLC with a mission to “ensure excellence of Battery Cell Manufacturing through implementation of best practices from each company to contribute [to the] expansion of a Zero Emission propulsion on a global scale.”
Who is Li-Cycle?
Founded in 2016, Li-Cycle leverages innovative solutions to address emerging and urgent challenges around the world.
As the use of Lithium-ion rechargeable batteries in automotive, industrial energy storage, and consumer electronic applications rises, Li-Cycle believes that “the world needs improved technology and supply chain innovations to better recycle these batteries, while also meeting the rapidly growing demand for critical and scarce battery-grade materials.”
Why are Ultium Cells LLC and Li-Cycle join forces?
By joining forces to expand the recycling of scrap materials in battery cell manufacturing in North America, the new recycling process will allow Ultium Cells LLC to recycle cobalt, nickel, lithium, graphite, copper, manganese and aluminum.
“95% of these materials can be used in the production of new batteries or for adjacent industries,” says GM, who explains that the new hydrometallurgical process emits 30% less greenhouse gases (GHGs) than traditional processes, minimising the environmental impact. Use of this process will begin later in the year (2021).
"Our combined efforts with Ultium Cells will be instrumental in redirecting battery manufacturing scrap from landfills and returning a substantial amount of valuable battery-grade materials back into the battery supply chain. This partnership is a critical step forward in advancing our proven lithium-ion resource recovery technology as a more sustainable alternative to mining, " said Ajay Kochhar, President, CEO and co-founder of Li-Cycle.
"GM's zero-waste initiative aims to divert more than 90% of its manufacturing waste from landfills and incineration globally by 2025. Now, we're going to work closely with Ultium Cells and Li-Cycle to help the industry get even better use out of the materials,” added Ken Morris, Vice President of Electric and Autonomous Vehicles, GM.
Since 2013, GM has recycled or reused 100% of the battery packs it has received from customers, with most current GM EVs repaired with refurbished packs.
"We strive to make more with less waste and energy expended. This is a crucial step in improving the sustainability of our components and manufacturing processes,” concluded Thomas Gallagher, Chief Operating Officer, Ultium Cells LLC.