What do you get when you cross Marvel’s Green Lantern with Wolverine? A no-nonsense, critical thinking powerhouse: the Green Wolverine. What about Phoenix Force and Wonder Woman? Think: resilient leader with a knack for saving lives in the nick of time, Wonder Phoenix! Now, what do you get when you combine Germany’s heavyweight industrial maker, Siemens AG, with French rival, Alston? According to ABC News, a “new European champion” in the manufacturing space.
The newly created €15B mega-company is set to become the industry’s global leader in train manufacturing. And, while economic and business factors primarily influenced the deal, there’s a huge opportunity for the combined brand to reap significant financial benefits and optimize the customer experience.
Industry consolidation isn’t new and most likely isn’t going anywhere – French company Suez Group just finalized its acquisition of GE Water. Regardless of industry, the world is in a constant state of acceleration. But, the manufacturing sector in particular is changing faster than ever. From the aforementioned industry consolidation, to even more demographic, economic and social changes, we’re about to see a major shift in customer expectations and demands.
But, embracing change will allow manufacturers to achieve new levels of customer loyalty and the competitive differentiation required to achieve superior financial performance in the long run. With this in mind, here are three key ways manufacturers can adapt today to navigate this changing world faster than The Flash:
1. Invest in human capital and technology resources. There is more pressure on manufacturers than ever to create more demand and enhance the customer experience. The status quo won’t cut it anymore – the most innovative brands will need to invest in both human capital and technology to further enhance their abilities, especially in the case of after-sales service.
After-sales service has long been a sub-optimized area of business. But, in today’s climate, companies that are unable to meet the service demands will quickly see customers purchasing from competitors. Manufacturers need to consider investing in technologies to make the service experience more seamless for the end-customer, as well as equip (read: hire) staff that embrace change and have a desire to innovate. Service parts inventory management and pricing are the linchpin of any effective service operation, and effective planning and forecasting, plus aligning inventories, resources and processes, ensures optimal customer service levels with minimal risk and cost.
2. Tap into previously hidden financial levers. Delivering a financial return for manufacturers is harder than ever, and with disruption from companies like Amazon, finding new sources of growth and profit is tough. And, all too often, manufacturers tend to focus on the finished goods side of the business, where margins are very slim.
After-sales service offers a greater growth rate (9% compared to new sales’ 5%) and gross margin (39% compared to new sales’ 27%). Manufacturers need to capitalize on this opportunity, adopting technologies and business practices to help them optimize their service supply chains. And, as more businesses across industries move to subscription based models, investment in cloud-based after-sales service technologies will become even more attractive.
3. Move from reactive to proactive service. Many manufacturers today still adhere to a break-fix, reactive method of service – repairing equipment after it has already failed. The service side of the business has always been a key revenue and profit generator, but as the world changes and customer expectations evolve, manufacturers need to rethink some of these outdated ways of doing business.
Today’s customers expect a certain level of product uptime, a degree often agreed upon in a service level agreement (SLA). But, to guarantee the expected level of product uptime, manufacturers have to focus on a predictive style of maintenance. This entails incorporating emerging technologies like IoT into everyday business practices, as well as adopting sophisticated after-sales service solutions that automate and optimize nearly every facet of the service supply chain. Ultimately, by repairing parts before they even fail, manufacturers ensure an amazing customer experience – one that will keep loyal, repeat buyers coming back.
In today’s world, there is hardly anything in life that isn’t changing. And, this change is happening at a faster rate than any other time in history – and it’s close to exceeding companies’ abilities to learn and adapt. But, manufacturers that invest the right amount of time and resources into the areas of their businesses that will move the needle – like after-sales service – will save the day, every time.
For more information about today’s changing technology climate and how companies are learning to adjust, download our free Syncron Orange Paper, State Of Emerging Tech In Field Service. See how manufacturers and field service professionals are handling this changing world, one customer experience at a time.
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