Manufacturers gain the benefits of CRM technology

A striking feature of the manufacturing software market over the last year has been the renewed interest in customer relationship management (CRM). Sages research with Benchmark confirms that manufacturers have suddenly taken to this technology.

One mid-market industrial company in five now plans to invest in CRM in the next 12 months. For them, CRM is no longer just another three-letter acronym but an increasingly important and reliable tool which directly addresses many of their most pressing business issues. And it isnt hard to see why.

Gain the advantage

First, all manufacturers, whatever their size, can take advantage of generic, non-sector specific benefits that the retailing and the financial sectors have implemented so successfully for themselves. Integration creates a single true view of the business for both suppliers and customers. That, in turn, means creating a single view of customers and suppliers in the operations IT systems. No more expensive, time-consuming and error prone re-keying of information from one system to another. And no further need to tell the customer youll phone back, as you scrabble for the information you require to answer the query.

But the available benefits of integrating disparate computer systems and applications dont just arise from linking back-office financial and other systems on the one hand with so-called front-office, customer-facing applications like CRM on the other. There are also sector-specific benefits to industrial systems users, third- and fourth-dimension effiencies available from bringing internal warehousing and shop floor systems and external supply-chain systems into the integration picture.

If sales staff have instant access to first-hand information about production schedules and capacity constraints the delivery dates they give customers will be reassuringly accuratea vital influence on repeat business.

Prediction accuracy

CRM gives manufacturers a much clearer and more reliable picture of the future-order pipeline than was possible before. It amounts to an empirically validated and dependable guide to how many customers are going to convert enquiries into orders within whatever timeframe the business chooses to set.

The information from such a forecasting tool can be fed into the planning system to optimise the master production schedule (MPS) and, whether for a week or a month ahead, can support materials requirements planning (MRP) and production scheduling. The same systems can be used to maintain records of supplier and vendor purchasing status, quality and delivery performance.

Well-implemented CRM undoubtedly gives order-of-magnitude improvements in vital data accuracy. But when CRM is allied to business intelligence (BI) tools, the case for integration is overwhelming. BI allows businesses to bring together multiple systems into a single system that gives you an overall view of business performance, making the long-promised business dashboard a reality.

If you want to know the impact of a price change across your business, the dashboard tells you at once. It tells you who your most profitable customers are by spend, by product or by region. All this information and much more is sitting on your CRM system.

Thats been the experience at Curtis Instruments, a US-owned company which designs, manufactures and supplies electric-vehicle speed control and battery measurement technology for customers ranging from retail suppliers to Caterpillar, Toyota and other large OEMs. The companys sites in the US, UK and Europe, India, China and in Latin America generate annual sales of US$120 million.

Clare Perry, Curtiss Northampton-based West Europe IT and systems manager, says: We want to come across to our customers as one company, so we need the same standards and the same systems, which will all talk to each other.

Curtis uses a SalesLogix CRM system to integrate with its Sage Line 500 ERP and other systems for production scheduling, financials and back-office functions. It provides us with easier reporting and better monitoring: we know how many customer visits our people are undertaking each month, and what theyre doing. Sales staff are paid commission on customer visits, as well as on sales and margin, so the remuneration calculations are now easierand the company is also able to identify and act on common issues quickly.

Previously, we had to enter information on three business systems: now, its a single, integrated set-upand data goes to Corporate, too, says Perry. Information on order status, issue resolution and anything else is easily accessible, which is particularly important for our remote people. Their information is now updated every time they log on, which means they can answer queries and progress chase far more effectively.

Together, she summarises, these systems provide the high standards of quality, accuracy, consistency and availability of information essential for a company intent on growth.

Tailor the solution

Size doesnt matter. The tools are available to give the smallest jobbing shops the same CRM benefits as enterprises 10 or 20 times their size. And manufacturers of all sizes can achieve this level of effectiveness without ditching their old systems. They can have it simply by using standards-based integration tools to build on what they already have.

Not that CRM is a one-size-fits-all technology. The job-shop will find that shrink-wrapped PC-based tools like Sages ACT! contact-management system will provide most of the features it needs by gathering all its customer and supplier data in one place, along with such details as when they were last contacted and when they need to be contacted again.

Some bigger producers will gain greater advantage from the Sage CRM Mid-Market Edition, an out-of-the-box package which provides broader integration to XML or EDI-based message-exchange systems. Other larger or more specialist manufacturers need more configurable solutions, such as SalesLogix. These sales force automation systems provide all the functionality such businesses require to store and manage interactions with all their current or future customers and sales prospects.

For Sage this is no mere theory. One of the worlds largest suppliers of business management solutions, Sage serves over three million customers worldwide, 500,000 in the UK alone, with a distributed SalesLogix system which gives us instant information not just about each one of them but about our suppliers and business partners too.

We wouldnt be without CRM. And you shouldnt be either.

1. Companies with more than 250 employees

Andrew Buckley is the director of Sage Manufacturing Solutions. In the UK, Sage has over 80,000 customers within the manufacturing sector, representing 40 per cent of the UK market. Its goal is to help manufacturers automate and integrate their business processes, internally and across their supply chain, helping them run at optimum efficiency and profitability.