Manufacturing and Service Industries are Blurring

Across industries we are seeing consumers become more demanding of personalised products and services that meet their needs, and this is now expected.

While some industries are quicker to respond to this, research by SAP, the Manufacturing Success report, found that manufacturers are falling behind, with 80% agreeing they could be more customer-centric with their approach and product development.

Traditionally, most supply chains were designed from the factory outwards and focused on optimising supplier operations, particularly in terms of cost and efficiency. The rules of competition are changing though – customers are more demanding, products are more easily copied and markets are commoditised.

UK manufacturers are still grappling with this increasing customer complexity and changing competition. In order to truly succeed and grow therefore, embracing customer demands, and putting them at the heart of everything manufacturers do is key.

Here are three things which manufacturers must do in order to succeed in the customer driven economy.

Better understanding of customer base

If manufacturers are to effectively serve customers beyond core products they offer, they must look to build a better understanding of their customer base.

It’s not just about understanding the customer themselves – what they do, and the challenges they face – but it’s also about having deep knowledge of the industry in which they operate.

This will not only help to solve short time crises but through a consultative and integrated approach, this will also mean they can better support in the long term, planning for growth and strategic change.

Add value

The SAP research highlights one of the biggest shifts that manufacturers expect to see in customers over the next two years is demand for added-value services (67%).

Can you quickly adapt products to meet customer needs? Do you have the expertise and knowledge to make recommendations? Are you available to support 24/7? These are all worth considering when taking a customer first approach – by being flexible, available and positioned as the expert, customers will feel that they are getting an added value experience.

Increase transparency

Customers demand supply chain transparency according to the research which highlights that almost half of manufacturers are expecting this to be a number one priority as we move through this year.

By consolidating suppliers, and being more open and transparent, manufacturers will quickly build trust with customers. Fewer, better relationships mean a value-added consultancy service can be provided which shifts away from the commoditised, ‘race to the bottom’ model which fewer demand.

By creating whole new systems of value for customers that will help secure long term relationships and provide competitive differentiation, the lines between manufacturing and service industries are blurring.