Q&A: Salesforce’s Ashish Kothari on Manufacturing Cloud and the Industry Impact it Will Have
In response to dramatic changes in the competitive landscape for manufacturers, Salesforce has just announced Manufacturing Cloud, a new industry-specific product for manufacturers that brings sales and operations teams together around a unified view of market and customer demands to more accurately forecast, plan and drive predictable business performance. Manufacturing Cloud is not the first industry-specific cloud that we have delivered, and we have learned from experience that fine-tuning features such as Einstein-driven artificial intelligence for specific industries can have transformative results.
The manufacturing industry depends on predictability, as its capital-intensive businesses often have complex physical operations that cannot be quickly or inexpensively modified to meet changing customer demands. Manufacturers need a solution that helps them better understand customer needs while improving visibility across the entire value chain. That’s Manufacturing Cloud, and we caught up with Ashish Kothari, Senior Vice President of Products at Salesforce, for a discussion on how this new product was designed, and what it will mean for manufacturers. Here are his thoughts.
What is driving changes in the manufacturing industry?
In today’s world, products are commoditized and buyers demand choice. The buyer and market expectations are constantly changing. On the other hand, manufacturing is capital-intensive, with complex physical operations, making it difficult to quickly adjust to changing circumstances.
The only way to beat this paradox is by predicting the demand accurately and delivering on your promise of great customer experience. That’s why manufacturers are embarking on the journey of digital transformation with us and deploying the latest technologies, including advanced analytics and artificial intelligence on their enterprise-wide data, to better predict demand and meet customer commitments.
What does Salesforce see as the opportunity in the industry?
If we look at it from our customers’ point of view, their biggest challenges are unknowns around trade wars, changing macroeconomic conditions and newer business models. The world’s largest taxi service doesn’t own a single taxi, for instance.
Customers have to constantly ask questions like whether certain distributors or partners might not be buying from them as much as they used to. The answer could be yes, could be no.The risk associated with this uncertainty is significant, and can adversely impact a manufacturer’s book of business. That is why knowing about demand in real-time by monitoring the grassroots of the business is critical.
How are manufacturers thinking about the future?
Manufacturers are embarking on their digital transformation journeys. It has become imperative to deliver a differentiated customer experience, and do so profitably. The fourth industrial revolution is generating a lot of data. Customers already have a lot of data, although siloed, in their enterprises in disparate systems. Those companies that unify this data, and surface it intelligently for data-driven decision-making will be most successful.
What was the process you followed in developing Manufacturing Cloud?
The strategy was fairly simple. We identified a few problems that we believed should be solved. We recruited design partners from our global manufacturing installed base and validated our hypotheses with them. Then we went back to the drawing board and came up with proof of concepts and worked iteratively with our design partners until we locked the design for the actual development.
The objective we had set ourselves was to help manufacturers manage their run-rate businesses better. For most manufacturers, more than 50 percent of their business comes from existing customers in the form of repeat business. Traditionally, the net new business was managed in Salesforce with opportunity management and the run-rate business was managed in ERP solutions in the back office. This required sales personnel to use multiple applications and no one ever had a complete view of the business. We wanted to solve this. We wanted to provide the ability to manage both the run rate and new business on, Salesforce.
For us to effectively solve this problem, it was also important to have access to all relevant data in the customer engagement layer. This enables effective customer conversations, and better account management. So, we developed the ability to bring the data locked in back office office systems to Salesforce. Finally, we wanted to put the power of artificial intelligence in the hands of manufacturers to make sense of all the data to determine which accounts to pursue, products to position and prices to quote.
What are some of the Manufacturing Cloud features you’re most excited about?
We are excited about the whole feature set. We crafted the feature set and the roadmap in close collaboration with our manufacturing industry customers from across segments to help bring predictability into their account planning by breaking down silos and fostering collaboration. What’s most exciting is how manufacturers are able to infuse intelligence at every step to create a unified view of the business, deliver fresh insights and pave the way for better account relationships.
Of all the new features, my personal favorite is the Manufacturing Einstein Analytics pack. Einstein analyzes all the data from net new business, run rate business, historical orders, current orders, etc. and churns out insights and recommendations on which accounts to target, products to position and prices to quote. It is AI in action.
Can you walk us through a hypothetical scenario of how a customer will use MFG Cloud and what solutions it will provide?
Sure, let me give you an example. Cindy is a key account manager. She logs into Salesforce Manufacturing Cloud to manage her run-rate business account. Her dashboard shows that one of her accounts is lagging behind on the agreed-upon quantities volumes and revenues. She sets up a meeting with Ian, her customer who runs the account. Ian, sees the meeting agenda, and knows that the agenda is to discuss the planned vs. actuals committed in the agreement. He logs into the Manufacturing Cloud community portal to track the planned vs. actuals on the agreement.
As he gets the same view as Cindy, he also notices the shortfall. Yet, Ian is confident on meeting numbers as the holiday season is just around the corner and seasonality will kick in. Cindy and Ian meet to discuss the plans to increase sales. They agree upon an action plan. Cindy reviews the price offered to Ian in a price elasticity dashboard to ensure that the price is mutually beneficial for the agreed upon volumes. She also revises the forecast upwards based on her discussion with Ian, thereby providing an accurate forecast.
Why does Salesforce invest in industry clouds?
Each industry is unique in terms of the products and services offered, the processes they follow, the regulations they are subject to, and more. If you think of your own customer experience, it will be different when dealing with, say, a bank or an automotive dealer.
Salesforce’s industry clouds are customer engagement solutions that are fine-tuned for specific industries. They extend the Salesforce Lightning Platform and other Salesforce assets with processes that are unique to each industry.
We are really excited about this launch. This has been a joint effort of our entire Ohana: customers, partners, employees. We’d like to thank them all from the bottom of our hearts and we look forward to taking this product to great heights together.