Inside Salesforce’s New Trends in Manufacturing Report

Research reveals how future-ready leaders are driving business agility.
 
Mar 22, 2021. 4 MIN READ

For many manufacturers, the destabilizing force of the pandemic exposed weaknesses along the entire value chain. It also highlighted opportunities to justify larger-scale change.

For Salesforce’s Trends in Manufacturing report, we surveyed 750 manufacturing leaders around the world to identify the pandemic’s lasting effects on the industry – and find out what it takes to succeed in the coming decade.

Below are some of the key takeaways on how manufacturing leaders are driving business agility in the wake of 2020.

Manufacturers adapt to a new landscape.

Changes to customer-facing roles are here to stay.

Manufacturers felt the pandemic’s effects ripple across their lines of business. More than nine in 10 manufacturers reported impacts to their customer demand, production capacity, distribution lines, and more.

Yet the most long-lasting changes centered around customer-facing roles. As in-person meetings and factory visits were replaced by video calls and virtual inspections, customer-facing teams were forced to adapt overnight. While these new ways of conducting business were implemented quickly, they’re not going away any time soon. Over half of manufacturers consider the changes to customer service and sales capabilities to be permanent.

Customer-facing roles have changed for the long run.

Manufacturers rate the extent of the COVID-19 impact on the following:

New research shows virtually all manufacturers felt the pandemic’s effects across their lines of business and about half believe those changes are permanent.

The C-suite focuses on optimizing processes and adapting demand planning.

2020’s volatility has made one thing clear – conventional forecasting methods aren’t keeping pace with rapidly evolving customer needs. Eight in 10 manufacturers (81%) say they need both new approaches and new tools for accurate forecasting. It makes sense: 95% of manufacturers admit to applying manual approaches to their forecasting, with less than half of manufacturers using mostly automated tools. In response, 81% consider moving their planning process to the cloud as a critical or high priority. We see this reflected in C-suite priorities as well, with increasing process efficiencies and demand planning at the top of their list.

Manufacturers prioritize improving operations amid an evolving landscape.

Top five priorities over the next two years, C-suite executives say the following is critical or high priority over the next 24 months:

Many manufacturers struggled with manual processes during the pandemic. Execs say their top focuses for the next two years will include digitalization to help improve demand planning and optimizing processes per new research from Salesforce.

Legacy tools and siloed operations are among the biggest hurdles.

The biggest foil to traditional forecast accuracy is a lack of data transparency and accessibility across the value chain. A third of manufacturers consider legacy tools and dispersed data to be serious challenges. Manufacturers also held widely divergent views on their own operational efficiency, exposing an inconsistent perception of the business. Case in point: Operations teams are two times less likely to feel their organizations react rapidly to market changes than their marketing or sales counterparts.

Lack of data transparency and siloed teams are significant barriers to accurate forecasting.

Manufacturers rate the following impediments to creating sales forecasts and production schedules:

Siloed teams and data are major impediments to manufacturing forecasts and production schedules (per salesforce study sforce.co/trends-in-mfg).

Profiles of Future-Ready Manufacturers

So what does it take to succeed in the face of so much change? To understand the best path forward, we profile two key types of manufacturers: future-ready manufacturers (that is, those who feel their systems and technology are ready to handle the decade ahead) and unprepared manufacturers (that is, those who do not feel their systems can handle the next 10 years). Here are the biggest differences:

Future-ready manufacturers have more systems in the cloud.

While more future-ready manufacturers report adjusting their business in response to the pandemic, these changes appear to have made them more resilient. Future-ready manufacturers are nearly three times as likely to react rapidly to market disruption. At the same time, future-ready manufacturers are 2.2 times more likely to have moved most of their sales and operations systems to the cloud. Not a single unprepared manufacturer has fully moved its sales and operations to the cloud.

Manufacturers who feel “very prepared” for the next decade are already mostly in the cloud.

Sales and Operations System Location

Future-ready manufacturers are able to react rapidly to market changes.

Manufacturers who say their organization reacts rapidly to market, product, or customer changes compared to the rest of the industry:

Future-ready manufacturers are more likely to have migrated to the cloud. They are also more likely to react rapidly to market changes (sforce.co/trends-in-mfg).

Future-ready manufacturers exhibit a “services as a revenue center” mindset.

Future-ready manufacturers are more bullish on bundling product, support, software, and other services in a single revenue model – also called servitization. Nearly 10 times as many in this group are expanding their servitization efforts compared to unprepared manufacturers. Future-ready leaders were more likely to consider services like support services and spare parts services an integral part of their value proposition – evincing a “services as a revenue” mindset.

Future-ready manufacturers are already delivering on servitization.

Manufacturers describe servitization as part of their company strategy:

Future-ready manufacturers are bullish on new business models like servitization. See what else sets future-ready manufacturers apart at sforce.co/trends-in-mfg. 

The adoption of such new business models, coupled with their progress migrating service systems to the cloud, have positioned future-ready manufacturers ahead of their peers. How are you preparing for the decade ahead?

This is only a partial summary of our findings. For more insights, download the full report. For country or subsector specific data, check out our interactive tableau dashboard.

 
 
 

Fill out the form to get this report.

Enter your first name
Enter your last name
Enter your title
Enter a valid email address
Enter a valid phone number
Select your industry
Select your country
By registering I confirm that I have read and agree to the Privacy Statement.
 

Product

Manufacturing Cloud is a tailor-made CRM solution in a single platform.

 

More resources

 
 

Get timely updates and fresh ideas delivered to your inbox.