Following a tumultuous year of COVID-19-related supply chain disruptions, manufacturers look forward to a year of new normalcy, acclimated to the challenges presented by excessive caution, delays, and supplier changes. Add to the mix the increase in local demand for certain goods, deemed necessary for U.S. production by the current administration. Some companies have already adapted their business models, i.e. producing much-needed PPE equipment for the medical community. Others are preparing for increased demand after a rather dormant period of sparse activity.
Tariffs on Chinese imports inflicted sudden disruptions to businesses relying on suppliers solely in the region. Many have been compelled to abandon their suppliers and find new ones in alternative international locations or within the United States.
How They’ve Adapted
According to manufacturer surveys conducted by Newsbreak, most manufacturers have rebounded, having implemented changes to the way they run their businesses. Most expect a rebound in 2021. They’ve learned to social distance employees, require masks, adhere to safety policies, track illnesses and stagger attendance. They are planning for a future outbreak and moving to the cloud to allow more employees to work remotely.
Companies are spending more time working with digital sales tools to compensate for the inability to conduct regular face-to-face transactions. Webinars and Zoom demonstrations have increased in popularity. Some who have relied exclusively on desktop programs have moved to the cloud, i.e. to access their QuickBooks software online, and have added affordable cloud-based inventory management software, such as SOS Inventory, to streamline all their backend operations. Customers have become accustomed to being contacted virtually; we are past the age of it being interpreted as impersonal outreach. These are all trends that are likely to continue in tandem with other traditional operational methods, depending on the needs or expectations of the customer.
Growth in an Alternate Normal
Digital investments will continue to support the customer relationship and businesses will look for ways to make doing business easier. That may entail building an e-commerce store for wholesalers, distributors, and retailers to place their orders, providing order updates, and tracking via email or text notifications. Choosing a platform designed to integrate with other business management software to seamlessly transfer customer and order information to inventory and finance software simplifies the process for employees accessing these systems.
The Xaas (anything as a service) model is increasing in popularity among manufacturers. When customer’s budgets are limited, the manufacturer can offer “alternate items or services” for sale to maintain the business relationship. “Manufacturers and distributors who invest more heavily in “overlay specialists” and training are driving 27% more new product sales than their peers.” (Newsbreak)
Marketing efforts have gone almost entirely digital throughout a period when no one knew what to expect next. In the process, businesses have learned the added benefits of digital marketing; costs per conversion are usually lower than traditional marketing methods and tracking codes make it easy to discover which advertising efforts perform best. Companies can A/B test their campaigns and make improvements to lower CPCs and increase conversions. More companies have also invested a greater percentage of their marketing budgets towards search engine optimization with the promise of long-term growth. Paid ads stop performing if the business stops spending; however, high-quality content designed around terms people use to search for their products typically delivers the highest converting traffic of all marketing channels.
Growth drives competition not only along industry lines but for talented workers, as well. As more opportunity opens, compensation must be competitive to secure the best talent. As trained employees leave and new hires require training, resources must be applied to ensure new hires are set up to succeed and the business doesn’t suffer as the more seasoned employees depart. New employees may be required to bring more technical skills to the role as operational software continues to evolve.
Reporting tools should provide real-time stats and be unified across the business. Businesses operating on spreadsheets in different departments are segmenting information and reporting varying inventory figures to management. Unifying all operations, costs, sales, purchasing, and accounting information through a single software platform is the ideal solution for producing one version of the truth.
COVID-19 has forced manufacturers to act on plans that may have been slated for future dates and compelled them to uncover creative ways to adapt. If nothing else, it has taught them to prepare for the unknown, how to react quickly, and what it takes to persevere in an unknown environment. Although many are still hoping for something to return to normal, lessons have been learned through the pandemic and many changes have made these companies stronger as a result.
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