Manufacturing’s Digital Challenges and Opportunities
Manufacturing is one of the most important value-generating sectors worldwide. In the US alone, for every $1 spent in manufacturing, another $1.89 is added to the economy – the highest multiplier of any economic sector. But the industry is at an inflection point, being reshaped by digital transformation across all divisions, and the outlook is upbeat.
The vast majority (89.5%) of manufacturers surveyed by NAM feel either somewhat or very positive about their company’s prospects. Manufacturing is ripe for change and leading players are investing in automation and digitization to pursue a different model for driving growth.
Nearly three-quarters (72%) of manufacturing companies surveyed by PwC said they are dramatically increasing their level of digitization, and are expecting to be ranked as digitally advanced by 2020 compared with only 33% today.
With so many market variables at play and technology trends converging to drive significant change, the bar for success in the manufacturing industry keeps going up. Demonstrating knowledge and leadership will help position your firm as a trusted partner to work with.
Create mutually beneficial relationships with distributors and channel partners
Developing long-standing relationships with distributors and channel partners can help manufacturers maintain their competitive edge in the Industry 4.0 age, unlocking significant value from the supply chain. Distributors handle a significant proportion of the industry’s revenue, so they represent a crucial component of manufacturers’ channel strategies.
The manufacturer-distributor relationship has historically been complicated (or downright antagonistic), and market pressures haven’t made it any easier. For example in the eCommerce sector, research revealed a third (33%) of distributors consider Amazon Business to be the most significant threat to their business, more than double the proportion for the next most cited challenge of economic instability (15%).
Manufacturing Needs to Evolve Its Distributor Relationships
All too often, manufacturer-distributor relationships are tactical and purely transactional in nature, not extending beyond a focus on driving sales and margins. At its core, each of these relationships should be a strategic partnership where the two parties share mutual goals and invest accordingly. Adopting a more collaborative approach can create a wider range of dependable revenue streams for both sides as they capitalize on insights they wouldn’t be privy to if they worked separately. This two-way knowledge transfer helps foster stronger relationships with existing customers and win business from new ones.
To build a mutually beneficial partnership, manufacturers need to establish a reliable channel to provide partners with the information they need and create meaningful, two-way conversations. A lack of support is one of the most common complains distributors have about the manufacturers they work with, so it’s essential to provide all channel partners with appropriate support and ensure they have everything they need to help meet and drive further demand.
This post is a part series on how the manufacturing industry has adapted to the digital world. To learn more about how the manufacturing sector has changed, check out our report, “ON24 Webinar Benchmarks Report: Manufacturing Trends.”