Customer fulfilment has dethroned costs at the top of the manufacturing agenda

It is not often you get front row tickets to a revolution. But that is exactly what has happened in a few short months within discrete manufacturing. The previous, relentless focus on cost containment has been the victim of a coup d’etat and given way to a new emphasis on customer satisfaction.

Where manufacturers once based decisions on: “What savings will this investment deliver to the business and how quickly?” the dominant question is now more likely to be: “Will this get us closer to our customer and improve our service delivery?” Although obviously, manufacturers still demand that it do so while improving efficiency and decreasing costs.

So what has brought about such a swift, profound change in direction? A survey by IDC of over 720 manufacturing leaders shows that this renewed emphasis on the customer is the result of a revitalised focus on revenue, profitability and an awareness of increased competition. As IDC puts it: “Serving the customer well creates the groundwork for competitive advantage.”

The research makes clear that the need for an edge over the competition and the resulting customer focus has replaced short-sighted cost cutting as the main discussion in the boardroom.

Regardless of what has caused this change, once you know that you need to refocus efforts from cost control and onto the customer, how do you achieve it? Satisfaction should not be understood in terms of just completing orders on-time and in-full (although such basics are pretty much where it starts).

Real fulfilment requires a deep understanding of individual customer needs, close relationships, and the ability to uniquely serve each client or order. This is not limited to just what the customer wants, but how they want it, when they want it, and how they want to do business with you. Even in the specialised manufacturing areas that have resisted the rise of commoditisation, how you sell is now just as important as what you sell.

For example, some customers may look to you to manage their inventory of your finished product, ensuring they can subsequently promise a level of service to their customers. Other clients may prefer to handle all processes from inquiry to invoices and returns, electronically in order to exploit efficiencies.

As a manufacturer you have to be flexible enough to accommodate these differences, but still be able to do so profitably. After a brutal credit crunch and recession, discrete manufacturers need to make the operations and supply chains that enable customer fulfilment as lean and cost-effective as possible. As a result, many now have a renewed focus on bid and project profitability to ensure that they can deliver on promises without breaking the bank.

Lastly, many manufacturers are looking to exploit demand planning and forecasting to proactively develop, manage and shape the customer demands that they must satisfy. For the most progressive manufacturers this is a case of taking control of their own destiny, influencing the very requirements and orders that they will have to fulfill.

Customer fulfilment, bid and project profitability and demand planning all rely upon technology systems that many manufacturers are only just starting to exploit. New technology is helping to make the most of the new focus and ensure that the customer – now once again the heart of boardroom decision-making – is kept on the throne.

Andrew Kinder is director of product marketing at Infor. He is charged with setting the strategy, determining focus industries, aligning forward development direction and driving global execution through marketing and sales enablement for advanced ERP and supply chain solutions.