Manufacturing Sales in the Machinery and Equipment Industry

Posted by Sabine Kempe on Aug 25, 2021 3:05:31 PM
Sabine Kempe
Find me on:

Your industrial machinery and equipment manufacturing business is operating in one of the largest, most competitive sectors in the manufacturing economy. It is a massive industry that serves almost all B2B sectors across the globe--from sectors like agriculture, construction, mining, aviation and aerospace, defense, and maritime.

Your business is tasked with design, fabrication, and assembly of various products that range from small-scale machines to industrial components or tools. However, as the global economy surges forward, your customers' expectations are rising along with it. They now expect new products faster (faster innovation cycles), being able to buy any number of machines (small batch sizes), and customization of your highly complex products (complex configuration). 

While digitalization of the factory floor can help with rising global competition and commoditization of hardware--which causes massive price pressure--your front end needs to be able to keep up, and most of all, sell what your business can offer. To overhaul your aging but sales process, however, you would first need to understand the key weaknesses and opportunities that your manufacturing models have. 

5+1 types of manufacturing that define sales in the steel and metal sector

The increasing need for customization and small batches can mean that machine and equipment manufacturers can often depend on more than one manufacturing model. Each model comes with its own weaknesses, opportunities, and sales strategies that can help manufacturers navigate market conditionsHere is a brief description of the various business models most machine and equipment manufacturers use to meet market demand.  

1. Make-to-stock (MTS)

Why this model is used

  • Demand for products is predictable and easily forecasted

How it works for machinery & equipment manufacturers

  • Expends capital to produce goods in advance
  • Capital is bound to the finished goods until they are sold
  • Incoming orders use existing inventory, keeping lead times low

Ideal for manufacturing products that:

  • Are mass-produced at low costs and high quantities
  • Are readily available with extremely low lead times
  • Requires little to no engineering and design

2. Make-to-order (MTO)

Why this model is used

  • Standard products and specifications are clearly defined

How it works for machinery & equipment manufacturers

  • Products are only produced when orders are received
  • Lowers risks of overproduction for manufacturer
  • Increased production costs and lead times

Ideal for manufacturing products that:

  • Cost more, but can be produced in large quantities upon order
  • Requires some engineering and design
  • Can be manufactured and delivered fairly quickly

3. Make-to-assemble (MTA)/Assemble-to-order (ATO)

Why this model is used

  • A flexible model that allows for speed and reduced waste

How it works for machinery & equipment manufacturers

  • Parts and components are pre-produced
  • Assembly only happens when orders are received
  • The manufacturer is ready to fulfill orders instantly

Ideal for manufacturing products that:

  • Are ordered in lower quantities
  • Requires some engineering and design
  • Do not offer options to configure

4. Configure-to-order (CTO)

Why this model is used

  • Enables mass customization and faster response time

How it works for machinery & equipment manufacturers

  • Products configured and assembled according to requirements
  • Standard subassemblies made-to-stock and instantly available
  • Final assembly is postponed until the order comes in

Ideal for manufacturing products that:

  • Are ordered in lower quantities
  • Offer a large number of configuration options
  • Requires moderate engineering and design

5. Engineer-to-order (ETO)

Why this model is used

  • Extremely complex or specialized product or solution

How it works for machinery & equipment manufacturers

  • Project-based work starts only when order is received
  • Comprises a long timeline of design, engineering, and production
  • Final product is engineered according to unique specifications

Ideal for manufacturing products that:

  • Are ordered in low quantities
  • Requires a high degree of engineering and design
  • Has highly specific customer requirements

+1. Manufacturing-as-a-Service (MaaS)

Why this model is used

  • Highly optimized by emerging Industry 4.0 technology
  • Fast, low-cost, high-quality production of almost any product
  • Resource consumption can be kept under tight control

How it works for machinery & equipment manufacturers

  • The manufacturer is equipped to produce anything a customer wants
  • Uses shared infrastructure to reduce costs and improve quality
  • Process expertise instead of products is sold to the customer

Ideal for manufacturing products that:

  • Are highly innovative and new to the market
  • Requires high customization or personalization
  • Needs to be low cost even in low quantities
  • Has fast time-to-market requirements

Different manufacturing complexities

Besides conventional business complexity, your business needs to grapple with evolving customer requirements. Customers are increasingly asking for innovation and customization. Today, leading machinery and equipment manufacturers are using a mix of manufacturing models comprising most of what we covered above. For example, your machinery and equipment manufacturing business could be using MTS for spare parts, CTO for large-scale projects, and ETO for niche but highly specialized projects. 

That means you would require multiple sales strategies for all the business models used. These strategies would also need to consider functions like supply chain, stock management, production, design, engineering costs, and quality control. The amount of data needed for these highly complex strategies, however, far exceeds what legacy systems are equipped to manage.

Forward-thinking manufacturers are now turning to Industry 4.0 era systems to help manage their data and the complexity that comes with the rising number of business functions and sales strategies. These are challenges that a powerful digital sales platform can easily overcome through seamless integration with a manufacturer’s ERP, and existing IT systems your sales depend on (e.g. Salesforce CRM).

Ultimately, it is a strategic choice that leading manufacturers make to meet the demands of the market today, and take advantage of the opportunities that come in the future. That’s because a leading digital sales platform built for manufacturing is built to support all manufacturing models. It comes equipped with seamless integration with your backend systems, and features and functions that cover the full spectrum of manufacturing sales needs. 

Valuable sales data Electrical Equipment manufacturers can extract from their ERP

Valuable sales data industrial Machinery and Equipment manufacturers need to extract from their ERP

The key element here is the sales relevant data that the Digital Sales Platform extracts and organizes from your ERP into an easy-to-use dashboard. With this data, you can easily perform: 

With a powerful Digital Sales Platform in place, you would be able to align your customers' goals with your manufacturing capabilities--and take your machinery and equipment manufacturing sales to the next level. With a powerful digital sales solution like the In Mind Cloud Digital Sales Platform, your automotive manufacturing business can perform better. Your goal can be to reduce costs, increase revenue, improve efficiency or simply to prepare your business with a competitive advantage--and our Digital Sales Platform is built to get you there. 

To find out more about the role digital plays in modern manufacturing sales, download our Manufacturing Sales Handbook here. 

Part of this blog post appeared in an article that was first published on the G2 blog

Manufacturing sales handbook 2021
Sabine Kempe

Written by Sabine Kempe

Sabine - a digital enthusiast at heart, she is dedicated to matching the challenges of manufacturing businesses with the opportunities of a digitalized world.

Leave a Comment

Sign Up For Our Newsletter