Contract Manufacturers are vital in the supply chain of manufacturing. While many in the manufacturing industry treat it as just an outsourcing entity, churning out goods for others, contract manufacturers have been busy adapting to the rapidly-changing landscape that Industry 4.0 has brought on.
Have you ever walked into a grocery store to buy something, saw the number of options available, and then spent an hour comparing every single one until you were sure you were getting the best product? Or refused to buy a product in-store until you had done a detailed comparison online?
In this data-driven age, this isn’t uncommon. This can be seen through the power of review sites; various research conducted has put online trust in review sites at a 80-90% range. Everyone is bombarded with information, and trying to find more information that will tell them which information is best.
Industrial B2B sales have been going through a transformation in the past century, with user data rapidly moving online and expanding immensely in scope. When longer buying cycles on the buyer side are combined with advanced prospect targeting on the sales end, we can deduce this: buyers will expect more.
We hear this often: over 90% of the world’s data was generated in the last two years. According to The Economist, 'Data are to this century what oil was to the last one: a driver of growth and change.' An IDC Paper talks about 163 zettabytes of data a year by 2025. Even in Industrial B2B sales, data has shown its impact.
The business world has changed remarkably over the last 20 years. From the times where there was a dominance of large corporations, to lean start-ups littering the landscape, to the current digitisation of business units; the world is dealing with unprecedented levels of competitiveness and upheaval.
Let's talk about negotiations in manufacturing. Where there is tendering, there will always be negotiations and renegotiations of a variety of factors, from pricing to delivery timelines. In the contract manufacturing industry, where a single project lasts for at least a few years and products are manufactured in mass quantities, that negotiation process becomes crucial to ensuring margin retention over the contract lifespan .
When it comes to the competitive world of manufacturing sales, there are two factors that can affect your quote-to-close rates: speed of response, and accuracy of quote. Let us look at the first point, one that can plague many manufacturers with complex configurations and calculations.
Sales is a tough job. They need to chase prospects or handle accounts, pitch products and solutions against competitors, and then negotiate prices to make the right person sign on the dotted line. This process itself can take weeks and often months.
Now imagine that your product isn’t one single item, but is millions of tiny pieces that make up one product. Or that your offered product doesn't even exist yet and you have to figure out how to best serve your customer whilst keeping profitability in mind.
With less than a month until the end of the fiscal year, it is crucial for manufacturers to ensure that they end the year on a high note, mirroring industry expectations. This includes ensuring productivity levels stay high, overhead costs stay low, and that your allocated budget is used to maximise revenue in preparation for the next fiscal year.
Q4 is interesting from a budgeting point of view, especially, as frugal budgeting measures in the first 3 quarters of the year can lead to a surplus that needs to be used within Q4. This isn’t indicative of poor budgeting; in fact, it’s an opportunity for manufacturers to use that excess budget to lock down measures for the next year.
Choosing a Configure-Price-Quote solution is complex. Your manufacturing business might have already lost money on inaccurate quotes and RFQs lost to competitors; choosing the wrong CPQ provider can cost you more revenue.
The question of "How quickly can the CPQ solution be implemented?" can become a main decision driver for businesses in fast-paced environments. From our years of experience, we can tell you that it depends on 3 main questions.