Modern manufacturing is a progressive sector that continues to benefit significantly from advancing digital technology. Machine learning and AI in manufacturing have had a transformational impact upon many aspects of the industry, from increasing workforce productivity to improving throughput, energy consumption, and profit per hour.

According to McKinsey, 50% of companies that embrace AI have the potential to double their cash flow. Manufacturing leads all industries here, due to its significant reliance on data. Today, AI in manufacturing is proving to be an increasingly important lifeline for sales teams – guiding them through administrative challenges and ultimately helping to bring more deals safely over the line.

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New to AI in manufacturing sales? Let's take a look at how manufacturers are rethinking their sales strategies through the lens of Industry 4.0 digital initiatives, so that businesses can build deeper relationships with customers and ultimately, drive predictable revenue.

Modern manufacturing sales: What’s driving the need for change?

Despite uncertainty and disruption caused by the pandemic, the manufacturing sector continues to grow. Consequently, the buying processes involved have become more complicated and lengthier, with more stakeholders involved in the sales cycle. Here are some of the key issues faced by manufacturing sales professionals today.

Supply chain disruptions

Supply chain disruption, increased by concerns of idle and depleting stock, have caused multiple fractures from production to distribution and last mile delivery experiences. To mitigate the risk of declining production, manufacturers are now looking at alternative suppliers and distributors outside severely affected pandemic regions who can provide critical materials for stabilizing production.


Impact on business growth: Rising cost of operations

Price hikes, particularly of raw materials, impacts the whole supply chain, causing massive revenue losses as manufacturers look to pass the extra cost on to the customer. Similarly, restrictions on transportation and geopolitical instability have also hit profitability, as stock flow efficiencies are impacted. Many manufacturers are now looking at spare-parts inventory, which can be repurposed for new-product production to revive a fraction of revenues.

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Demand fluctuations

At the start of the pandemic, panic buying took over, leading to a sharp increase in the demand for essentials and perishable goods. Over time, customers began to opt for products that are more personalized to their needs, instead of commoditized products. This newly fluctuating demand calls for manufacturers to venture into made-to-order products to win and keep their customers in the longer run.

Impact on business growth: Inaccurate demand-supply match

Within manufacturing, traditional methods of forecasting often fail to take into context the aggregate demand across product categories, target markets, and dynamic customer segments, which may have different needs based on their market potential. Traditional forecasting also struggles to factor in long term business goals, true customer sentiment or the complexity of the distribution plan and supply chain environment. As a result, it can lead to a shortage or oversupply of inventory that has a direct impact on revenues and growth projections due to rising costs, reduced profits, and eroding customer confidence.

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Evolving customer expectations and shift to multi-channel sales strategy

Today’s customers are looking for dependable, transparent engagement and this expectation needs to be met with appropriate planning and proactive communication. To stay closer to customers, running smaller D2C ecommerce stores enables manufacturers to avoid depending on wholesalers and resellers so that they can benefit from the increased profit margins. Additionally, they retain more control over distribution and can eventually look at passing on these benefits directly to the end-customer.

Conversely, involving more channel partners helps many manufacturers extend their reach, and gain control of new markets via co-selling and co-marketing. While D2C offers its own advantages, partner-manufacturer relationships are still being pursued as the primary strategy.

Impact on business growth: Rise of new digital sales channels

The modern buyer expects their products quickly, without error or the need for excessive interactions, as they have to repeatedly explain their requirements to multiple reps, which can potentially lengthen the sales cycle and risk deal closure. Investment in tools like self-ordering platforms, AI-powered chatbots, and an AI-based manufacturing CRM helps with personalization and an omnichannel experience to get more interested, better qualified buyers into your pipeline. By not doing so, sales teams can risk losing bigger sales deals and customers that are hard to impress.

Rise of digital adoption and automation

Industry 4.0 technologies, such as IoT, robotics, 3D printing, 5G, CRM systems, and smart manufacturing with AI are unlocking the potential to automate lengthy production cycles, manual administrative business processes, complex lead-to-cash cycles while streamlining distribution.

AI-powered demand planning and forecasting is expected to bring huge improvements to demand projection, leading to better aligned supply chains. A study from IFS reported that 40% plan to implement AI in manufacturing for inventory planning and logistics, with another 36% for customer relationship management.

Impact on business growth: Siloed data, poor adoption, and costly upgrades

Business growth can be impeded by a variety of factors linked to sub-optimal investment in  technology. Conversely, poor adoption of technology by reps is common, which impacts team cohesion and efficiency, aggravating budget issues if clear ROI goals are not set.

Many manufacturing sales teams have also been dealing with legacy systems – some more than two decades old – representing a huge impediment to their success in terms of higher maintenance and IT upgrades. They’re also disadvantaged by limited integration opportunities, leading to siloed data, and a restricted customer view.

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AI in manufacturing CRMs: 3 approaches for complex sales cycles

Considering the volume of unstructured data and complexity of distribution and partnerships, modern manufacturers need AI to do the grunt work for them. But according to a research conducted by Freshworks, only about 12% of manufacturers use an AI-powered CRM tool, while many still think that AI is too costly or are put off by adoption concerns. In order to improve their existing sales processes, manufacturers must embrace AI, given the impact it can have on their growth strategy.

From obtaining a clear understanding of how hot or cold a lead might be, to scaling up growth strategies based on AI recommendations, manufacturers like Kongskilde are able to lean on the guidance from an advanced CRM to make smarter decisions. 

Here is how AI improves the sales outcomes that can be achieved, when embedded in a modern manufacturing CRM:

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1. Improved product quality and demand forecasting

Insights from AI powered manufacturing CRMs can be mapped with historical forecast data to understand what product bundles you should be manufacturing and when. By using AI to enhance operational tasks and ML to improve forecast accuracy, manufacturers can reduce forecasting errors, which results in a subsequent decrease in revenue leakage. Poor forecasting results in higher inventory carrying costs, lost revenue, lower CSAT, and reduced margins for both manufacturers and channel partners. 

When it comes to improving product quality, taking feedback from sales teams requires an ecosystem that enables co-creation from partners, product, IT, and sales teams. Through text sentiment analysis, conversational chatbots, smart categorization of issues or cases integrated in a manufacturing CRM, product teams can focus on consolidating this feedback and drive action.

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2. Customer churn prediction

For manufacturers that aim to maintain high customer lifetime value and consistent brand loyalty, identifying those who are likely to churn requires considerable analysis and effort.

Many times, loyal customers are overlooked in terms of discounts, rebates, credit terms or goodwill gestures. It might also be difficult to analyze your top accounts with issues, such as inaccurate customer data, multiple line-of-business deals with the same customer, weak or non-existent attrition analysis, if your CRM is clunky and too small for your organization.

With AI embedded in a manufacturing CRM, not only will these customers be highlighted as deserving of special attention, but you can also rely on near-perfect visibility into high-risk customers that are at the risk of churning. Pull valuable customers back from the brink of leaving by rewarding them with attractive contract renewal offers and newer products.

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3. Guided selling for complex deals

Guided selling – based on AI-generated prompts –  is often a sales-empowered capability that suggests the best content (such as datasheets, win stories, and global success stories) along with recommended actions and tactics in any situation for greater deal visibility. Harnessing algorithmic insight, a guided selling methodology will give each rep a calculated “best next step” for each deal. Rather than relying on instinct, experience, or even established best practices, the rep is guided by deep, data-driven insights.

 In long-drawn deals, manufacturers expect their sales teams to have a reliable plan that moves deals forward. Adding AI in manufacturing CRMs automates complicated processes with a set of playbooks and blueprints to support consistent selling, which is constantly mapped with historical performance against buying patterns, relationships, and present market conditions.

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The cost of not using a modern manufacturing CRM

A dependable manufacturing ERP provides the bedrock of back-end processes – handling the system of engagement details of shipping, order fulfilment, billing, supply chain management, and more. However, when used in isolation, an ERP cannot reach its fullest potential.

ERP data is best optimized when fully integrated with a customer engagement tool like a powerful, AI-based CRM that connects operations with sales, marketing and service to record activities like customer interactions, marketing campaigns, revenue closed, and ticket details.

While both tools are unique in what they do, they work best when they are tightly integrated. But where does one start and the other stop? Here are some of the benefits that a fully integrated ERP and CRM offer to manufacturing sales teams.

1. Better access to critical manufacturing processes

In the age of Industry 4.0, there’s no reason for important business decisions to be made without real-time data. By investing in a manufacturing CRM for integrating front and back office processes – from a customer enquiry to finance and invoicing–  sales reps can easily check in on order status, make changes to the order in real-time with a view of the overall revenue and profitability impact to the business. This approach helps manufacturers get complete clarity by accessing one version of the truth.

Solves challenges like: Forecasting issues, poor customer relationships

2. Accurate quoting for faster approvals

A manufacturing CRM enables sales reps to take proposals and create associated orders fast, in one streamlined, self-contained process. Additionally, the sales rep benefits from better insights on order processing. This means that they can act quickly to preserve customer relationships if they see any issues developing within the fulfilment process.

Automation in approvals involves built-in workflows that send out notifications and email reminders to stakeholders involved, like finance, purchase, and legal, drastically reducing the margin for error and delay. Preparing dynamic quotes with a manufacturing CRM that integrates seamlessly with an ERP gives a rep the ability to view past orders with the particular customer. This gives more context of the preexisting relationship, enabling them to utilize appropriate pricing (discounting if necessary) to create accurate quotes that reflect true demand.

Solves challenges like: Loss of critical deals, sluggish comprehension of market trends

3. Improved collaboration from stronger channel sales management

Finally, having a CRM onboard offers scope for improved channel performance with more pricing and quoting autonomy. Complex manufacturing channel sales can also be streamlined with innovative incentive programs for greater engagement across the distribution channel. 

When it comes to incentivizing distributors, a personalized approach that rewards successful past interactions along with their reliance on technology and command over new markets should be adopted. However, in order to achieve this, end-customer visibility must be obtained, which can prove to be problematic without the combined leverage of CRM and ERP systems.

Solves challenges like: Poor customer experience and retention, ineffective distribution coverage and strategy

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AI in manufacturing: Step up to the future of sales

Manufacturing is at a point of real revolution and reset. Lasting changes, accelerated by the pandemic, are still being absorbed, with markets and supply chains adjusting and consumer expectations continuing to shift.

AI in manufacturing CRMs help in achieving the dexterity, intelligence, and agility that local sales teams need to ensure long-term revenue growth and profitability. The benefits will only compound, with the deeper insight and accuracy that more prospect and customer data provides. This will enable ongoing improvements for stronger channel partnerships, enhanced customer experience, and better productivity as tools and processes are continuously refined.

For manufacturers looking to advance their growth, it is imperative that they work toward being more reliable and profitable with a future-proof, data-driven sales strategy. It's time to act decisively and embrace AI in your manufacturing CRM.