Lean manufacturing is all about eliminating waste, where waste is “any activity that does not add value from the customer’s perspective.” Pretty easy concept, but much harder to actually implement.
Thankfully, providing value to the customer isn’t only about higher quality products and faster time to market. In fact, some manufacturers have pivoted to a strategy that has nothing to do with production itself. According to data from a recent McKinsey report, certain manufacturing sectors have seen their “share of revenue and employment associated with services run as high as 55 percent.”
That’s right: Some companies are relying on services — everything from training to rentals to maintenance — for more than half of their revenue. For an industry that’s supposedly all about making stuff, that’s an insane number.
I’d imagine it’s also a refreshing number for the small and midsize firms who, in aggregate since 1990, have posted negative growth. Without massive amounts of capital, after all, manufacturing can be a hard business.
If you’re considering expanding your manufacturing company’s core offerings to include one or more services, Salesforce can help make the transition a success. To help you brainstorm what those services might look like, here’s a quick breakdown of what the platform can do.
How Salesforce can help power manufacturers’ service offerings:
Training, implementation projects and leased talent
Traditionally, manufacturers keep track of their products and inventory in their ERP. But as soon as you venture into the world of services, you’ll need a different kind of system — one that allows you to schedule and track employees’ time. With Salesforce, you can tackle resource allocation in a variety of ways, with third-party apps like Precursive making it especially easy.
Precursive’s main interface features a sortable calendar view that shows you every member of your team, the days/times they’re booked and on what projects. This allows you to make sure nobody gets double-booked and empty hours don’t accidentally go to waste when they could have been filled.
A focus on services means you’ll also need to develop new strategies for revenue forecasting. Unlike with pure production, you’ll have to take into account things like changes to project scope and projects that end under or over budget. In other words, you won’t be able to forecast based only on deals sold — you’ll need to track hours. Salesforce gives you the power to do so, and — with the right setup — allows you to generate a report that calculates revenue from your team’s logged and projected hours.
Depending on what your company manufactures, adding maintenance as a service could be a lucrative way to drive revenue, especially if you’re willing to work on products that didn’t come from your own shop floor. Items with a traditionally long lifespan — heavy machinery, for example — will always need repairs.
But coordinating a team of technicians is no easy task. You’ll need to make sure the right person is sent to the right job, with the right parts in their truck. Enter Field Service Lightning, Salesforce’s on-site support solution that automates essential aspects of field service coordination — everything from scheduling service appointments and dispatching mobile workers to tracking vehicle locations and product stock. Properly implemented, it’s a tool that will give your company everything it needs to provide a world class maintenance experience.
This one could be a no brainer. If your company manufactures an expensive product that the average consumer or business will only need on occasion, consider offering a rental service. Those who had previously been on the fence about making a purchase will likely jump at the chance for a more affordable option.
Plus, tracking equipment rentals in Salesforce is easy thanks to the “Asset” object, which allows you to reference an individual product by its serial number. You’ll be able to see which account has a given asset, when their rental expires, etc. Simple.
Obviously, there’s a lot more Salesforce can do to help you launch a number of different service offerings, but it’s okay to start small. Examine your business, reflect on your goals and explore your options. What do you hope to accomplish by pivoting your business away from pure production? Once you’ve got a sense for that, let us know. We’d love to help transform your initial thoughts into a strategy for success.