product shortages

How manufacturers could have avoided product shortages

The global economy is open for business. But not without its hassles. What happens when the business climate is filled with volatility in consumer demands, unpredictable supply chains, and a strained workforce that interfere with your business relationships? You look for a competitive advantage with better forecasting. 

Let’s examine the root cause of product shortages and why implementing a CRM that is tailored to your industry needs and creates a single source of truth for your sales and operations is more critical than ever before. 

 

The Problem

As the world ventures into the recovery side of a global pandemic, many are anxious to return to some normalcy in their daily routine, such as enjoying a cup of coffee or tea in the morning or taking an afternoon bike ride. Unfortunately, for the 64 percent of Americans who start the day with some java, for example, the world’s struggle to keep their product inventory stocked to meet the public demands has resulted in some surprisingly (and disruptive) product shortages. 

“Coffee supplies in the U.S. are shrinking, and wholesale prices are surging, with the hard-hit market bracing for further fallout from a global shortage of shipping containers that’s upended the food trade,” explained Bloomberg contributors Marvin G. Perez, Fabiana Batista, and Manisha Jha. 

It seems we can’t unwind with a Boba tea or fiddle around with a backyard project without running into supply shortages. We’re over a year into the global pandemic, so why are we all of a sudden experiencing product shortages, again? The culprit is likely a combination of flaky consumer behavior, raw materials roadblocks, and poor product forecasting. Here’s why: 

 

The Culprit

Manufacturers believe product shortages are impacted by a combination of things, such as limited raw materials or a lack of workforce. Some experts attribute product shortages to the consumers themselves, claiming that the lack of clarity on consumer demand to be the most significant problem that supply chain bottleneck shippers encountered as a result of the COVID-19. 

Other experts claim depleted product inventory is because of delayed shipments of raw materials and components sourced from Asia. “But supply-chain breakdowns go beyond China. Businesses that import parts or materials from Southeast Asia are finding out that many of those suppliers depend on China for raw materials,” said David Payne. 

But for many manufacturing companies, most of these challenges can be laid to rest by optimizing S&OP processes and enabling increased visibility into customer challenges and opportunities across the organization. When it comes to S&OP processes, too often manufacturers are focused on how they’ve always done things. This means manually updating spreadsheets instead of creating a better, more scalable forecasting process, and then actually validating any optimizations they have made.

Relying on spreadsheets presents a host of problems with fractured processes and inconsistent metrics under normal circumstances. But with the complexities of tight supply chains, the limitations of an S&OP process based on spreadsheets are only heightened. 

Likewise, improving communication and customer 360 across the org will make the difference between manufacturing market leaders and laggards. For example, technology like Service Cloud enables your team to know in real-time when a service warranty claim is filed. Actions like these have the potential to upend your forecast for the entire year, but if you have access to those data insights immediately you can pivot quickly and accordingly. 

 

The Solution

Quick response times require collaborative, streamlined communication not only among key team players but your customers as well. Working from a single source of truth, such as Salesforce Manufacturing Cloud, reinforces predictability, reduces tedious data entry, and tracks every stage of the buyer’s journey. 

“Predictability is top of mind for all stakeholders in the manufacturing ecosystem,” said Cindy Bolt, an expert on Salesforce Manufacturing Cloud. “Customers want assurances around pricing, availability, and delivery; distribution partners want optimized delivery channels; sales teams want pricing based on real-time volume assumptions; and operations teams want to produce and procure components based on the most accurate demand.”

Surveys show that 88 percent of manufacturers need new tools for more accurate forecasting and almost 90 percent consider process efficiencies a priority for manufacturers. We couldn’t agree more. That’s why Manufacturing Cloud is so strategic.

By integrating Quote-to-Cash applications with the streamlined features of Commerce Cloud and the customer-centric automated capabilities of Service Cloud, you’ll create a cohesive, CRM system that provides reliable indicators of potential problems that could delay workflow while highlighting pivotal sales opportunities with customers. 

Using a CRM system that leverages your teams with current data, empowers your customers with self-service tools, and consolidates details of the sales cycle, means you’ll be better equipped to track consumer demands, supply availability, and eliminate the risk of time-draining silos and wasted resources. Learn more about ways Salesforce Manufacturing Cloud can help your business navigate tricky supply chain demands.  

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