The right pricing strategy is a critical component that companies can’t afford to overlook and is one of the most important aspects of maintaining profitability. In the manufacturer-distributor-customer value chain, one of the manufacturers most pressing challenges is being able to mark up prices in a way that helps maintain profitability while not pricing that customer out of the market. This balance is getting harder to achieve in the current B2B business environment, where the next competitor, price comparison or huge online retailer is literally one mouse click or screen tap away.
Focused on serving their customers while maintaining healthy profit margins, manufacturers have to effectively balance the cost of manufacturing with the company's profit goals. Goals that are hard to attain if the company isn’t using solid pricing strategies.
Integrating Data Your Pricing Strategy
As data continues to proliferate right along with the number of technology tools to help harness that data, companies are learning how to leverage that information across multiple departments for maximum success. Accurate data can more precisely reflect the cost of manufacturing by considering critical issues such as seasonal raw materials fluctuations, capital equipment depreciation and labor concerns. Manufacturers should be generating these cost equations on a monthly basis to forecast cost fluctuations and react in plenty of time to adjust pricing.
Gain an Edge on the Competition
Even those manufacturers that think they have the pricing game under control will surely face a new competitor, get hit with a new market trend or face another economic challenge in the near future. Look what Uber did to the taxi business. Manufacturers of the future will also understand that effectively engaging customers requires true innovation in executing the value chain. Traditional approaches to inventory, logistics, pricing and rebates will be reimagined through the application of advanced analytics and technology innovations. Given the importance of data, analytics and technology to both engaging customers and executing the value chain manufacturers will also need to leverage IT to truly energize, not just enable, their business.
Data management is central to keeping track of your costs throughout the manufacturing process. If data is properly recorded and accessible to every link in the chain, managers can touch base with their product at every stage, helping maximize efficiency, address problems quickly, and improve customer satisfaction.
How you collect and process data generated throughout your manufacturing processes makes a big difference. Investing in tech like smart and IoT-powered sensors can reveal the kind of information that you need to refine processes and boost productivity.
Blockchain is also beginning to realize its potential as a tool for traceability, and those willing to take a chance on a technology that isn’t overseen by any intermediary could see improvements to the integrity of their chain, and cut costs associated with the repeated verifications required throughout the shipment of their finished goods.
Investment in big data analysis can also be a massive boon to your customer service. In addition to furnishing businesses with the ability to track orders and deliveries more effectively, companies can use data to better understand their customers’ needs, and get ahead of demand to make your customers’ experiences as smooth as possible.
No one expects manufacturing and supply chains to run perfectly 100% of the time. But if you have more data at your fingertips and a clearer overview of your operations, then you can pass that transparency on to your customers, keeping them in the loop when things aren’t going to plan, therefore building trust and ultimately improving customer satisfaction.
All of this data, no matter how you generate or utilize it, can all be added to your company’s collective database. The bigger your base, the more you’ll be able to make accurate, timely forecasts of raw materials cost, customer demand, and finished product delivery.
Being prepared is critical to effective manufacturing processes, and the more you know, the better prepared you can be. Smart business intelligence platforms are increasingly able to produce precise, actionable forecasts to help you manage inventory, minimize disruption, and plan for “what if” scenarios months down the line. By examining data generated by past events, you can be proactive and take a strategic approach, instead of reacting to events as they happen.
At Land Link Traffic Systems we have been utilizing data analytics for years to increase our clients operational effectiveness and efficiency. To quote Land Link's founder, "What doesn't get measured doesn't get fixed". Now more than ever, data will become the key ingredient in most every aspect of the manufacturing and supply chain processes. Contact us today to learn more about how your company can benefit from data analytics in your operations and CRM applications