How e-commerce self-service can benefit manufacturers in these difficult times

Updated Sep 8, 2021

The manufacturing industry has faced a lot of new challenges lately. Whether it’s the labor shortage, supply chain disruptions, or rising costs — it’s a difficult time to be in the industry. But there are ways to overcome these challenges and be positioned for short- and long-term success. Properly doing so can get OEMs out of the mindset of just surviving and instead thriving.

It’s not breaking news that digital transformation is taking over nearly every industry. And while it’s easy to see why that trend makes sense for the future, it’s not always clear how it helps in the present. Digital self-service investments, like e-commerce, give manufacturers the ability to adapt to any problem.

We’re going to discuss some of the main issues facing the industry right now and the role e-commerce plays in solving them.

Labor Shortages

Problem: Manufacturers are facing record-high job openings right now. According to the Bureau of Labor Statistics, “There were a record 9.3 million job openings at the end of April 2021, resulting in a record-high job openings rate of 6.0 percent.” This has resulted in delays when customers are trying to reach an understaffed call center, or a technician is needed, and one isn’t available right away.

This problem causes the speed at which you respond to customers to become constrained and ultimately leads to a loss in revenue. But the most obvious problem this causes is on the shop floor. The production of goods will inevitably be slowed as job positions remain unfilled.

Solution: Providing a self-service option for customers helps to alleviate some of the problems caused by labor shortages. Instead of having to call to find information, like product price and availability or to create an order, customers can use an e-commerce site or portal to find information on their own. Automating routine processes like this not only improves the customer experience but also lessens the strain on employees.

[RELATED: Parts pros share insights on how they're battling the industry's shortage]

Supply Chain Disruptions

Problem: Supply chains in every industry have been negatively affected due to the pandemic and a series of other factors. But no industry has been hit harder than manufacturing. Sixty percent of manufacturers said they faced delays from suppliers, which led to delays in production and shipping. The demand for products is there though. As the economy opened back up demand has soared, but supply has struggled to keep up as OEMs try to deal with bottlenecks — both literal and figurative.

Solution: This series of factors have hurt manufacturers and left them scrambling to try to catch up to demand. So what can they do to improve this situation? One strategy is to focus on customer experience. For most manufacturers, at least some level of delays have become inevitable, but keeping customers in the dark doesn’t have to be. Being transparent with customers when their orders are delayed and letting them know when they’ll arrive helps make the best of a bad situation.

There’s no better way to automate that process than with a digital self-service tool like many e-commerce sites provide. Customers curious about their order status can go and check for themselves and have peace of mind. It also allows for emails to be automatically sent once an order has shipped. Giving customers this option reduces call volume to the call center and increases customer satisfaction.

Rising Costs

Problem: The cost of materials has been increasing and placing a strain on manufacturers. For example, since March of 2020, steel prices have increased as much as 215 percent! Lumber has also seen a historic spike in prices. These new costs lead to products costing more to manufacture, and the end price for the customer increases. But if a manufacturer doesn’t have a quick and easy way to update their prices, customers can still be shown the older price. Doing so leads to one of two things. Either a customer is told they need to pay more than they thought, or a manufacturer is selling something at a small margin. Neither situation is ideal, but thankfully both are avoidable.

Solution: The best way to solve this issue is to have an e-commerce website that’s fully integrated into an ERP. This way prices are instantly updated, and there is no confusion with customers. There’s no longer a chance that a salesperson could provide an outdated price because they’re using an old price list. This way margin dollars will remain constant even as prices increase. This increased transparency with customers is one of the best ways to make sure they keep coming back.

Conclusion

Every organization has been impacted by the tumultuous recent times, and it’s understandable why manufacturers are generally in a mindset of survival. There are so many constraints on them right now, so it can be hard to have a long-term outlook. But looking past simply surviving and investing in technology is how OEMs can make sure they’re prepared for whatever the next problems may be.

Companies that emphasized e-commerce investment years ago were still affected like everyone else, but they were more insulated from all of the factors discussed earlier. The prioritization of e-commerce makes labor shortages more manageable, supply chain disruptions less impactful, and rising costs easier to handle. For manufacturers, it’s time to go from trying to survive and instead to reach their full potential and begin to thrive.

Kris Harrington is the president and COO of GenAlpha Technologies.  During her time with OEMs in the mining industry, Kris and the other founders of GenAlpha saw a need to find a better way for B2B brands in manufacturing to do business.  This led to the development of an eCommerce solution for manufacturers and distributors who want to grow their business online.  For more than 10 years, the experienced team at GenAlpha Technologies has been helping equipment manufacturers repurpose their bills of materials, 2D and 3D engineering data to make it easier for customers to safely identify and purchase parts.

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