It’s the customers’ world; we’re just living in it. In all seriousness, companies now more than ever before must orient their operations around rising to ever-accelerating customer expectations. The product-driven mindset — in which manufacturers produce a certain volume of the quality products based on forecasted demand — is no longer agile enough to cut it in the increasingly customer-centric business climate.
Here’s more on the importance of achieving customer-driven manufacturing and how to go about doing so.
How to Figure Out What Customers Want and Need
Your ability to meet and exceed customer demand begins with your ability to drill down into data to understand buying behavior, buyer feedback, order fulfillment patterns and more.
Advanced sales analytics allow employees across an organization to ask questions of data and pull actionable insights, which in turn fuel more informed decision-making about how to optimize processes with the customer in mind. Manufacturers today can also harness artificial intelligence-driven insights using tools like SpotIQ from ThoughtSpot, which can automatically uncover previously hidden trends and business drivers. After all, only when employees are aware of these patterns can they act on their findings.
Meeting the Demand for Increasing Customization
The name of the game in manufacturing and supply chain operations today is agility. Companies that are equipped to respond quickly and efficiently to fluctuating customer demand will gain a competitive edge over less-flexible competitors.
This represents the key difference between make-to-order (MTO) manufacturing and make-to-stock (MTS) manufacturing. According to a research paper for the Journal of Industrial Engineering and Management, “In MTS, products are stored in the warehouse until they create demand for products.” Then customers are able to place orders and receive their products. The primary advantage of this model was having a warehouse full of inventory ready to go — but the flip side is that companies could easily end up with an excess of “deadstock” if production outpaces demand.
MTO manufacturing aims to be more agile — production begins after a customer order is received based on their desired characteristics. There are a few potential advantages here, like the ability for customers to have more say in the customization of products, and the lack of warehousing needed to hold already-made products. The trick here is ensuring production and delivery time are expedient to satisfy the customer.
The good news is manufacturers don’t have to choose just one or the other; it’s possible to harness some of the advantages of both strategies.
While it may not be feasible to make every product to order, it’s worth considering and embracing the benefits of mass customization, or “the ability to provide customized products or services through flexible processes in high volumes and at reasonable low costs.”
The ability to customize certain products for customers can serve as a competitive differentiator, giving clients a reason to buy your products rather than a generic alternative. Many people appreciate the ability to semi-customized an order, like when furniture companies are able to offer various options for fabrics, wood types and configurations — rather than manufacturing just a handful of pre-determined pieces.
Improving Products to Boost Customer Satisfaction
As Dataconomy shares, BMW Group is harnessing data insights to “detect and fix vulnerabilities that show up during the manufacturing process.” Because prototype vehicles contain over 15,000 data points, it’s important to have data analytics software capable of functioning on such a large scale.
BMW crunches the numbers on vehicle systems ranging from transmissions to suspension systems and brakes to identify and troubleshoot faults before customers ever see the car. The result? Customer is satisfaction is higher.
Customer-driven manufacturing in action means taking into account customer behavior and feedback to optimize production, two examples of which include offering mass customization options and troubleshooting problems before customers receive products.