The pandemic exposed serious weaknesses in the operations of manufacturers and distributors, not the least of which was the lack of robustness in our supply chains. Six out of ten manufacturers were negatively affected by supply chain disruptions during the pandemic, according to a December survey of manufacturing leaders from SYSPRO. In response, many are looking to shorten the supply chain. After all, the fewer links there are, the less likely one of them may fail. And to get there, the survey found that 70% of manufacturing and distribution leaders are considering digital options like eCommerce. The changes to sales channels are likely to stick, too. McKinsey found that the number of B2B buyers who said that the new go-to-market models forced on the industry by the pandemic would remain grew 89% from April 2020 to August 2020.
Why eCommerce for manufacturing?
eCommerce enables manufacturing companies to sell directly to their customers, which shortens the supply chain. That alone is a big benefit. But there are additional advantages to B2B eCommerce, not the least of which is gaining firsthand information on what customers are buying. By analyzing this information, manufacturers can gain a host of critical insights. For example, they more easily identify and predict market changes, so they can change their product mix and develop new offerings faster than competitors. They can also identify products that, while they may not currently account for much revenue, have a lot of potential for growth.
And it’s not a new trend. According to McKinsey, the percentage of B2B customers who used digital self-service as part of the purchasing process grew from 20% in 2016 to 30% just three years later. What’s more, customers are one of the big drivers, because at least 70% of B2B decision-makers prefer remote human interactions or digital self-service when buying products.
But setting up an eCommerce sales channel is no simple task. You need to have a web solution that will integrate with your catalog, make it easy to update content, and present it in an effective manner for computer screens, tablets, and mobile devices. It needs to automate tax compliance for all transactions and interact with payment processing services. And, of course, it needs to integrate effortlessly with your ERP solution, so you can fulfill orders and capture data.
In that spirit, SYSPRO recently released the Online Business Pack for SYSPRO, a complete, turnkey eCommerce solution for manufacturers and distributors. It’s a great example of the power of our ISV Partner program. We work with ISVs to certify that their solutions interoperate with SYSPRO, and thanks to that program and the relationships we’ve built, we were able to assemble this solution. It brings various best-of-breed software into an integrated package that, of course, plugs effortlessly into the SYSPRO ERP.
However you get online, though, it’s clearly becoming important for manufacturers to open a channel directly to their customers. Does that mean traditional distribution channels disappear? Not at all! Distributors and other channel players establish important relationships with customers to advise on and assemble more complete solutions, helping customers understand exactly which products will meet their needs. They’re a critical piece of a manufacturer’s go-to-market strategy.
But the market is always changing, and manufacturers need to make sure they’re in sync with the trends. Thankfully, getting an eCommerce presence to sell directly to end-users doesn’t have to be a difficult, time-consuming process. With turnkey solutions, manufacturers can be ready to sell directly online in weeks, not months or years.