Manufacturing Cloud Part Two - Getting Serious About Sales Forecasting
If you’re under the age of 50, you may never have heard of the Fuller Brush Man. Baby boomers and their parents know him well. The Fuller Brush Company was formed in the early 1900s, manufacturing a line of brushes for virtually any use, from cleaning a felt hat to cleaning a floor. The founder, Alfred Fuller, was the first salesman. He would take an order from a customer, go home, literally make the brush that night, and deliver it the next day.
The company’s marketing plan was based solely on door-to-door sales and the salesmen (only men were hired because, back then, men worked and women stayed home) were trained on how to turn a cold call into a sale. They were also trained to observe their customers, to note what the customers bought and didn’t buy and why. That was the key to not only their own success but the company’s success, as well. Armed with such empirical data, the salesman could refine his approach for the next customer and also provide valuable feedback to the company so it could respond to requests for new products.
No Substitute For Customer Knowledge
The door-to-door cold-call method of selling is long gone, particularly in the manufacturing industry, but the notion that sales teams know customers best is still a core principle today.
Of course, manufacturing is highly specialized; sales and operations planning teams (S&OP) oversee production flow based on forecasts, using forecasting practices that would make Alfred Fuller’s head spin. What can often be undervalued in a modern S&OP team is that boots-on-the-ground knowledge of the customer that only the sales teams have.
Many manufacturers have organizational structures that inadvertently create data silos. This wasn’t a serious impediment to business when a company’s customer base rarely deviated from demand forecasts. Today, as we know, the customer is far different – more demanding, with higher expectations around service, and perhaps less loyal, at the same time, in the face of delivery delays.
Companies like Salesforce have seen and responded to the need for greater customer awareness; Salesforce is the world leader in customer relationship management (CRM) solutions that gather and analyze data to provide a holistic view of a customer to sales and service teams. For a manufacturer’s back end, where operations and production planning lie, enterprise resource planning (ERP) software solutions have been developed to handle inventory, delivery, manufacturing, and finance, again, through data management.
A Key Survey Uncovers A Glaring Need
Because the two areas – CRM and ERP – are often siloed, their data is rarely integrated within the S&OP function. Consequently, sales teams – the ones with the boots-on-the-ground ¬— don’t have access to data from ERP with which they could generate more accurate and meaningful sales forecasts. As a result, their input is often downplayed by the S&OP personnel, especially when it comes to run-rate business.
However, Salesforce has created a solution to this problem. Manufacturing Cloud was released in the fall of 2019. The company’s product research team had surveyed more than 100 medium and large enterprises, looking for some innovative applications of Salesforce. What they discovered were failed attempts by the companies to create some means to model and forecast against run-rate business.
Andrew Witherspoon, a Salesforce V.P. of Manufacturing on the company’s Go To Market team, says that Manufacturing Cloud is “designed to enhance the ability of manufacturers to manage their business both from a product perspective as well as a forecasting perspective.”
Building off Sales Cloud, which helps companies manage their sales contacts and leads to generate new business and forecast against that, Manufacturing Cloud adds the capability to manage run-rate business. “or that 80% of the business that is assumed to come in the door,” as Andrew puts it.
Put the two elements together and a complete revenue and product forecast emerges which, in turn, feeds into a supply chain plan.
Existing Solutions Don’t Cut It
Companies have used various methods to bring past sales and production data out of ERPs, using spreadsheets, demand planning tools and other means, all of which have their limitations; spreadsheets are static, not collaborative and prone to error (garbage in, garbage out). Demand planning and ERP systems, while having strong functionality, are not easy to use.
Manufacturing Cloud takes care of that. Being built on the Salesforce platform means it’s inherently collaborative (data is not only visible to everyone but changes or updates are easy and seen immediately), completely mobile and includes the strength of Einstein advanced analytics. So, functionality is high but the product also allows sales teams to provide meaningful input into run-rate forecasts.
This last point is magnified by a situation that Andrew Witherspoon encountered with a large heating, ventilation and air conditioning company in the U.S. “The company didn’t think it was getting credible information from its sales teams around run-rate business even though the net new business data from sales was accurate. So, the company modeled run-rate business themselves. Turns out they were off by $200 million per quarter on that business going through their distributors,” he explained.
The MuleSoft Connection
Salesforce is using data integration technology from MuleSoft, acquired in 2018, to create a two-way link for production data to flow from ERP to Salesforce CRM and quotes, opportunities and sales agreements from Salesforce to flow back to ERP – helping to create a complete picture of a particular customer or market segment.
Manufacturing Cloud is a powerful tool and early customers have been providing very positive feedback to Salesforce. Gerent LLC has been designing and implementing Salesforce technology solutions in manufacturing for over a decade. We are specialists in all aspects of the Salesforce platform and we recognize the strength of this latest product designed expressly for the manufacturing industry. So, get in touch with experts who can help your S&OP teams create accurate plans, going forward. We’d be happy to answer your questions!