How B2B Enterprise Services Can Solve Manufacturing Pain Points

Everyone is saying that the manufacturing industry is in recession and profits are getting lower and lower. The price of PVC increased by 60%, glass by 40%, plastic by 30%, aluminum by 30%, iron by 30%, carton by 30%, stainless steel by 40%, and freight by 35%. In addition to the increase in the prices of these basic raw materials, the prices of PCBs and semiconductor components are also increasing, and now even LCD screens are going up. In 2016, an industry-wide supply chain price hike and out-of-stock storm struck, which also put China's manufacturing industry under huge cost pressure. In addition, rent and labor costs have risen, not to mention.

The electronic design and manufacturing industry is very hard, in addition to the cost pressure, there are also a lot of heartache and pain. For future development, manufacturers need to accurately analyze pain points and find effective ways to deal with them.

Five Pain Points

Pain Point 1: Traditional hardware customers are not good enough, where can I find new customers? The classification data of the HWTrek project shows that electronic design and manufacturing manufacturers are facing from standard specifications (such as computer mobile phones) to more customized product requirements without standard specifications; medium and large customers (the top ten PC customers previously accounted for 85% of the market share) ), and now Apple and Samsung together are less than 30% of the market. In the past, as long as manufacturers made smaller, faster and cheaper products or modules and followed the standards, they could get orders. But now they have encountered the bottleneck of traditional customer growth.

Nowadays, the new forms of customers emerging from the Internet of Things are different. They may be companies from the medical service industry, textiles, furniture and other industries. They are no longer the typical consumer electronics brand customers before, nor do they have Traditional hardware procurement windows or hardware engineers, etc. With the rapid increase in the number of innovative customers of the Internet of Things, it will become more difficult to accurately find these customers and complete the service in the traditional way.

Pain point 2: It is more difficult to convert new customers into orders. Even when customers are found, IoT requirements are often non-standardized, across different technologies, and not just in terms of electronic design. The contact window on the customer's side also often does not understand how the supply chain works. Therefore, it is often heard that the factory side is reluctant to accept innovative customers. The reason is not only the small quantity, but also the high time and labor cost to convert it into an order. Today, it is impossible for a factory's business to take two or three months to incubate a single small and medium-sized customer. The knowledge of the business is also applied across several different industries, and it becomes more complicated to analyze the needs of customers. When the market demand cannot be clearly seen, the factory is reluctant to invest such time and manpower.

Therefore, many large international exhibitions are now promoting "offline matchmaking" between exhibitors and visiting customers. Is there a more efficient way besides offline? Can manufacturing also be moved online? The actual situation is that the electronic design manufacturing industry is a highly customized service industry, and the actual transformation cannot be completely completed on the Internet. However, by using online platforms and software, there must be a way to speed up the transformation of manufacturing orders.

Pain point three: customer communication and management after the order is difficult. The order is just the beginning. In reality, customers of electronic design manufacturing manufacturers keep changing their specifications, and there must be problems in the production process, electronic materials or the design itself, and the schedule must be constantly adjusted. Generally, the B2B platform of the manufacturing industry cannot touch such a problem. Usually, it ends when the order is generated, and the profit is the one-time share or fee. In the fast-turnover standard product industry, this can be established, but it is not deep enough, and stickiness is also a problem. Therefore, in order to penetrate into the electronic design and manufacturing industry, it is necessary to further solve the problem of customer communication and management after the order.

Traditional third-party intermediaries use a large amount of human input to coordinate the communication between customers and factories and production development management in a manner similar to a consultant, while large companies such as Dell have countless project managers to play different roles. stage supervision. However, the new form of IoT enterprise customers are different. This group of enterprises is not a hardware vendor, but a service provider. Their business core is often services, software, etc., and they do not need to build a huge hardware team. Then all the burden is left on the factory side. For factories, the profit has increased from 2-3% of computers and notebooks to 15-25%, but the number of serving customers has increased and the difficulty has also increased. For such customers, after the order is placed, the pain point on the supply chain side is that they need to spend more time and energy to coordinate and connect by relying on Email and Excel forms to manage communication.

Pain point 4: How to reuse experience and share R&D investment. After successfully acquiring customers, converting orders, producing shipments, and receiving payments, the question for factory owners is how to allocate these costs for new customers and new product development or production lines. In short, it is to find customers with similar technical needs, but also at a similar stage, and connect at the right time. For example, in a factory that has never made drones, after receiving an order for drones from a small customer, the next step must be to find more drone products to make. The previous basic investment in mold, power control and flight control can be shared. But not all drones can be undertaken by them, and new technologies such as obstacle avoidance and vertical flight have to be re-evaluated. Therefore, the factory has higher requirements than the general industry for "accurate customer needs".

Pain point five: I have to cooperate with more third-party partners. Let’s take the drone project as an example. When making notebooks in the past, there were actually standard architectures connecting the modules, and the collaboration requirements between manufacturers were actually within the system. At most, fingerprint recognition, camera with higher pixels, etc. will be added. But drones need to be more than mere electromechanical control, but also need to engage in motors, sensors, power management, wireless transmission, flight control and so on. No matter which part of the factory, it has to cooperate with multiple parties in the supply chain. More time and human resources are invested in resource docking and communication. These are intangible costs and costs that did not need to be invested in the past.

How can B2B enterprise services solve these pains?

The overall production and manufacturing industry is in a downturn. However, behind the pain points are huge business opportunities for enterprise-level services. At present, many online service platforms for specific links in the hardware industry chain are rising, and the momentum is booming. However, the manufacturing industry is still very far from the Internet. Most supply chain design and production services are customized and cannot be standardized. Unlike other service industries, the Internet has penetrated deeply. The advent of the Internet of Things era will bring new opportunities for the entire manufacturing industry, and rising costs will force the upgrading and transformation of the manufacturing industry. Manufacturing manufacturers will actively seek more efficient and lower-cost solutions. It is believed that there will be more opportunities for enterprise-level services in manufacturing business.

If the B2B enterprise service wants to solve the above-mentioned pain points of electronic design and manufacturing, it must be divided into several levels of depth:

The first level is to gather the two "Bs" of B2B. The two "Bs" that B2B businesses in electronics manufacturing serve are design manufacturers and their customers. And these two "B" are the relationship between one rise and another rise. The specific implementation aspect is the strategic issue of market, brand and operation. And if the first step is to gather two "Bs", this has solved the first pain point of the manufacturing industry to a 50% extent, how to find customers and how to find new customers with more profit margins.

The second level is based on professional "people" to solve problems. B2B is not only business-to-business, but business-to-business, especially for the complex electronics manufacturing industry, which must require professional participation. How to quickly find the right business window for cooperation in Foxconn, which has a large number of personnel, is a problem that can only be solved by finding the right "people". Like why Microsoft is willing to spend $26.2 billion to acquire Linkedin, because professionals and professional-based social relationships are so valuable. The manufacturing industry spans many sub-fields. How to make better use of external resources to gather professionals for integration and quality control has become an important factor reflecting the specialization of B2B enterprise services. At this level, the pain point of talking with the right business window and converting potential business opportunities into orders as soon as possible is solved.

The third level, how to scale efficiently. Purely relying on the "heaping people" tactic is a relatively heavy model, and the scale will inevitably encounter bottlenecks. After scale, more problems will be encountered, but management costs will rise. Judging from the experience of improving efficiency in foreign countries or other industries, Saas tools can improve the efficiency of project research and development, multi-party collaborative communication, file management, and task distribution. This method is also right or wrong. The problem is that the electronic design and manufacturing enterprises are very specialized in the professional field, but the Internet learning ability is very poor. They will use the CRM system and production system for internal management, but Slack is a fashionable tool. , If you want factory owners, project managers, and salespeople to use it, it's better to eliminate Lotus 123 first. In addition to the lack of customized functions for the supply chain, the core is that customers are not there, and you can't see direct sales promotion. The factory side has no incentive to learn. However, the previously mentioned pain points of manufacturing customer communication, project management, collaboration, etc., are still difficult to solve.

Let's look at the combination of Microsoft + Linkedin, "scalable software tools + professional-based social platform", which may have some enlightenment. For the supply chain side, wherever potential customers are, factories are willing to go there and try new tools and platform services. For the IoT innovation demand side, where there are resources that can solve my professional problems and more efficient tools for multi-party collaboration, I will naturally go there. This B2B business flow is in motion.

Lucas Wang, CEO of HWTrek