Manufacturing: the Trends are Pointing to Commodities


Back in the good old days, manufacturing was a pretty straightforward affair. One company produced goods, and they were simply shipped off to a distributor who would then dole the merchandise out to authorized retailers. In the end, the consumer would stop by a favorite neighborhood location, buy the goods at a retail price, and the cycle was complete. These days, it’s a whole different game. Supply and demand is not so clear-cut any more, and the supply chain has been turned into a highly complex maze of orders that are driven by a trend towards commodities.

This trend has led to a huge shift for companies that are involved in virtually every level of the supply chain. Now there is a growing amount of evidence showing that they are taking a more customer-driven approach when it comes to the actual design of the supply chain, and where it leads to. Business today has evolved to a point where everything is about the services used, as much as they are about the actual products in question.

In addition, the entire process and system is made more complex than it was decades ago, and this can add to the difficulty. Most businesses that have been surveyed by industry experts have indicated that they believe the changes will only produce more challenges in the future. The majority of those same businesses also said that they would lead to new growth opportunities.

Manufacturers in particular are taking a double-sided view on the new range of complexities. Many of them are stressing the fact that a nearly overwhelming environment is the direct result of the changes, with all of them needing to find new ways to offset escalating costs and deployment of specialized personnel to take care of the new challenges. On the other hand, the rules of differentiation – which is the standard for determining the rates of change in everything from assembly lines to aerospace applications – could be of use, as there are quite a few of those same businesses that have taken a far more optimistic perspective, and view the challenges as being a chance to modify key data in their customers’ eyes.

The bottom line: the very things that make a company stand out for dealing with these global changes, could be exactly what they needed to get ahead with customers, especially where service is concerned.

There has also been a radical change to the way the “four P’s of marketing” (product, price, promotion, and place) affect the industry, as these older milestones are no longer totally applicable in today’s manufacturing and distribution environment. Again, service is emerging as the key differentiator that will make the biggest difference.

Most companies that are competing for being different are also seeing that they are now not only competing on the quality of their products, but also on the processes and services offered throughout their supply chain. A customized service may become very important, if a company is going to set itself apart from its competitors.

Flexibility will be of major influence, and B2B e-commerce platforms that offer the choices that smaller companies need will be able to reap the benefits of dealing with the changes in the market. Working directly with manufacturers, and removing the complications for their buyers will be another tremendous asset that sets the winners apart from the rest.

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