At a high level, manufacturing companies typically have a run-rate type of business. Simply put, they predict future financial performance based on existing and expected sales (what I’ve already sold plus what I think I’ll sell). For example, if sales in the current quarter were $2 million, that translates into annual sales of $8 million. Some of the examples include companies that work with distribution networks, process manufacturer companies in the agricultural or chemical industry, OEMs, etc.
Manufacturing is a capital intensive industry. Right from designing a product to realizing revenue from it involves sizable investment upfront.
Manufacturing industry leaders are looking for ways to achieve the following objectives:
- Agility within an organization to enable quick response to customer needs
- Predictability and visibility across manufacturing systems
- Increased pricing optimization and agreement negotiation
- Improved forecasting accuracy
Salesforce Manufacturing Cloud brings predictability and transparency across client’s ecosystem.
What is Manufacturing Cloud?
Salesforce launched (GA) Manufacturing Cloud in Oct 2019 to cater to clients that have run-rate type business. Salesforce Manufacturing Cloud has two new objects: Sales Agreements and Account Forecast.
Sales agreements help to negotiate sales of products over a continued period. With account-based forecasting and customized formula, clients will have increased accuracy in forecasting.
Ancillary features like a collaboration with the partner community, embedded AI with Einstein, and MuleSoft SAP connector can be added optionally for better efficiencies.
Licenses for Manufacturing Cloud users can be activated by working with Salesforce. Manufacturing Cloud works well with Salesforce Sales and Service Cloud orgs for new as well as clients with existing Salesforce org.
Why Manufacturing Cloud?
Capital intensive industry: Procurement, production, inventory, shipping, etc. need substantial investments. With large amounts at stake, any inaccuracy in forecasting has serious effects on working capital. Forecasting errors cause a bullwhip effect with increased production costs, higher inventory costs which in turn impacts relations with customers and suppliers.
Disconnected functions: Manufacturing clients have complex and complicated operational systems that were installed decades ago. Heavy investment in legacy systems, complex integrations and siloed data adds to further disconnection of various functions including customer relationship management.
Having a clear understanding of what clients are looking for is critical to define the outcome and for a roadmap to success. Discovery efforts establish trust with the client in the early stages. Along with customer trust, discoveries build confidence in your team to lay out a plan for what it will take to bring the solution to market.
Discovery teams address three key areas of consideration that are — desirability, feasibility, and viability. With the discovery, one can assess who the audience is and what they want vs what they need. Discoveries are good to check whether the approach fits within the client’s business objectives. The implementation team along with sponsors, end users can zero in on the bare minimum that is needed for success or MVP (minimum viable product) during the discovery process.
Manufacturing Cloud complements the existing tools that clients use for demand planning. Discoveries help to understand current state and define future (desired, feasible, viable) state. Before starting a discovery, it is important to see if there is a good fit based on capabilities and client-specific applications.
The below questions would help you kick-start discovery for Manufacturing Cloud. It is divided broadly into two parts — Sales Agreement and Account Forecasting.
Ask clients about Sales Agreement
- Could you provide at a high level, how much percentage of your business is run-rate?
- Do you use sales agreements (or frame agreements, long term agreements) for selling products in quantities over time? How do you manage those in Salesforce today?
- Does your sales team currently have the capability to quickly review accounts contribution to revenue over time for agreements?
- Do you offer custom pricing on agreements on a case-by-case basis?
- How much time does your team/overall company spend on managing sales agreements?
- How many products are included in an agreement on an average? Note: Sales agreement can have up to 200 products as of Winter 2020.
- For agreements and contracts, how do you monitor and control their consumption?
- What metrics are important for sales agreement, order management performance?
- How do you collaborate with stakeholders on agreements? Check the need to enable the partner community.
Ask clients about Account Forecast
- Does your sales team forecast at the account level? If yes, how is it done currently?
- How do you identify if an account is at risk of attrition or underperformance?
- How does an inaccuracy in the forecast impact the business overall?
- How does the inaccuracy in the expected volume-based pricing impact the business?
- Do you consider orders, revenue, or inventory data during forecasting? How do you use that data in forecasting?
- Where is the sales order processed? What are the sources of data related to the sales order? Note: Think of MuleSoft SAP connector for Manufacturing Cloud.
- How do you consolidate plans, orders, and forecast information?
- Describe the process for adjusting the forecast. How do you address updates in the calculation and locking period? How much time is spent on adjustment typically?
- When updating the forecast, does your team consider contract performance over time to see how much actual orders against the sales agreement?
These questions should give you a starting point to engage with a client and discover requirements. Further, you can dive deep into processes to finalize the scope for the implementation. With a solid understanding of client needs as a foundation, you can now move towards finalizing the scope for Manufacturing Cloud implementation.
Note: This article is written based on the Winter 20 release.