This is the second post in Aberdeen’s Digital Transformation Blog Series. It focuses on the organizations that are hitting their time-to-market, quality, and cost targets but falling behind in revenue. It also outlines the steps they can take to become Top Performers.

Over the past few years, manufacturers have survived economic shutdowns, the imposition of strict safety protocols, raw material shortages, and many other business challenges. Although the uncertainty of the past still hangs overhead, business growth is top-of-mind for many organizations, and it can be frustrating if your business is struggling to generate revenue or achieve expansion goals.

Aberdeen defines the following groups in our latest analysis of survey responses from 262 manufacturing and engineering leaders, based on their performance in time-to-market, quality, cost, and revenue:

Aberdeen research shows that all of these organizations are taking different approaches to improve manufacturing operations, but digital transformation remains a universal top priority (Figure 1).

Figure 1. Top Actions Manufacturers Are Taking to Improve Operational Efficiency

Those who are falling flat with revenue are particularly interesting because they seem to be doing everything right, but they still aren’t seeing the revenue results that the top performers are achieving. To overcome this challenge, Figure 1 shows they are promoting collaboration between departments. Collaboration is critical in helping those who are falling flat with the limitation holding them back from becoming Top Performers: lack of visibility into what the market wants.

Inability to Assess Market Demand Stalls Business Growth

The reason these organizations are hitting their cost, quality, and time targets but falling short with their revenue targets points toward a lack of visibility into what the market wants. Their internal processes are doing well, but their knowledge of their customers and their needs requires work. They are more likely to struggle with market demand for more feature rich products, indicating that the products they are putting out into the market, while high quality and low cost by their own standards, are not as innovative or advanced as customers would like.

They are also more likely to struggle with market demand for lower cost products, so they should consider finding additional ways to cut costs and listen to their customers to learn about the prices they are comfortable paying. Without visibility into customer expectations, these manufacturers are unable to keep up with the rapidly increasing pace of innovation. To keep up with their competitors and grow their market share, they need to be proactive. They should leverage real-time data and customer feedback to listen to the market, and then they can collaborate internally to ensure all products are meeting customer expectations as well as achieving time-to-market, quality, and cost targets.

Greater Visibility into Customer and Financial Metrics Increases Agility and Success

The visibility consumers have into products and services with the wealth of information at their fingertips today is changing the game for all businesses. Aberdeen’s research shows that the access customers have to information on many competitive products and services, which is changing the dynamics of customer relationships, is the second-most common customer experience pressure in manufacturing behind competition (36% and 38% respectively, % of respondents rating each CX pressure as one of their top two). Customers have more agency in the buying process than ever before, making it critical for businesses to stay up to date on what their customers want.

Data management and analytics tools can help leaders make data-driven decisions about products, services, pricing, engagement channels, etc. to meet anticipated needs and desires. Currently, manufacturers who are falling flat with revenue are less likely to invest in visibility into real-time data to support analysis of customer expectations (Figure 2).

Figure 2. Visibility Deficiencies for Manufacturers Falling Flat with Revenue

Without visibility into the status of all processes and manufacturing data, those falling flat with revenue are unable to properly plan for product launches. Real-time visibility into manufacturing processes as schedules and features change is important for this information to be conveyed to the market. On the supplier side, visibility into supplier performance helps manufacturers assess availability of raw materials and determine a course of action to optimize cost effectiveness, product performance, and manufacturability.

Real-time visibility into customer orders allows manufacturers to leverage customer data to determine which products are the most popular and which are barely selling, and they can use these insights to inform new product introductions, volume production increases, and end-of-life for certain products. Linking operational and financial metrics helps business leaders identify when targets aren’t being achieved, and then they can take action to make improvements. This agile, integrated approach to manufacturing ensures the business can quickly make adjustments and continue moving forward.

Deploy the Right Strategies to Grow Your Manufacturing and Engineering Revenue Today

To find greater success in revenue on top of excellence in time-to-market, quality, and cost, organizations should look to:

  • Promote collaboration and integration across the organization
  • Prioritize agility and visibility to respond to changes in customer demand and market disruptions.
  • Support data-driven decision-making to take advantage of strategic opportunities for growth

By keeping these three strategies in mind today, manufacturers and engineering leaders can make the changes necessary get over the finish line and become Top Performers.

Becoming a Top Performer and achieving operational and financial targets takes time, so if you’re missing more than your revenue goals, that’s okay! The next post in this blog series will focus on manufacturers who are Missing the Mark and the steps they can take to achieve their time-to-market, quality, and cost goals.