Manufacturing Pulse Report 2016
The manufacturing sector is in the midst of a period of great change. Driven by a desire to get closer to end customers, many are now looking at selling directly to shoppers, while continuing to serve their traditional B2B channels. JDA’s Manufacturing Pulse report examining consumer industries has revealed that in the last 12 months, more than two-fifths (42%) of European adults have bought goods directly from a manufacturer. This shift to direct selling is making itself felt on manufacturers’ supply chains and their profitability.
Furthermore, while the combination of in-store and online shopping – omnichannel – has long been a feature of the retail world, it is only now really starting to impact the manufacturing sector. Indeed, in the last 12 months, over half (53%) of European adults online who bought goods directly from a manufacturer did so via the online channel, and over two thirds (68%) in store. As omni-channel comes to the manufacturing sector, disruption will inevitably follow. The dynamics of selling directly to customers are far different than manufacturers’ previous experience of selling to retail partners. As the online channel grows in popularity, how will manufacturers build a digital supply chain that supports the burgeoning digital relationshipwith their customers?
As these questions emerge, manufacturers find themselves approaching a crossroads. To date, many have only dipped a toe in the waters of selling direct, and found it an uncomfortable exercise in many cases. Now, manufacturers are approaching the stage where they must decide if they are going to embrace the growing direct channel and make it profitable. If they do decide to support omni-channel shopping, then a change of approach is needed to ensure their supply chain operations are evolved to address both the challenges and opportunities presented.