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How Automotive Manufacturers are Bucking the Profit Erosion Trend

Are your profits eroding slowly over time?  For automotive suppliers and other manufacturers who sell to giant corporations, profit erosion is a common problem. There’s no one big issue that can get fixed. It’s a multitude of little things that peck away at making money.

  • More engineering changes than anticipated
  • Invisible inventory carrying costs
  • Varying materials costs
  • Inability to accurately forecast sales and cash flow
  • Inefficient sales and project management processes

Improving your sales opportunity management and project services automation are the keys to bucking the profit erosion trend.

Collaborate on RFP bid responses – Sales management software can create a collaborative workflow to help you coordinate responses from internal staff, external contractors, and suppliers.  Automation can speed up routing and approvals so everyone knows at a glance where the project stands.

Improve your forecasting abilities – Understanding what sales will close and how much money is expected to come in every month makes hiring and inventory purchasing decisions easier.  Manufacturing demand planning can help you negotiate better terms with suppliers.

Optimize scheduling – Improving your forecasting abilities will help you optimize the scheduling process.  For your front office team, optimizing scheduling requires tight project management to manage the engineering process. Once the first product is built, your ERP solution should be managing the production scheduling process. The proper scheduling can keep down your inventory carrying costs and help eliminate waste in the process.

Lots of little profitability leaks in a manufacturing business can significantly add up over time! In an industry where seconds and pennies can add up to millions of dollars saved or lost, it’s important to look for those hidden opportunities to stop the profit erosion.

Written By: Mark Schindler, CRM Solution Architect and Sales