As an Original Equipment Manufacturing (OEM) dealer or distributor – do you ever face trouble predicting the sales of a product at any given point of time in the calendar year? Do you ever struggle to find weak links in your processes? Would you like to get an understanding of customer buying patterns so that you can have enough inventory at the time of order and not get overwhelmed? Or increase your lead conversion rate?
If your answer is yes, then this blog is for you.
In this blog, we’ll talk about why analytics is important for OEM businesses to overcome their day-to-day problems.
Many of these problems can be traced back to poor data management, which results in inefficient decision making and lack of insight into business operations. By effectively using data analytics, companies can improve profitability, increase market share, and reduce risk.
Processes in the OEM Industry:
The OEM industry has a complex operating model. You can bifurcate this model into 3 core sectors: –
- Manufacturing- The manufacturing sector is responsible for producing products according to customer specifications. This requires expertise in many different areas, such as engineering, production management, and quality control. Manufacturers often contract out parts of the manufacturing process to third-party suppliers to reduce costs and increase efficiency.
- Distribution- The distribution sector ensures products are delivered to customers where they want them (and where they can be sold). Distribution companies typically have strong relationships with retailers so they can get products into the hands of consumers as quickly as possible. They also have extensive knowledge of market trends and consumer preference so they can anticipate what will sell well and stock accordingly.
- Servicing- The servicing sector provides support after a product is purchased by the end of its designated life cycle (typically 3 years). This includes everything from warranty repairs to helping people switch over to new technology products.
Each sector has its own unique operating model that must be taken into account when creating or implementing a business strategy. OEMs generally rely on multiple dealers and distributors to reach a larger customer base. OEM dealers and distributors are typically at the forefront of selling equipment, servicing it, and playing a pivotal role in the overall customer satisfaction for the OEMs.
For an OEM business to be successful, all three sectors have to operate in complete harmony. We know that you already have that in the bag. However, since you are still reading this blog, chances are that most of these processes still remain dependent on legacy digital architecture that doesn’t make much sense of one asset that can scale up your business exponentially. That one asset is your business data!
What is Business Intelligence?
Business Analytics has become the cornerstone of every successful business in the 21st century. A business in the OEM industry is no different.
With Analytics in the OEM business, you can visualize an accurate picture of your business by bringing all data sets together. It outlines all the processes, operations, and real-time information on the overall health of your business.
Business Analytics is like a partner that never lies to you. It shows you a true reflection of your business, regardless of your personal biases.
The insights generated with the help of analytics not only help you isolate and fix your weak links but also help you formulate growth plans and employ secure contingencies for the future.
So let’s learn how you can transform your OEM business by using analytics.
Why Business Analytics is important for OEM business
Now that you know what Analytics is, the next question is why you would want to use it in your OEM business.
Business analytics can help improve overall efficiency and operations by revealing trends and insights that were previously hidden. By understanding customer behavior, trend analysis, and performance metrics, you can make better decisions based on actual data instead of assumptions or opinions. You’ll also be able to track progress over time and optimize your processes accordingly.
Using analytics, you can bring together all the rich data and view your entire business processes in one place. This will give you a single source of truth about your business. You can understand what processes are taking longer than the usual time, how much inventory you have, how many service requests are open, pending, and completed, how many leads are in pipelines, and many more relevant metrics.
The vantage point of analyzing and interacting with sales and service data sets together gives you a strategic advantage. With this advantage, you can generate actionable insights to optimize your distribution management system and strategy. Now let’s take a deep dive into understanding the problems that currently plague the OEM Industry.
Lead and Quote process
The first interaction between a potential customer and the dealer is when the potential customer inquires about a product/equipment. Immediately, they mark it as a potential lead. After inquiry, a dealer sends a quote based on the customer’s requirement.
You can generate leads from multiple sources like walk-in, word of mouth, print media advertisements, digital campaigns, social media, referrals, etc. Nurturing all of them can be a difficult process since the interaction and the product requirements of every lead differs contextually.
However, every customer looks for multiple quotes from different dealerships and distributors. If the turnaround time of the deliverance of your quotation is not prompt and personalized, the customer will definitely opt for another vendor.
After reviewing multiple quotes and subsequently going through multiple rounds of negotiation, an order is placed. Many businesses struggle to keep documentation of every interaction with the customer in a structured format. Understanding the insights from the data collected from customer interactions can help you optimize your client-side communications.
Equipment Delivery and Installation
When you deal with delivering and installing heavy equipment, you have to go through a complex protocol. The site engineer comes to the location, inspects the site, and finalizes the place for the equipment set-up. Meanwhile, The dealer initiates the shipment of equipment from the manufacturer to the customer’s location.
The Delivery challan is sent along with the shipment. Once the equipment is delivered and installed the customer signs off it to acknowledge the delivery. After this, an invoice is sent to the customer to receive the payment.
This to and fro communication is mostly done on pen and paper or excel at most. Tracking these activities comprehensively is certainly a challenge. But analytics can help you streamline your deliveries a lot better. They can create an effective supply chain to carry out these activities smoothly.
Breakdown and Maintenance Calls – Post-sales service starts when a customer calls the dealer to report the breakdown of any machinery. There are two types of servicing that any customer will require:
- Breakdown: This could be anything that interferes with the normal operation of the product
- Preventive maintenance: These are scheduled visits for general servicing and maintenance
To understand the situation and optimize your services, you need to have greater transparency in your service operations and optimize the cost of professional service at every level. That is where analytics plays an important role. By highlighting the performance of your service personnel, it allows you to make decisions based on clear data. This information also helps you to identify areas that are lagging and correct them accordingly. In this way, analytics ensures an optimal customer experience.
The dealer opens the service requests, defines the issues that need assistance, assigns the service engineers to carry out the services for the customer. The service engineer goes to the equipment site to inspect the machine and defines the type of service needed, either part replacement or just minor changes in the equipment. Today, it is critical for dealers and distributors to document all touchpoints to maintain high levels of customer satisfaction. To do this effectively you need to monitor the quality of services provided to the customers.
This is a process that will require significant human capital to do manually. For automation, you’ll need to have the assistance of data analytics and intelligence tools to extract insights and use them to bring a transformational change into your business.
If the services (servicing and replacement are done for any parts) fall under the warranty period of the customer, the dealers can raise a claim with the OEM directly.
After the servicing is done, the dealer follows up with the customer for the payments. If the services fall under the warranty period, the dealer can claim the equipment parts from the manufacturer, but if the services fall outside the warranty period the customer has to pay the service charges and new equipment purchases.
With analytics, you can streamline this process as well. You can easily track data on the number of customers who have paid for the services and the customers whose service lies in the warranty period. This way you can file claims with the manufacturer, backed with solid data.
Now you understand why analytics is important at each step of the OEM business. In this blog, we’ve mentioned all the pain points that Business Analytics can resolve. You might hesitate to leap forward because the required time and capital investment are significant.
After all, implementing analytics into your business means hiring an entire team of BI (Business Intelligence) professionals, purchasing software with high licensing fees, and hiring a management team to measure the generated output. Business analytics can’t just happen simply by looking up whatever insight you want to view with just a Google search.
Or can it?
INSIA; a no-code, self-serve search-based platform that is as easy as using Google. INSIA integrates data from multiple sources and allows you to analyze the problem at the granular level. It can manage the complex multiplicity of customer touchpoints and build up your business analytics with pre-loaded industry-specific KPIs. Click Here to try it for free!
Also Read: How is INSIA driving the future of Analytics with AI and search?