EU Manufacturing Has Changed How They Buy

We work with a number of industries in the German speaking market.  None has changed more strongly and more times than manufacturing.  In fact, our 2021 analysis had Manufacturing as our most productive industry segment and good chance it will be our 2022 winner as well.

What is going on?  Traditionally, manufacturing was based on long term continuous improvement and EU manufacturing had weak investment budgets compared to their meteoric Asian competitors.  This meant slow, conservative buying cycles from proven suppliers.  Like other industries, Covid upended long term budgeting and allowed immediate “war time” buying processes.

However, unlike other industries like banking, EU manufacturing did not return to “normal”.  Shift from China made EU manufacturing cool again creating an environment where investment could flow a bit more freely.  Massive disruptions in staffing (competing with other low skill labor shortages plus some industries such as food processing using lots of women got hit even harder), supply chain chaos, transportation cost volatility and high energy pricing are top of a supervisory board discussion list these days.

This means nearly all long term spending plans are still “on hold”, budgets have low rigidity, and most purchases that will be made in the next 12 months are likely to be from suppliers they have never worked with before.  Here are our tips how to sell to EU manufacturing now:

  • Forget long term ROI.  There is no attention span for these long term optimizations.  High chance these become the zombie deals that never reach conclusion.
  • Find a way to make your product fast deployment.  30% of the value in 60days is soooo much more attractive than 80% of a problem in 12 months even if the ROI would suggest otherwise.
  • Solve problems that are getting board attention.  Right now, executive management teams have a complete loss of visibility on costs, revenue, schedules, material availability, factory capacity.  That same technology that might otherwise help with optimizing staffing should now be repurposed to help adapt to staffing shortages and high volatility planning.  BI solutions that might help optimize costs now can be repositioned to help management know if the overall incoming material costs should impact on new pricing to their end customers.

 

In short, don’t sell house insulation to someone who is experiencing a flood.  Find a way that your insulation can keep people warm on the top floor when you can’t run the electricity due to water safety.

 

 

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