Global Supply Chain Issues: What it Means for Onshore Automation

It is no secret that the fractured global supply chain has greatly affected our means to purchase goods. Everything from vehicles to face masks are in short supply, mostly due to our reliance on offshoring for raw materials and finished products alike. China, the world’s leader in manufacturing output, imposes some of the strictest Covid protocols in the world, leading to logjams and delayed shipments in their biggest export hubs.

Shanghai’s air freight warehouses out of Shanghi Pudong Airport, and the city’s port, Shanghai-Ningbo, are riddled with testing protocols and shipping delays. Shenzen, a major manufacturing hub, is dealing with a massive shortage of truck drivers, which in turn has pumped up trucking costs 300%. There’s no way around it, major shipping hubs around the world are bleeding, and it looks like it will only get worse in the foreseeable future. Russia’s invasion of Ukraine has only compounded these logistical nightmares, putting major delays and price increases on exports like fertilizer, wheat, nickel, and aluminum. Richard Wilding, a professor of supply chain strategy at Cranfield University, stated that the supply chain used to consist of 80% predictability and 20% dealing with surprises. That ratio has now flipped.

Although there are many companies budding around the tracking, security and analytics of logistical issues, the problem still remains: when will we get our product? After years of offshore production, much of our supply chain is engrained in these outsourced alternatives. To just get up and leave is almost impossible.

For a long time, the cost to manufacture domestically has been too high, but the fragility of our global supply chain has started to reverse our current train of thought. 746 manufacturing companies were surveyed in June 2020, and 69% of those are actively looking to bring production back to North America. 38% of these companies are actively hiring, and more than half of them stated that they are looking to invest in automation, specifically for production, process control and product testing. This presents an interesting opportunity here in the U.S., one that was thought to be largely an afterthought as the world got smaller.

According to Thomas Reports, manufacturers are looking to source metals, machining tools and parts, fabricated metals, and personal protective equipment domestically. The pandemic has sparked interest in “reshoring”, at the very least to diversify the supply chain. In an article on AutomationWorld.com, Harry Moser, the founder and president of the Reshoring Initiative, stated the following, “If we don’t invest in automation, we don’t increase out competitiveness. Some people are afraid of automation because they’ll lose their jobs. But, throw away that statement, because the U.S. will lose more jobs to Chinese automation if we don’t automate than we will lose to U.S. automation if we do.” This sentiment is highlighted by the fact that U.S. manufacturing has had a growth rate of 0.4% over the past 10 years, compared to China’s 6%.

Although the future of increased American onshore production is looking likely, that does not mean these companies plan to abandon their current practices. By diversifying their supply chains, each global event will impact their production, inventory, and bottom line, just a bit less.

Sources:

Knight, Will. “The Supply Chain Crisis Is about to Get a Lot Worse.” Wired, Conde Nast, 28 Mar. 2022, https://www.wired.com/story/supply-chain-crisis-data/.

Neil, Stephanie. “How Automation Enables Viable Reshoring.” Automation World, 2 Mar. 2021, https://www.automationworld.com/factory/workforce/article/21307149/how-automation-enables-viable-reshoring.

Written by Felix Richter, Data Journalist. “These Are the Top 10 Manufacturing Countries in the World.” World Economic Forum, 25 Feb. 2020, https://www.weforum.org/agenda/2020/02/countries-manufacturing-trade-exports-economics/#:~:text=According%20to%20data%20published%20by,China%20overtook%20it%20in%202010.

Sales Urgency: Why You Should Have It

For some of our colleagues, sales is a temporary place holder. A stepping stone, a hash mark on the timeline of their career. That’s ok. This job isn’t for everyone. If personal growth rushes you past the title of “salesman” and onto something else, I will congratulate and wish you well.

But for the rest of us, this is what we do. I am proud to be a salesman. I have accomplished many personal goals because of this occupation. For those of us who consider this our life’s career, we take it personal, we take it seriously.

I don’t know any successful career sales professionals that don’t have some quirks. Ego. A strong desire to win. A complete and utter disdain for losing. And a sense of urgency.

A sense of urgency is the corner stone of any sales project. Without urgency, it is near impossible to inspire your colleagues and counterparts to join in and help you start, develop, and successfully close a sales project.

What responsible engineer is going to dedicate expensive engineering hours on your project or idea, if you cannot impress upon them an infectious sense of urgency? Certainly, they want facts and details. Absolutely they need a business case as to why they should help you “chase” your project. But none of that starts until the sales person shows up with an idea, some angst, and a “let’s get this done right now” attitude.

I find myself looking sideways at salespeople who continuously use phrases like, “Yeah, I’ll get to that next week”. Next week? Why not yesterday? Last night? How about right this moment?

A very successful sales executive once said to me:

 “Each week is 1/52nd of the year. If you are satisfied with your effort this week, fine. If you are ok pushing something off, fine. But if not…. you are running out of time.”

It is easy to make yourself busy. You can fill your daily calendar with reactive and housekeeping issues, work all day, and never accomplish one actual proactive sales task. Call reports and expenses need to be done, right? Better make time to check in with a few work buddies and commiserate about the new growth budget. The dry cleaning needs to be picked up, and you had better get a haircut for the big meeting “next week”. Sounds like a full day, and not one bit of it generates a new sale.

These same sales-folks are content with “making budget”. They are complacently satisfied with mediocrity, of just getting by. There is always a reason for failure, and oddly enough, it is never their fault. I knew an old salesman, years ago (the ancient 80’s) who had the same handful of excuses, #1 being, “the street is dead”…meaning there were no projects. NONSENSE.

The street is never “dead”. There is always a new customer, a new market, a new product. Look at your area of responsibility; do you have ALL the business? No, you do not. Go shake up your competition. Stir the pot. With a sense of urgency, because the clock is ticking.

At Strategic Automation Services, we think about the urgent nature of our sales effort every day. We stumble, we backtrack, we circle around, we chase opportunities when math and logic suggest failure. But we do it because our principles and manufacturers expect it of us. I have worked for many sales managers in my career. As independent sales representatives, we continue to report to someone tasked with monitoring and grading our performance.

Reflecting on 35 years, considering all the criticism we have absorbed and accepted, all of the coaching and correcting we have been given, never once did someone suggest that we should slow down and expect less.

A sense of urgency will wake you up at 3:00 a.m. It will make you HATE a snow day. It will put you in front of a customer at 4:00 on a Friday afternoon. It will sometimes anger engineers and it will please sales managers.

And it will create new customers, new projects, and new sales. Be anxious. Be urgent.

The Importance of Following Up

“The Follow Up” is the most overlooked and underutilized tool in sales. In this day and age of technology, data, and the ability to have a deluge of information at our fingertips, the simple follow up is becoming a lost art.

A typical day in a sales person life might go like this:

·     Answer emails

·     Do expense reports

·     Attend scheduled meetings

·     Check on current projects and quotes

·     Present quotes to customers

That is a pretty full day. And the next day, a good sales person does it all again. All those quotes and opportunities add up. The sales funnel is full. The boss is happy, because you are busy.

But then something happens - all those good opportunities, those lucrative quotes, they just fade away. And one day the boss calls and wants to know what ever became of that $25,000 RFQ from Acme Company last November. And you don’t know. You stumble on the phone trying to come up with an answer for the boss. He/She knows that you don’t have a clue, and they start digging deeper. And it all unravels.  Fortunately, this can all be avoided.

FOLLOW UP! There is no task more valuable than following up on a sales call, a quote, or a lead. Let’s look at them individually.

Sales Call Follow Up:

A simple email after a meeting, thanking your client for their time, with a very slight and gentle recap of the meeting is a powerful thing. Your customers time is valuable. You are thanking them for it, and you are showing them that you have DONE something with that segment of their day that they allotted for you. It isn’t necessary every time. But for a customer that you see less than once a week, it is a very good bridge to the next communication.

Quote Follow Up:

Think about how many orders you have received after a revision was done to the original quote. Now think about the quotes you DIDN’T follow up on, that didn’t result in an order. In most cases, if you provided a quote, so did someone else. And SOMEONE got the order. If it wasn’t you, well, you lost. And you probably lost to a salesperson who checked in after their quote was submitted. When I follow up on a quote, we almost NEVER ask “how was my price?”. Most professional buyers will see that question as a) rude, and b) an indication that you have room in your price. Neither is a positive impression.

Instead, we ask variations of:

·     Have you had a chance to go over the drawing or spec sheet? Is everything in order?

·     Do you have a timeframe as to when you will be placing this order?

·     Are these volumes going to remain constant? What is the EAU?

Almost anything related to the project that keeps you communicating is good. Many orders are lost because the quote was submitted, and the salesperson moved on. Remember this; quoting isn’t the job, CLOSING is the job.

Lead Follow Up:

There is nothing more basic, more Sales 101 than lead follow up. If you are a new salesperson, you will learn volumes about your new career by following up leads. If you are a veteran, you will create more profitable opportunities by diligently following up leads than any other sales related activity.

A qualified lead is typically exactly that; QUALIFIED. The potential customer has probably been on your website, asked for a brochure, requested a sample. They are very interested in SOMETHING you sell, and they have already decided for themselves that you or your company is at least worth investigating. They are literally pre-qualifying themselves as a customer.

We touch leads 3 ways (not 3 times. We might follow up a lead 10+ times). We immediately phone call, email, and attempt to set up an appointment. Our goal, what we want to accomplish (aside from a sale) is a face to face meeting. Meeting in person boosts the odds of an inquiry converting to a customer tremendously. A large portion of this job is just showing up. The sales person standing in the lobby, sample and spec sheet in hand, is the salesperson who is going to get the order.

It's so easy these days to email a drawing and a quote, ship a sample, and call it “done”. But the easy way isn’t always the best way. A buyer, an engineer, a project manager...these guys want to put a face to a project. They want to know that their inquiry was so important to you that you jumped in your car and drove across town to shake their hand.

We have a policy of following up every sales lead. Every single one. And we sell some pretty low cost items, like hookup wire and shrink tubing. But we will come and see you if you are looking at our products. Why? Because we are betting that $.08 per foot hookup wire you inquired on isn’t the only thing you buy. And if it is? That’s just fine. Because even if you are just going to spend $1,000 a year on hookup wire, you are a new customer, and that’s a $1,000 we didn’t sell last year. Have you ever been to the end of a quarter looking for a $1,000 order to make your number? We have.

We all have a busy schedule. Shake it off. Figure it out.  Do your expenses at night. Get your haircut on Saturday. Whatever it takes - make time to follow up!