How Salesforce Innovates to Address Manufacturing Trends

Michael Janney, VP of Industries at Salesforce, has been a part of the Salesforce ecosystem for a dozen years in different capacities — first as a customer, then as a member of a manufacturing advisory board, and most recently with Salesforce for the past four years.

He joined HIKE2’s Innovation Summit 2022 to talk about how Salesforce grew Manufacturing Cloud to where they are today, the biggest trends their clients are seeing currently, and how Salesforce innovates to roll out new solutions quickly.

The Manufacturing Cloud Journey

Salesforce’s Manufacturing Cloud story really goes back to their partners and customers.

In 2014, Salesforce was a classic CRM tool with sales and marketing capabilities as well as some service functionality.

They started with a kick-off in the manufacturing vertical, wanting to know all about what Michael calls “a day in the life” for manufacturers — no matter what the product — whether they used discrete or process methods.

To get an idea of where Salesforce started, the blue boxes in this graphic show where Salesforce had solutions in 2014. The white areas indicate gaps that needed to be filled.

But even though Salesforce didn’t directly address these gaps at the time, their partners had created solutions that sat on top of the base platform.

The innovation that occurred between 2014 to 2022 and beyond is unique because Salesforce leveraged their partners. CloudCraze and CPQ are examples of ISV (independent software vendor) partners that Salesforce acquired and pulled into their core code. Now Michael estimates Salesforce can solve about 95% of the problems on the manufacturers’ side.

The Use Case That Started It All

The initial use case for Manufacturing Cloud revolved around sales agreements.

For example, a company could have a purchasing agreement with Sherwin Williams for paint. Sherwin Williams would provide them with so many metric tons of paint over an 18- or 24-month period at a certain price.

Both parties would agree and the salesperson would get comped — but there wasn’t much recourse if the parties got to the end of the agreement and the buyer hadn’t purchased everything they said they would.

So Salesforce integrated purchasing input into their ERP system to track the consumption of that agreement. Then they gave salespeople a dashboard to show the ongoing health of the agreement.

Once clients started using that solution, they loved it. They asked for forecasting next. Forecasting, of course, looks at how much product manufacturers sold in the past and uses historical data as well as other inputs to determine how much they should build in the future.

Once Salesforce started providing that information to operations teams, they found that everyone wanted to filter their data differently. Production teams wanted to see demand and sales by product, while sales wanted to filter that same data by account.

“It was all about slicing and dicing that data and letting customers know they could come to Salesforce to get exactly what they needed,” says Michael.

That really was the start of Manufacturing Cloud. And of course, it’s grown significantly since then.

Current Trends in Manufacturing

Next, Michael discussed the common themes Salesforce is currently hearing from their manufacturing clients — mainly inflation, interest rates, and supply chain challenges.

Inflation, for instance, is causing many manufacturers to review their business models. Increasingly, they’re lowering costs by moving to a JIT (just-in-time) inventory model rather than building product for inventory as they’ve done in the past.

One Salesforce client, a roofing company, was concerned about how much the cost of raw materials had increased pre-Covid vs. today.

Michael explains, “They’re closely monitoring their costs to figure out how much inventory they want to have at their distributors. Do they want a lot of inventory? Should they move toward a just-in-time model? They’re looking at business use cases and models to change how they’re producing product. And the biggest issues are the supply chain challenges.”

The Pressure to Become Data Driven

Supply chain visibility is more critical than ever, but it’s often complicated by having many different back office platforms. Integration is the key to leveraging that data, bringing it into Salesforce, and showing it to the people who need to see it in order to make their jobs easier.

Salesforce calls this a spaghetti map.

Michael states that his own back office systems used to look like this map, when he was a customer of 14 ERPs and multiple production platforms — including five production platforms at one plant.

“This is really at the center of putting the customer at the center of everything we do,” Michael said. “Taking the data and making stakeholders on the right-hand side happy (Sales & Marketing, Finance, Engineering, Operations, and Services) and giving them a better customer experience.”

He also notes that improvements frequently touch areas we don’t initially expect.

He tells the story of a client where the initial customer was the sales department, an internal employee. Sales needed information about orders. Eight or nine years ago, if they wanted details on a customer they were visiting, they would literally have to call customer service.

Customer service would have to figure out what division the customer’s product came from, log into the ERP, look up the history, and email the salesperson back. Pretty inefficient. But today, in Salesforce, there’s an account page for the customer that displays order information.

“We thought we were solving a problem just for sales, but in reality, we were solving a major problem for customer service also, because now they could focus on the customer and not the salespeople,” Michael said. “That was a big pain point that we ended up solving across the organization. There was a trickle effect.”

How Salesforce Helps Clients Today

These days, Salesforce focuses on five main areas with customers:

1. Modernizing commercial operations

Manage your complete book of business, from sales opportunity through order to cash.

2. Transforming the service experience

Deliver faster and smarter service, from the contact center through field service to the customer.

3. Simplifying partner engagement

Drive greater supplier and channel partner visibility, engagement, and performance.

4. Enabling the workforce of the future

Enhance productivity, engagement, and agility with modern experiences for the work-from-anywhere world.

5. Translating data into insights and action

Integrate legacy systems and enable better decision-making and execution powered by AI, analytics, and the Salesforce platform to give the humans who are making the decisions the right insights.

The key, Michael notes, is to fail fast. Create a solution, and if it doesn’t work, adjust it. Get moving and do something.

Because what we’re dealing with is business transformation, not an IT project.

The Manufacturing Cloud Vision

From a customer perspective, Salesforce takes the 360° wheel and lays it out in what they call a subway format.

The subway allows customers to see all the different Salesforce solutions and helps them decide where they want to start. 

“We call it the subway because you can start anywhere you want,” Michael explains. “Marketing has eight different icons instead of just one. Customers can say, ‘Here’s what’s most important to us,’ whether that’s CPQ, commerce, etc. This is the heart of Manufacturing Cloud. It’s really an infinity loop because you can continually improve anything here. Your business will change and you can adjust.”

Michael notes that during the pandemic, a shingle company stopped going on-site to customer locations and instead did remote triage. Now they’ll never go back to their old business model.

They can onboard a new hire right on Zoom sessions instead of sending people out in a truck. If they do have to send a truck, they know exactly what they need to take with them. They can also give the customer more options: self-installation or a full done-for-you install. Their customer experience has drastically improved.

Embracing the Future with Salesforce and Manufacturing Cloud

Michael sums up, “As of the time of this presentation, there have been ten Salesforce releases, with all of the ideas really coming from our customers. That’s how we innovate.

It’s really about slicing and dicing the data and helping customers get what they need from Salesforce. Whether it’s sales agreements, forecasting, rebate management — tell us what you mean? Give us some use cases. And that’s how we continue to grow our solution and innovate. Ten releases so far and there’s more coming.”

Watch the full Innovation Summit 2022 presentation or download slides