The last 18 months haven’t exactly been easy ones when it comes to making business projections.

If you talk to any industrial manufacturers, distributors or industrial manufacturers’ reps, their minds are on the future, wondering what the rest of the year (and beyond) holds for their industry and their business.

Fortunately, the fog is starting to clear, and a path is emerging, led by these industrial manufacturing trends we’re seeing during the second half of 2021 and into the coming years.

Industrial Manufacturing Trend #1: Significant Industry Shifts

The first trend of note is industry consolidation—manufacturers are merging or being acquired, and smaller distributors are disappearing. While merger and acquisition activity is not a new phenomenon, the next two years are going to see manufacturing companies merging not only with other manufacturers, but with PE investors – allowing them to use advanced technology to improve their business while also improving their brand reputation for innovation.

Another shift that’s taking place involves the market itself. Some formerly vibrant sectors are now struggling with recession (e.g., US Private Nonresidential Construction production), while others are accelerating (e.g., US Civilian Aircraft Equipment production).

US Civilian Aircraft Equipment Production Index

Source: Industrial Supply Association June 2021 Forecast Report

US Construction Production Index

Source: Industrial Supply Association June 2021 Forecast Report

The key for industrial manufacturers today is to deploy their salespeople to sectors that are accelerating or in recovery, and to back away from industries that are seeing slowing growth or recession.

“For manufacturers, the events of 2020 may be a warning to develop better systems for navigating disruptions like the one we are currently experiencing,” says Deloitte in their 2021 Manufacturing Industry Outlook. “Visibility is likely to become the most critical capability for manufacturers in the coming months.”

What’s the Takeaway?

Industry shifts can make sales growth challenging, as reps may not know which segments to target – or even who to contact. To easily navigate through the upheaval that goes with M&A, many manufacturers partner with industrial manufacturers’ representative firms who have a broader set of eyes and ears when it comes to industry intelligence.

Industrial Manufacturing Trend #2: Geographical Proximity

As COVID continues to disrupt global supply chains, especially in Asian countries and other low-cost-of-labor regions, several distributors and end-users face the frustration of not having the items they need, when they need them.

For example, in the automotive industry, the chronic shortage of offshore-produced chips has slowed or even shut down assembly lines in North America.

This backlog threw into stark relief the need for everything to be closer at hand.

As such, we anticipate a shift toward reshoring for this sector (and others), as manufacturers consolidate and protect themselves by keeping production closer to home.

Speaking of close to home, localization is another emerging trend.

Many distributors are increasing their focus on account penetration and becoming ingrained in the end user’s purchasing processes, to the point where some are establishing a physical presence (both personnel and products) inside manufacturing facilities. These large distributors are moving in on the factory floor with the equivalent of product vending machines, so end users do not have to contact the distributor – and wait for delivery – when they need something. And where do manufacturers fit in? We expect them (and IMRs) to take a more prominent role in product education with the end user.

What’s the Takeaway?

A speedy supply chain is more important than ever, as the economy makes up for lost time. To position themselves for success, manufacturers should look at partnering with trusted industrial manufacturers’ reps with a geographic presence in target markets. According to the ISA, manufacturers use an average of eight different IMR firms to increase their proximity to distributors and end users.

Industrial Manufacturing Trend #3: Embracing Technology

Whether they’ve moved their data and systems to the cloud or have accelerated their workflows with internet of things (IoT) technology, manufacturers are now realizing that today’s technology has the potential to make their business much more efficient and profitable.

One of the more exciting technological developments for manufacturers and distributors is artificial intelligence (AI) and its role in helping predict buying behavior.

In the coming months and years, both manufacturers and distributors are going to follow Amazon’s lead by using AI and analytics to:

  • Discover which products are fast movers and which products move slowly.
  • Calculate which products are profitable and which products are money-losers.
  • Streamline purchasing based on the insights that they gain from their data.

AI will help them do this faster, more efficiently and more accurately, giving them priceless insights that will guide their strategies.

What’s the Takeaway?

Manufacturing might be an industry as old as time, but it’s undergoing a massive technological shift. Technologies like AI allow manufacturers to gain priceless insights into performance and emerging patterns. To fully capitalize on this intelligence, manufacturers should pair up with representative firms with the expertise and experience to apply this data to on-the-ground activity.

How Industrial Manufacturers’ Reps Help You Navigate Tomorrow

As we head toward the end of 2021 and into 2022 and beyond, manufacturers need to realize that everything has changed. Timeless values like product quality and great customer service will always be critical, but those values must be combined with modern strategies that work with the markets of today – and tomorrow.

That’s why many manufacturers partner with industrial manufacturers’ representatives like Durrie Sales, who have deep visibility into the distribution world and can help manufacturers navigate constantly changing industry trends.

Here are just a few ways in which ISA 2.0 IMR’s like Durrie Sales can help future-proof your business:

  • We apply our documented sales process based on market insights and customer behavior; we know what works (and what doesn’t) when it comes to selling industrial tools into multiple industries.
  • We qualify end users, not only to see if they fit your sales and distribution model, but to see if they’re a strategic fit for your business and will help you achieve your sales goals.
  • We help manufacturers leverage technology to market directly to end users (stay tuned for an upcoming article on this topic.)

We live in a time of incredible change, and manufacturers have the opportunity to ride this wave, gain better visibility, and build strong and strategic partnerships with distributors and end users. Another strategic partnership – with an Industrial Manufacturers’ Representative firm like Durrie Sales – will empower manufacturers with the flexibility, skills, and a network to take advantage of every trend that our uncertain (but optimistic) future will bring.

How to Profit from Shifting Industrial Manufacturing Sales Trends