Adapting Sales Strategies to Industry Tailwinds and Headwinds

Over time, the industries you call on will have periods when they face headwinds that cause significant problems. During other periods, the same industry will experience tailwinds, which are beneficial trends and events that companies must take advantage of to be competitive. As a B2B salesperson, you need sales strategies to sell when an industry is facing headwinds or tailwinds.

Let’s start with a list of top-five companies in the manufacturing industry. I’ve included their initiatives, their risks, and their priorities. By acquiring this information, you can get a glimpse of what concerns the giants, then we’ll explore how to use this information.

Company Summaries

1. General Electric (GE)

• Initiatives: GE is focused on digital transformation, especially through its Predix platform, which aims to integrate IoT with industrial machinery. They are also investing heavily in renewable energy and healthcare technologies.
• Risks: GE faces challenges from its legacy businesses, particularly in the power sector. Economic fluctuations and global trade tensions could impact their global supply chain and profitability.
• Priorities: GE’s main priorities include stabilizing its financial position, streamlining operations, and driving growth through innovation in energy and healthcare.
  

2. Siemens AG

• Initiatives: Siemens is prioritizing smart infrastructure and digital industries, with a strong emphasis on automation and digitalization. They are also expanding their presence in electric mobility and renewable energy.
• Risks: Siemens faces risks from geopolitical uncertainties, supply chain disruptions, and competition in the technology sector. The shift towards digitalization also requires significant investment and adaptation.
• Priorities: Siemens is focused on strengthening its digital industries segment, enhancing operational efficiency, and growing its footprint in sustainable technologies.

3. Honeywell International

• Initiatives: Honeywell is investing in advanced manufacturing technologies, including AI, IoT, and automation. They are also expanding their capabilities in aerospace, building technologies, and safety products.
• Risks: Honeywell is exposed to risks from global economic conditions, fluctuating raw material costs, and regulatory challenges in different markets.
• Priorities: Honeywell is prioritizing innovation in automation and control solutions, maintaining strong cash flow, and expanding their digital offerings across key industries.

Toyota Motor Corporation

• Initiatives: Toyota is leading in automotive manufacturing, with a strong focus on hybrid and electric vehicles. They are also investing in AI and robotics to enhance production efficiency.
• Risks: Toyota faces risks related to global supply chain disruptions, particularly in semiconductors, and fluctuating demand in different regions. The transition to electric vehicles presents both opportunities and challenges.
• Priorities: Toyota’s priorities include maintaining leadership in automotive innovation, expanding their EV lineup, and improving sustainability across their manufacturing processes.

5. 3M Company

• Initiatives: 3M is focused on innovation in materials science, expanding its healthcare products, and improving sustainability in its operations. They are also leveraging digital technologies to enhance their manufacturing processes.
• Risks: 3M faces risks from regulatory changes, litigation related to environmental and product liabilities, and economic volatility affecting demand for their products.
• Priorities: 3M is prioritizing innovation in core product areas, enhancing sustainability initiatives, and managing risks related to litigation and regulatory compliance.

These summaries provide an overview of each company's current focus areas, the challenges they face, and where they are directing their resources to maintain competitiveness in the manufacturing sector.

Headwinds

When selling into an industry that is facing headwinds, your job is to build a narrative to put them into context. Choose a number of the statistics that prove the headwinds are real. You can strengthen your point by including a couple of examples of other companies that were harmed by the headwinds.

1. Supply Chain Disruptions

• Statistics:
  • 74% of manufacturing companies experienced supply chain disruptions due to geopolitical tensions in 2023 (Industry Today).
  • The average lead time for critical components increased by 87% in 2023, impacting production schedules (Genpact).
• Examples:
  • Toyota faced significant production cuts due to semiconductor shortages, resulting in a reduction of global output by 40% in several months (Industry Today).
  • Apple delayed the launch of some of its products due to supply chain bottlenecks, particularly in chip production (Genpact).

2. Labor Shortages

• Statistics:
  • The manufacturing sector reported over 800,000 unfilled positions in the U.S. as of 2023 (NAM).
  • By 2030, the global manufacturing industry is projected to have a shortfall of 2.1 million skilled workers (L2L).
• Examples:
  • Boeing experienced delays in aircraft production due to a shortage of skilled workers, affecting its ability to meet delivery schedules (NAM).
  • Siemens faced challenges in maintaining production efficiency due to labor shortages, particularly in its European plants (L2L).

3. Energy Costs

• Statistics:
  • Energy costs are projected to rise by 15% in 2024, significantly increasing operational expenses for manufacturers (NAM).
  • 70% of manufacturers reported that energy price volatility had a direct impact on their profitability in 2023 (L2L).
• Examples:
  • ArcelorMittal had to reduce production at some of its European plants due to soaring energy prices, impacting its overall output (Genpact).
  • BASF scaled back operations in high-energy–consuming facilities due to rising costs, affecting its profit margins (Industry Today).

4. Economic Uncertainty

• Statistics:
  • 68% of manufacturing executives cited economic uncertainty as a major challenge impacting their strategic planning for 2024 (Genpact).
  • Global manufacturing output growth has remained stagnant since the second half of 2022, reflecting broader economic instability (L2L).
• Examples:
  • Caterpillar saw a reduction in orders from key markets like China and Europe due to economic slowdowns, impacting its revenue growth (Industry Today).
  • 3M reported lower-than-expected earnings in 2023 due to reduced demand across multiple sectors, driven by economic uncertainty (NAM).

5. Regulatory and Compliance Pressures

• Statistics:
  • 65% of manufacturers expect new regulations to increase their operating costs by 10-15% over the next three years (L2L).
  • Stricter environmental regulations are projected to cost the manufacturing sector up to $500 billion by 2030 (Genpact).
• Examples:
  • ExxonMobil had to invest significantly in new technologies to comply with stricter emissions regulations, affecting its profitability (NAM).
  • Dow Chemical faced delays and additional costs in expanding its U.S. operations due to regulatory hurdles (Industry Today).

These headwinds illustrate the complex challenges manufacturing companies will face in the coming years. The statistics and examples highlight the real-world impacts these issues have already had on major players in the industry.

Tailwinds

Tailwinds are forces that create an environment where your client can tap into new opportunities. By identifying the tailwinds in the industry, you can provide clients with a solution that allows them to take advantage of these tailwinds. Like the headwinds, you need data, citations, and stories that bring them to life for the client.

1. Digital Transformation and Industry 4.0

• Statistics:
  • 86% of manufacturing executives believe that smart factory solutions will drive competitiveness in the next five years (Industry Today).
  • Investment in industrial IoT (Internet of things) is expected to reach $267 billion by 2025, significantly boosting efficiency in manufacturing (Genpact).
• Examples:
  • Siemens implemented advanced IoT technologies in its "smart factories," resulting in a 15% increase in production efficiency (NAM).
  • GE leveraged AI and digital twins to optimize its manufacturing processes, leading to a 20% reduction in downtime (L2L).

2. Reshoring and Nearshoring

• Statistics:
  • U.S. reshoring efforts brought back nearly 350,000 jobs to the manufacturing sector in 2022, the highest in decades (NAM).
  • 58% of manufacturing companies are considering reshoring or nearshoring to improve supply chain resilience (L2L).
• Examples:
  • Intel invested $20 billion in new chip manufacturing plants in the U.S., aiming to reduce dependency on foreign suppliers (Genpact).
  • Apple started to shift some of its production from China to Vietnam and India, enhancing supply chain security (Industry Today).

3. Sustainability and Green Manufacturing

• Statistics:
  • 75% of global manufacturing companies have committed to net-zero emissions targets by 2050 (Genpact).
  • The market for sustainable manufacturing technologies is projected to grow by 24% annually through 2027 (L2L).
• Examples:
  • Unilever implemented a circular economy approach in its manufacturing processes, reducing waste by 30% (NAM).
  • Tesla built its Gigafactories with a focus on sustainable production, using renewable energy sources for up to 100% of its operations (Industry Today).

4. Government Incentives and Policy Support

• Statistics:
  • The U.S. government allocated $52 billion for domestic semiconductor manufacturing through the CHIPS Act, aimed at boosting local production (Industry Today).
  • Manufacturing companies in the U.S. can access up to $100 billion in incentives for adopting clean energy technologies by 2030 (Genpact).
• Examples:
  • Ford received significant tax incentives to build new EV manufacturing plants in Tennessee and Kentucky, part of its $11 billion investment (NAM).
  • General Motors benefited from federal tax credits to accelerate its transition to electric vehicle production (L2L).

5. Advanced Manufacturing Technologies

• Statistics:
  • The global market for additive manufacturing (3D printing) is expected to grow from $12.6 billion in 2020 to $51.8 billion by 2030 (NAM).
  • 59% of manufacturers are investing in advanced robotics to increase productivity and reduce labor costs (L2L).
• Examples:
  • Boeing has integrated 3D printing into its aircraft manufacturing, reducing production time by 40% (Industry Today).
  • Adidas uses advanced robotics in its Speedfactory, significantly cutting down production cycles and labor costs (Genpact).

These tailwinds represent key drivers that are propelling the manufacturing industry forward, enhancing efficiency, sustainability, and competitiveness in the global market. The statistics and examples provide a clear view of how these trends are impacting real-world companies.

Manufacturing Industry Summary for Sales Professionals

The manufacturing industry is currently navigating a complex landscape characterized by significant challenges and promising opportunities. Understanding these dynamics is crucial for sales professionals aiming to succeed in this sector.

Key Headwinds

1. Supply Chain Disruptions: Geopolitical tensions and global events have led to severe supply chain disruptions, with 74% of companies reporting difficulties in 2023 (Industry Today). As a result, lead times and production delay have increased, as seen at Toyota and Apple, two companies facing significant production challenges due to semiconductor shortages (Industry Today) (Genpact).
2. Labor Shortages: The industry is grappling with a critical shortage of skilled labor, with over 800,000 unfilled positions in the United States (NAM). This shortage is projected to worsen, impacting companies like Boeing and Siemens, which have struggled to meet production demands (NAM) (L2L).
3. Energy Costs: Rising energy prices, projected to increase by 15% in 2024, are putting additional pressure on manufacturing costs (NAM). Companies like ArcelorMittal and BASF have already scaled back operations due to these cost pressures (Genpact) (Industry Today).
4. Economic Uncertainty: Economic instability remains a significant concern, with 68% of executives citing it as a major challenge for strategic planning (Genpact). Companies such as Caterpillar and 3M have felt the impact, reporting slower growth due to reduced demand (Industry Today) (NAM).
5. Regulatory and Compliance Pressures: Increasingly stringent regulations, especially around environmental standards, are expected to raise operating costs by 10–15% (L2L). ExxonMobil and Dow Chemical have faced significant financial and operational impacts as a result of these pressures (NAM) (Industry Today).

Key Tailwinds

1. Digital Transformation and Industry 4.0: The push toward smart manufacturing is a major growth driver, with 86% of executives identifying it as critical for future competitiveness (Industry Today). Companies like Siemens and GE are leading the way in integrating IoT and AI into their operations, resulting in significant efficiency gains (NAM) (L2L).
2. Reshoring and Nearshoring: In response to supply chain vulnerabilities, many companies are bringing production closer to home. The U.S. alone saw nearly 350,000 jobs return to its manufacturing sector in 2022 (NAM). Intel and Apple are key examples, investing heavily in domestic and nearshore facilities (Genpact) (Industry Today).
3. Sustainability and Green Manufacturing: The shift toward sustainable practices is both a regulatory requirement and a market opportunity. With 75% of global manufacturers committing to net-zero targets by 2050, companies like Unilever and Tesla are making significant strides in green manufacturing (Genpact) (Industry Today) (NAM).
4. Government Incentives and Policy Support: Government initiatives, such as the U.S. CHIPS Act, are providing substantial financial support for domestic manufacturing. Ford and General Motors are among the beneficiaries, receiving incentives to boost electric vehicle production (Industry Today) (NAM).
5. Advanced Manufacturing Technologies: The adoption of technologies like 3D printing and robotics is transforming production processes, with the market for these technologies expected to grow significantly (NAM) (L2L). Boeing and Adidas are leading examples of companies leveraging these advancements to enhance production efficiency (Industry Today) (Genpact).

Conclusion

For sales professionals, understanding these headwinds and tailwinds is crucial to navigating the manufacturing sector. Tailoring your approach to address the specific challenges and opportunities faced by manufacturers can lead to more effective sales strategies and stronger client relationships. By staying informed about industry trends and leveraging the right solutions, sales professionals can position themselves as valuable partners in their clients' success.

In my research, I look for data, citations, and stories because they can help the client understand that change is a must.

I also use 20 headwinds and 20 tailwinds, giving me more possibilities to build an answer to the question “Why change?” I always include the supporting information as a set of insights.