It’s a Pivotal Time for the California Manufacturing Industry

California is one of top states for manufacturing output and employment, known for supporting a wide variety of industries ranging from electronics and textiles to metals, corrugated, and plastics (and much, much more). At nearly double the employment and number of companies of most other top states, California manufacturing has a wealth of opportunity available to it — along with significant competition.

As with manufacturing industries in many other states, macroeconomic factors have made an impact on California manufacturing companies throughout 2022. Nationwide, the ongoing interest rate increases from the Federal Reserve to tamp down inflation have had a notable effect on the manufacturing industry, with companies reducing head counts via attrition and hiring freezes. Suppliers to major brands are also opening manufacturing sites in California, as travel to China is becoming increasingly difficult (this number has been growing and is likely to continue to grow, too) — resulting in the potential for increased competition in the long-term.

For the Golden State, All Hope is Not Lost

There has been greater investment into the manufacturing workforce in California as a result of recent grants. With these positive movements aiming to alleviate the labor challenges of recent years, California manufacturing companies may be better positioned to work through their backlogs while also making greater progress toward overall growth goals.

With the potential for increased competition, difficulty in forecasting demand due to a potential recession and high interest rates, and yet beneficial factors creating a sort of dissonance in terms of what to do next, it’ll be more important than ever for California-based manufacturing companies to ensure they’re in the best position possible to leverage every single opportunity that comes their way. Here, we’ll explore what California manufacturing companies should consider to do exactly that.

Key Considerations for Growth on the Road Ahead

1. Product: Sell What’s In Your Wheelhouse

There have been a variety of black swan events (an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences) over the past two years that have impacted both customer demand for and the ability of companies to produce certain products. While this has been a challenge for many organizations, it’s presented a new opportunity to focus on products that are better aligned with your capabilities and growth potential. Rather than partner with customers that need a variety of products, lower volumes, or more support than you can realistically offer, now is the time to qualify prospects up front to identify those whose needs match what you do well, efficiently, and at great margins.

2. Process: Divide and Specialize

The division of labor concept, designed to allow people and functions in an organization or process to specialize, can be applied to the sales function of a business. Currently, many manufacturers — for one reason or another — have to deal with tasks that don’t make an immediate impact on the bottom line. These include account management, marketing, and service matters. Even front-end sales duties can distract experienced sales team members from closing more deals and increasing revenue. The division of labor concept reallocates these responsibilities off your sales team’s plate, putting front-end tasks such as prospecting and nurturing in the hands of another team along with account management and service functions.

3. People: Position Talent for Effectiveness

Manufacturing sales teams today largely still utilize practices that are not as effective as they once were. Often, sales teams made up of older generations preferred to focus on relationship-building as a nurturing strategy rather than automating nurturing to match how prospects prefer to research solutions. Relationships are important, but consider: Did the relationship come first, or the sale? By no means are we suggesting that you rethink your team — just that you use them where they’re most effective. Adopting a solution that takes care of the front-end in a more automated, efficient way (that uses the division of labor strategy!) allows prospects to move closer toward the bottom of the funnel, where the sales team can more effectively use their skills to close a deal.

4. Measurement: Putting It All Together

If your sales team is using outdated, ineffective processes, it’s also likely that they’re not using analytics solutions to measure performance. Sure, you might have basics in place to assess some top-line and bottom-line figures, but what else can be improved? What about sales rep productivity and accountability? What about the effectiveness of your marketing efforts — and more importantly, how those influence sales performance? What about the overall ROI of your sales and marketing investments? Measuring these aspects of sales and marketing work is crucial for understanding what worked and making better decisions on what to do next.

Take the High-Growth Road in 2023

Don’t be one of the many companies that will pull back in fear of a potential recession. Be one of the companies that took a new approach — one that’s proven to work — to grow in a more structured, efficient, and effective way. Sell what you sell best. Use a process that streamlines your work. Maximize the efforts and talent of your people. And seek to understand what worked well and how you can use that to grow even more.

Our team is here to help you make it happen. Get in touch with us today.