MAJOR MANUFACTURING CHALLENGES7

And the Communication Solutions That Can Solve Them

• 7 MAJOR MANUFACTURING CHALLENGES

Page 2 of 16

The manufacturing industry has long been a powerful force in the world economy. Manufacturers create the many goods people use every day for business, recreation and to meet their basic needs.

From lawn fertilizer to auto parts, manufacturing makes dreams a reality. The industry has a storied past, and there’s no fear that global manufacturing will suddenly shut down, but changes will impact this sector in one way or another. Doing business “the way you’ve always done it” isn’t the best strategy in the face of new challenges.

The manufacturing industry will survive, but individual companies may rise and fall depending on how they respond to seven major challenges impacting the market today. And believe it or not, the right communication strategy is the key to survival.

• 7 MAJOR MANUFACTURING CHALLENGES

Page 3 of 16

CHANGING CONSUMER TRENDSAs years pass, consumer demand changes, and that has a direct impact on manufacturers. There was a time when smoking cigarettes was a commonly accepted practice and was even marketed as a healthy activity. But changing opinions have drastically reduced the cigarette industry’s market share.

Now, a similar trend is occurring with sugary foods and beverages. A study released in 2017 measured how many children and adults drank a sugary beverage — like pop and fruit juice — on any given day in 2014. The results showed a reduction of 19 percent for children and 11.5 percent for adults when compared to numbers collected in 2003.1

That trend has led beverage giants like Coca-Cola to look for new ways to diversify. In that spirit, Coca-Cola announced its purchase of Costa Coffee for $5.1 billion, and it even started looking into adding cannabidiol (CBD), a chemical in marijuana used for medicinal purposes, into its product line.2

SOLUTION: Listening to Customers and Compiling DataConsumers decide what products thrive in the market, so manufacturers must make digital transformation a priority. It’s important to keep up with consumer demands. Pay attention to what’s being said about you on social and traditional media sources with media monitoring. Also, gather information from surveys and unsolicited consumer complaints. A contact center solution that makes it easy to track every comment made about your business over the phone or online will help manufacturers respond to changing trends as they happen.

CLOUD CONTACT CENTER

LEARN MORE

• 7 MAJOR MANUFACTURING CHALLENGES

Page 4 of 16

GREATER COMPETITIONAs consumer demands change, doors open to new competitors. Whether a disruptor enters the market with the same business strategy or tailors their offering to a new niche, upstart businesses can quickly take a bite out of an existing company’s market share.

Research from Deloitte predicts the U.S. will take over the top position as the world’s most competitive manufacturing country, pushing China to number two by 2020.3 That’s good news for U.S. manufacturers, but it’s also a call to do whatever it takes to remain relevant and compete at the highest level.

Near the top of the list is, of course, to produce quality products. But manufacturers will also be looking to lower operating costs. That may mean building new facilities where land is less expensive, which can lead to a wide footprint. Even when employees are working around the country or around the world, it’s crucial to maintain internal communication as if they were just across the hall.

SOLUTION: Connect Coworkers in the CloudPhone, web and video conferencing solutions provide a wide array of options to keep your business connected. Instead of installing hardware in every location, consider a cloud-based solution to cut costs and make your communication needs more manageable.

HOSTED VOICE AND NETWORKS

LEARN MORE

• 7 MAJOR MANUFACTURING CHALLENGES

Page 5 of 16

CASE STUDYWith more than 60 geographically dispersed sites, Scotts Miracle-Gro’s executive and IT teams were looking for a solution that would unite all sites on a common unified communications platform. There was ongoing dissatisfaction with their existing on-premises PBX, which was also approaching end-of-life. At the time, voice and data were each handled by different providers.

West provided Scotts with a robust solution that addressed the specific needs of the company, delivered as a complete package by a single provider. West's solution design team offered Scotts a truly consultative sales process, and the team gained a thorough understanding of Scotts’ business, inside and out. After the consulting phase, Scotts decided to go with VoiceMaxx CE, West's hosted enterprise voice platform solution that includes phone service, integrated messaging, presence and IM, mobility and conferencing.

West also provides Cloud Contact, a hosted contact center solution with sophisticated inbound call routing abilities, and MaxxConnect for SIP trunking for cost savings and efficiency across the Scotts enterprise. For enhanced reporting, Scotts leverages the MaxxPoint web-based management portal to gain real-time access to the voice and data traffic traversing their network.

By working with West to install a complete unified communications platform, Scotts is now able to experience rich communications for both in-office and remote workers across all of its 60+ locations. Using the MaxxPoint web portal, Scotts has real-time access to the voice and data traffic riding their network, and can see the exact same information that's being monitored in the West NOC/VOC on a 24/7/365 basis, enabling Scotts to make more informed decisions. The company has been able to drive down the costs of their communications and benefits from a more budget-friendly OPEX model.

Page 5 of 16

• 7 MAJOR MANUFACTURING CHALLENGES

• 7 MAJOR MANUFACTURING CHALLENGES

Page 6 of 16

SELLING DIRECTLY TO CONSUMERSFor manufacturers who create finished consumer products, there is a new expectation to consider: direct selling to end users. Former retail giants like Toys “R” Us and RadioShack have nearly shut down entirely as consumers look for new ways to buy their goods. Meanwhile, manufacturers are acquiring or partnering with direct-to-consumer businesses, like Unilever with Dollar Shave Club, Target with Harry’s shaving products and Casper mattresses, and Campbell Soup with Chef’D.4

We all know consumers are moving online. According to PwC’s 2018 Global Consumer Insights Survey, 61 percent of consumers buy products online monthly or more frequently. And when it comes to buying in bulk, 20 percent are more likely to order everyday items from the manufacturer’s website than from a retailer website.

That means one-fifth of consumers wanting a product go to the manufacturer’s website first. Selling directly to consumers lets manufacturers control the brand and the cost, but an effective ecommerce and customer service model must be put in place first.

SOLUTION: Contact Center and IVRMaybe you already staff a contact center, through which consumers or retailers can call to voice complaints. If so, then just expand what you have to handle increased traffic, and consider adding an IVR to address common customer concerns. Check out tips to optimize these solutions on west.com.

IVR AND SELF-SERVICE

LEARN MORE

• 7 MAJOR MANUFACTURING CHALLENGES

Page 7 of 16

TRAINING AND STAFFINGChallenges for manufacturers don’t just come from the outside. Internally, finding the right staff can always be difficult, and as a company’s footprint spreads farther across the country (or across the globe), maintaining consistent standards can start to feel like an impossible task.

The key is good training and consistent follow up with staff members at every location. That can be done by traveling from site to site, but that takes a lot of time, and travel expenses add up fast.

Alternatively, many companies across multiple industries choose digital solutions instead. According to IDC, by 2020, 25% of Global 2000 companies will develop digital training programs and digital cooperatives to compete more effectively in talent wars.5

This gives them the freedom and convenience of staying in touch with key staff members wherever they are, but there’s a risk of sacrificing the personal connection built by a face-to-face interaction, and there’s no guarantee everyone on the other line is truly paying attention.

SOLUTION: Host a WebcastWebcasts are an excellent way to share information, as the medium merges audio and visual stimuli to create an engaging experience. While the webcast is live, you can see who’s listening on the other end, and the entire interaction can be saved for future viewers, creating a wealth of training materials to bring new hires up to speed.

WEBINARS AND ENTERPRISE STREAMING

LEARN MORE

• 7 MAJOR MANUFACTURING CHALLENGES

Page 8 of 16

CASE STUDYIngersoll Rand sells a home air conditioner every minute of every day. Between its Trane and American Standard Heating and Air Conditioner brands, that’s more than a half million units annually. The company sells through more than 300 distributors that sell to 10,000 dealers who make final sales to homebuilders and homeowners.

When talking to distributors, product features of air conditioners can be communicated effectively with PowerPoint slides during webcasts, but educating channel partners how to use new software goes best when a presenter can visually illustrate by “sharing the desktop” on a webcast.

Ingersoll Rand selected the latest version of West's webcast platform to share the presenter’s desktop in live training for the new software programs. Presenters found the webcast studio easy to use with an exceptional user interface. The company also said the service “works a lot more professionally than Live Meeting” and praised the ability to create separate templates for each brand (Trane and American Standard). Plus, West’s pricing allows them to present unlimited webcasts and keep their budget intact.

After training 300 Trane distributors and 250 American Standard dealers in a total of four sessions, even distributors were asking what webcasting platform they were using. Participants registered, logged into and joined the webcast more easily than with other platforms that Ingersoll Rand had used, requiring less troubleshooting.

Page 8 of 16

• 7 MAJOR MANUFACTURING CHALLENGES

• 7 MAJOR MANUFACTURING CHALLENGES

Page 9 of 16

EVOLVING TECHNOLOGYAdopting new technology is a familiar concept for many manufacturers. Automation becomes more important with every passing year, and engineers dedicate countless hours to creating new machines that work more effectively and efficiently.

Now, as consumer demands change and manufacturers are expected to have the same customer service as businesses like retailers and banks, it’s time to apply those same standards to communication technology.

Fortunately, that won’t require the same amount of resources. While new manufacturing equipment is specialized for a single product or company, cloud services are able to adapt easily to changing trends, and incorporate new features faster than solutions that are managed on premise. Cloud services are then better suited to react to changing behaviors and market trends, and the rollout of new channels and features is simpler, as it doesn’t require a lot of manual effort on behalf of the IT team.

SOLUTION: Engage in New Communication ChannelsThere are plenty of ways for customers to interact with their favorite brands. They can call over the phone, send a text, chat online or write an email. They can use a digital assistant, like an IVR or chatbot. Or they could post their thoughts on social media for everyone to see. Determine your target audience, identify the channels they use and employ a cloud-based, proactive communication plan to give them a great experience.

PROACTIVE AND MOBILE COMMUNICATION

LEARN MORE

• 7 MAJOR MANUFACTURING CHALLENGES

Page 10 of 16

CASE STUDYAfter an acquisition by a holding company, Morrison Supply Company set out to upgrade their technology infrastructure to ensure it had the ability to grow with them. At the time, the company was using an old version of Cisco Call Manager for their voice service and a variety of open source products for other office needs. The combination resulted in spotty and unreliable service at times.

After initially reaching out to update their productivity solutions with Microsoft Office 365, Morrison Supply asked West to upgrade its voice and data capabilities as well. Together, West and Morrison Supply chose cloud-based VoiceMaxx CE, which includes Cisco HCS. And West would deploy Office 365 across the organization to unify the company on a single, hosted email platform with access to tools that would boost employee productivity.

West took over management of the company’s existing data agreement with another provider for the remainder of their contract, and when complete, transitioned Morrison to West’s Maxxis application-aware network. The move brought all communications services on a single, unified network, simplifying both the management and billing aspects of their communications infrastructure.

Morrison Supply continues to grow through acquisition. As they do, VoiceMaxx CE and Office 365, delivered securely and reliably over the Maxxis network, easily scales to their new users and new locations. The company also uses InterCall conferencing, West Cloud Contact for call center capabilities, and MaxxSecure for complete network security.

The Morrison IT team no longer has to travel to every single location to make changes to their phone system or make a network adjustment. All management is centralized in an easily accessible online portal. And the new phone system and contact center capabilities help Morrison meet the needs of both workers and customers.

Page 10 of 16

• 7 MAJOR MANUFACTURING CHALLENGES

• 7 MAJOR MANUFACTURING CHALLENGES

Page 11 of 16

BUILDING LOYALTY WITH RETAILERS AND END USERSIn his book, The Loyalty Effect, author Fred Reichheld says a 5 percent increase in customer retention can lead to a 25 to 100 percent increase in profit, and the best way to retain customers is by creating an excellent experience. According to a study by Segment, 44 percent of consumers say they will likely become repeat buyers after a personalized shopping experience.6

Manufacturers can take advantage of that fact by first creating products people want to continue buying and, second, by creating positive experiences for customers, retailers and distributors.

But there’s a third factor, too. It’s also important to maintain loyalty with the public. Major public relations disasters like BP’s Deepwater Horizon oil spill in 2010 can hang over a company’s head for years. But even small issues — like a safety issue or inconsiderate remark from a staffer — can seriously damage a company’s reputation.

SOLUTION: Be Prepared for Any PR MishapYou can build loyalty using any of the solutions mentioned in this document. But when things go wrong, you need to maintain that loyalty using proactive communication and good public relations. West has a variety of PR solutions to help you communicate with the public, which can actually help build loyalty even when facing a problem.

DIGITAL COMMUNICATIONS

LEARN MORE

• 7 MAJOR MANUFACTURING CHALLENGES

Page 12 of 16

GLOBALIZATIONThe United States may soon become the most competitive manufacturing country in the world, but the fact remains that both competition and opportunities are growing overseas.

Deloitte expects especially rapid growth in the Asia Pacific nations of Malaysia, India, Thailand, Indonesia and Vietnam, which are expected to be included in the top 15 most competitive manufacturing nations by 2020 and “could represent a ‘New China’ in terms of low-cost labor, agile manufacturing capabilities, favorable demographic profiles, as well as market and economic growth.” 7

Global expansion poses logistical, cost, productivity and staffing issues, and maintaining on-site technology becomes a challenge. Implementing a consistent set of tools and solutions across locations becomes key to keeping expenses down and keeping everyone in your business connected.

SOLUTION: Collaborate on a Global ScaleVideo, webchat and phone solutions are just some of the ways you can keep your organization connected. Whether you use tools built by Cisco, Microsoft or another company, West has solutions to help you build a communication ecosystem that matches your specific needs.

CONFERENCING AND COLLABORATION

LEARN MORE

• 7 MAJOR MANUFACTURING CHALLENGES

Page 13 of 16

CASE STUDYLike many other companies, a major U.S. electronics manufacturer was forced to move parts of its production to Asia, which presented a challenge for its already aging and piecemealed communications infrastructure. In addition, the company had problems with its internal surf control for anti-spam, which incorrectly blocked users without explanation.

West not only cleaned up the company’s network situation but boosted its performance, resiliency and transparency by implementing the Maxxis Application Network. A completely private, fast and flexible solution that prioritized voice, video and data applications, Maxxis consolidated all traffic onto a single, easy-to-manage network infrastructure.

To ensure network security, the manufacturer implemented the completely managed MaxxSecure solution for advanced spam filtering, intrusion detection and prevention, virtual private networking, virus and spyware protection, and web content monitoring and filtering, as well as colocation services, which keep servers located on-net with the West platform, simplifying its communications infrastructure by limiting the amount of routers used.

West also designed several ad hoc solutions, including assistance with managing Cisco Call Managers at Indian and Mexican locations and VPN access to other international locations.

With Maxxis and MaxxSecure, the company’s communications infrastructure is more solid with fewer interruptions in service. Having West manage the installation and day-to-day operation of the network saves the company time and headaches and allows staff to focus on more mission-critical objectives.

• 7 MAJOR MANUFACTURING CHALLENGES

Page 13 of 16

• 7 MAJOR MANUFACTURING CHALLENGES

Page 14 of 16

WHY MANUFACTURERS CHOOSE WESTAt West, we’re dedicated to a single proposition — making communication easy. Whether it’s coworkers across the office or partner firms around the globe, enabling that connectivity is the hallmark of our work. Our mantra? We Connect. We Deliver. Every person on the West team is focused on providing solutions and services that make better connections and deliver real results — not just for our customers, but for our customers’ customers.

With West, you have a single vendor for all business communications needs, including voice, network, contact center, conferencing, enterprise streaming, E911 and safety services, alerts and notifications, and even public relations solutions. West handles the complex stuff so you don’t have to. That’s why we dedicate so much time, energy and investment in the communications and collaboration space. Business communications includes many pieces, and West helps you put them all into place.

To get started with your digital and customer experience transformation, contact a West expert at 800.841.9000 or visit us online at west.com.

• 7 MAJOR MANUFACTURING CHALLENGES

Page 15 of 16

SOURCES1 Bakalar, Nicholas. "Americans Are Putting Down the Soda Pop." The New York Times. November 14, 2017. https://www.nytimes.com/2017/11/14/health/soda-pop-sugary-drinks.html.

2 Deloitte. "United States Expected to Take Top Position from China as the Most Competitive Manufacturing Country, According to Deloitte Report." Deloitte. June 09, 2016. https://www2.deloitte.com/bh/en/pages/about-deloitte/ articles/us-to-take-top-position-china-manufacturing.html.3 IDC. “IDC Reveals Worldwide Digital Transformation Predictions.” IDC: The Premier Global Market Intelligence Company. IDC. 1 Nov. 2017, www.idc.com/getdoc.jsp?containerId=prUS43188017.

4 PwC. "New Business Models in the E-commerce Era." Global Consumer Insights Survey 2018. https://www.pwc.com/gx/en/retail-consumer/assets/business-models-global-consumer-insights-survey.pdf.

5 Segment. "The 2017 State of Personalization Report." Segment. 2017. http://grow.segment.com/Segment-2017-Personalization-Report.pdf.6 Skerritt, Jen, and Craig Giammona. "Coca-Cola Is Eyeing the Cannabis Market." Bloomberg.com. September 17, 2018. https://www.bloomberg.com/news/articles/2018-09-17/coca-cola-eyes-cannabis-market-in-push-beyond-sluggish- sodas.

© 2018 West Corporation. All rights reserved. EOE/AA Employer181019NS-002-WP-7 Major Manufacturing Challenges

ABOUT WESTWest Corporation is a leading global provider of technology-driven communication services that help its clients more effectively communicate, collaborate and connect with their audiences through a diverse portfolio of solutions. These solutions include unified communications services, safety services, interactive customer services, specialty agent services, telecom services and digital communications. For over 30 years, West has provided reliable, high-quality voice and data services. West has sales and/or operations in the United States, Canada, Europe, the Middle East, Asia Pacific, Latin America and South America. For more information, please call 1-800-841-9000 or visit www.west.com. For more information about West’s Unified Communications solutions, please call 1-855-544-0455 or visit www.westuc.com.