What role would you say that technology plays in your manufacturing business? Many businesses would agree that its use is indispensable, taking on an even more outsized role since the pandemic.
E-commerce technologies and data platforms have revolutionized how raw material suppliers connect with manufacturers — giving power to smaller businesses. Historically, raw material suppliers favored large orders from regional and global businesses, sidelining smaller manufacturers.
Today, digital platforms empower suppliers to work directly with all manufacturers, regardless of size. This change is significant, given that 75% of U.S. manufacturing firms can be considered small since they have fewer than 20 employees. To capitalize on this shift, business owners need data platforms.
Small manufacturing businesses, often family-owned, have long made valuable contributions to industries like automotive, medical, and electronics. Digital platforms empower them by facilitating direct connections with suppliers, offering around-the-clock access, streamlined procurement processes, and reduced costs. For suppliers, this means new sales channels and access to untapped markets — a win-win.
These platforms create a data value chain encompassing pricing, specifications, production details, and delivery dates — data that can be monetized through subscriptions or transactional models. This valuable data is transforming the supply chain, turning a necessary cost into a profit center. So how can manufacturers monetize their data platform investment? It starts with data-centric AI implementation.
— Haldun Dingec, Executive Director, Digital Production Techniques, Arçelik
Extracting value from massive amounts of manufacturing data can be like finding a needle in a haystack. However, AI is a purpose-built machine designed for that use. AI-powered analytics efficiently sifts through massive amounts of data, uncovering hidden patterns, correlations, and insights that would be impossible for humans to detect. This translates into:
Managing manufacturing data without a data platform is like driving a car without a road. The lack of infrastructure will eventually impede progress. Data platforms allow you to acquire, store, prepare, secure, and govern your data. However, all of this infrastructure takes resources. So how can manufacturers monetize their data platform investment in this AI-driven landscape? Here are a few strategies:
Raw material suppliers are leveraging data platforms to extend their revenue streams beyond traditional production while reducing costs. These sophisticated digital platforms are accessible to a wide range of companies and offer numerous benefits to manufacturers.
Europe’s Pinpools is a prime example of a successful data platform. This leading online marketplace serves over 100 chemical manufacturers, distributors, and buyers. Launched in 2017, Pinpools focuses on the European paint and coatings market. Buyers can use the website for free, while suppliers pay a monthly fee based on their sales volume, typically between one and three percent.
Another example is MetalMiner. Starting as a way to support their founder’s direct material cost consultancy, MetalMiner showed enough value to become an independent company in 2021. It provides manufacturers with real-time pricing data, market trends, and in-depth analysis of the metals they need, enabling them to make informed purchasing decisions, develop effective sourcing strategies, and optimize inventory levels.
These examples show how manufacturers benefit from data platforms and data democratization both as customers and vendors selling the data. To further emphasize the point, let’s briefly look at the internal organizational benefits for manufacturers.
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Partnerships are essential for companies looking to develop their own e-commerce data platforms. Collaborating with manufacturers and suppliers can facilitate knowledge sharing and cost savings while reducing risk.
Additionally, working with a data consulting partner offers immediate advantages, such as competitive due diligence and the ability to create working prototypes for industry-specific problems. Data strategy consultants also bring specialized knowledge and experience in data management, advanced data analytics, and platform technologies. These experts can help you:
Advanced technology and digital platforms are making it easier for raw material suppliers to collaborate profitably with smaller manufacturing companies worldwide. If you’re contemplating using data to create new digital revenue models, Nerdery’s strategy and data services offer agile partnerships and innovative technology implementation. Talk to one of our data strategy consultants to discuss ideas for your next data platform.
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