The European manufacturing sector has traditionally been a key driver of innovation, job creation, and economic growth. However, recent times have posed significant challenges as a result of changing economic conditions, political disputes, and global crises on multiple fronts. In fact, there is a steep decline of up to 21% in demand for machinery manufacturing in Europe, while an increased demand for investments in connectivity and software for the products.
The key reason for this paradigm shift is that more and more customers are increasingly open to leasing equipment such as tractors, commercial washing machines, and other capital goods to optimise their costs instead of buying them. To remain competitive in such evolving conditions, European manufacturers need to go beyond just selling high-quality products and also embrace new business models that allow for leasing and a pay per use model. In the new paradigm, businesses must focus on improving after-sales service, incorporating automation, and exploring new commercial models for their products.
Manufacturers must use new-age technologies—specifically IoT, CRM, and payment gateways—to achieve these objectives. IoT technology and sensors will enable real-time tracking of leased equipment, Customer Relationship Management (CRM) systems to track equipment utilisation and billing, and a modern payment gateway for payments. With these technologies, manufacturers can create an innovative pay per use model that can provide multiple benefits—such as expanding their customer reach, enabling dynamic pricing, being closer to customers and collecting direct feedback, identifying upselling opportunities, creating annuity business with innovative subscription models—while still helping their customers boost their operational efficiency.
Persistent’s approach to enabling this paradigm shift in manufacturing
Persistent has solutions that directly enable manufacturers to realise these innovative business models and commercial strategies. We employ a versatile suite of Software AG webMethods integration with Salesforce for CRM, Mambu platform for payment gateway, and Software AG Cumolocity for IoT-based logistics. This combination of application integration, Business Process Management (BPM) tooling, and Application Programming Interface (API) integration allows us to seamlessly connect these disparate systems to create a unified business model.
Our approach not only facilitates manufacturing processes but also fosters an innovative, customer-centric manufacturing industry paradigm. The solution addresses current challenges faced by manufacturers, dealers, and end users proactively by implementing a viable commercial model, establishing global equipment connectivity for data collection, developing digital services from interconnected equipment, and providing after-sales services for comprehensive client relationship management.
A practical use case of pay per use equipment leasing
Here is a practical scenario involving a small-scale farmer seeking a cost-effective seasonal land-tilling solution without investing in a seldom-used large tractor.
In the above scenario, the tractor manufacturer is able to expand their customer base with an advanced pay per use model, while enhancing the customer journey with superior after-sales support. Our system, powered by Salesforce, IoT, and sophisticated payment platforms like Stripe and Mambu, provides considerable benefits to mid-sized manufacturers, distributors, and end users alike. We also harness crowd-sourced data from globally linked devices to create advanced digital services and help provide a unified view of customer relationships. Our pay per use model is distinguished by its seamless integration of multiple devices and equipment, maintenance of high-performance standards, efficient administration of customer base, and provision of secure payment options.
The future of manufacturing in Europe is all about embracing innovative business models. It will be marked by increased automation, AI-driven optimisation, and seamless connectivity across the entire value chain, leading to greater efficiency, sustainability, and adaptability in a rapidly evolving manufacturing landscape. With Persistent’s expertise, manufacturers can position themselves as industry leaders by adopting sophisticated commercial models and delivering exceptional customer experiences.
Connect with us to learn how Persistent can help you on this transformative journey.
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