The first post, “Get In Line” described the anxiety sales and buyers are experiencing because of widespread shortages of manufactured products. It used the analogy of car buyers and dealerships during this summer of 2022. This post looks at industrial buyers and sellers.
In mainframe-times a new IBM model was a cause for rushed-orders (prepared well ahead of time) and speculation to the point of government inquiries about the process. Buying big ticket investments for production plants encounter global retooling and restructuring of production due to Covid-19, revolutions in core technologies in vehicles, sky-high energy prices, and logistics struggles. Add in talent conflicts and economic uncertainty. Big ticket plant and production equipment is even more like “ordering from a menu” than car-sales haggling.
Key industries are shifting demand: semiconductors, energy, commercial/infrastructure construction, large transportation, and defense. National investments focused on fossil fuel networks are shifting to green-energy affecting construction, transportation, and consumers. Defense industries are see a huge surge caused by Ukraine.
Suppliers and producers have a simple approach: take an order. Juggling who gets priorities can be complicated by government regulations (like the Defense Supply Act in the USA), conflict priorities, and simple considerations of complying with accounting rules about when revenue can be booked when shipping to a distant customer. Key takeaway: customers can’t really know where they sit in the ‘order book’ as the orders are not first-come-first-served. Orders are allocated by “profit margins first and almost always”. In contests between the CFO and a sales staffs’ credibility there are few doubts. More pressure is thereby placed on sales staff to sell “good deals” in challenging times.
If you'd like to see the first post in the series - www.ekalore.com/ars If you'd like to read other topics at ekalore - www.ekalore.com/blog-1
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