By Richard Stinson, Founder, Brookstone Creative Ltd | Leicestershire | 10 minute read
Many manufacturing companies operate production environments of genuine excellence while their commercial systems, the processes by which they attract, engage and win new customers, operate with far less discipline, consistency and strategic intent. The gap between operational and commercial quality is one of the most consistently overlooked commercial risks in manufacturing, and it is one that the best production-focused MDs are particularly poorly positioned to notice from inside the business.
Manufacturing companies tend to be run by people who are exceptionally good at making things.
That is not an observation. It is a significant structural fact about how most manufacturing businesses are founded and led. The MD who built the company usually came from a technical background. They understand processes, tolerances, yield rates, tool life and throughput. They have spent their career building an operation where every variable is measured, managed and continuously improved. The production system they have created reflects that discipline.
The commercial system they have built alongside it often does not.
Enquiry handling that relies on whoever picks up the phone. Quoting processes that depend on the availability of the right person rather than a defined system. Sales activity that is measured in conversations rather than outcomes. Marketing that is described as the website and the trade show. A pipeline that is updated whenever someone has time, rather than managed as a live commercial instrument.
The contrast between the two systems is striking when viewed from outside. The same company that has invested years of thinking in reducing process variation on the shop floor has never applied the same thinking to reducing variation in the commercial process. The same MD who can tell you the reject rate for every operation in the business cannot tell you what percentage of initial enquiries progress to quote, or what percentage of quotes convert to orders, or where in the process the most opportunities are being lost.
What commercially weak systems actually cost
The cost of commercially weak systems is real but largely invisible, which is part of why it persists.
A missed enquiry does not appear as a line item in the management accounts. A quote that arrived two days late and lost to a faster competitor registers only as a lost order. A new customer relationship that failed to develop because the onboarding was disorganised and the communication was inconsistent shows up, eventually, as customer attrition, but the commercial failure happened much earlier.
The manufacturing company that operates with process-level discipline on the shop floor but commercial-level informality in its sales and customer development function is consistently leaving commercial opportunity on the table. Not dramatically. Not visibly. Gradually, quietly, in the accumulation of enquiries not followed up, quotes not delivered, relationships not developed and customers not retained as well as they could have been.
The cumulative cost of these losses over five years is significant. The difficulty is that it cannot be measured directly, because what is being lost is opportunity cost rather than recorded loss.
The commercial losses from weak systems are invisible in the management accounts. They appear as absence: enquiries never chased, relationships never deepened, customers never retained as well as they could have been. The absence is the loss.
What commercially excellent systems look like in manufacturing
Applying manufacturing discipline to commercial systems means bringing the same principles, measurement, process definition, variation reduction and continuous improvement, to every commercial function.
Enquiry handling is a process with defined inputs, defined outputs, defined quality standards and defined timelines. It is measured. The conversion from enquiry to quote, from quote to order, and from first order to repeat relationship are known. Variation is identified and investigated in the same way that process variation on the shop floor is investigated.
The pipeline is not a spreadsheet that gets updated when someone has time. It is a live commercial instrument that reflects the actual status of every active opportunity, is reviewed at a defined cadence, and informs commercial resource decisions in the same way that production scheduling informs operational resource decisions.
Customer relationships are managed deliberately. The commercial equivalent of a preventive maintenance schedule: defined touchpoints with existing customers, proactive communication about relevant developments, awareness of changing requirements before they result in a tender that goes to a competitor.
None of this requires sophisticated technology or significant additional headcount. It requires the same thing that operational excellence requires: clear thinking about process, consistent application of standards, and the discipline to measure performance against defined objectives.
Questions manufacturing directors ask about commercial systems
Why do manufacturing companies often have stronger operational systems than commercial systems?
Manufacturing companies develop stronger operational systems than commercial systems because their founders and leaders typically come from technical backgrounds where operational discipline was the primary requirement for success. The skills that build a strong production environment, process thinking, variation reduction, systematic measurement, are the same skills that build strong commercial systems, but they are rarely applied to commercial functions with the same rigour. The production system is designed and continuously improved because the MD understands it intimately. The commercial system operates informally because the MD is less comfortable with it and less likely to challenge its performance with the same rigour.
How should manufacturing companies approach improving their commercial systems?
Manufacturing companies improve commercial systems by applying the same process thinking used in production: mapping the current process from enquiry to customer relationship, identifying where variation, delay and loss occur, defining what good performance looks like at each stage, measuring current performance against that standard, and implementing specific improvements. The approach is identical to continuous improvement on the shop floor. The discipline required is the same. The resistance from the commercial function is often similar to the resistance from production teams encountering their first systematic improvement programme.
Apply the same discipline to your commercial systems that you apply to your production
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About the author
Richard Stinson
Founder, Brookstone Creative Ltd | Leicestershire
