Posted By Paul Tate, May 14, 2014 at 4:49 AM, in Category: The Innovative Enterprise
A new global survey, released today, reveals that many global companies see the U.S., the U.K. and China as the top three target markets for future manufacturing sales growth in the year ahead.
The Global Manufacturing Outlook report, compiled by Forbes and KPMG International, is based on interviews with 460 senior manufacturing executives around the world.
The report suggests that the U.S. remains well out in front of the rest of the world in terms of potential manufacturing sales growth for the future, scoring top of the global list at 45%, with the U.K. and China in joint second, each with 17%.
Global manufacturing companies also see the same three countries topping the list for generating the most manufacturing profits growth in future too, closely followed by Germany in fourth place.
However, the KMPG report also concludes that most manufacturers are still having serous difficulty in determining the potential profitability of their products, with only 12% considering themselves to be “very effective” at this critical task. 85 percent of respondents also said they plan to make either “moderate” to “substantial” investments into systems for product or service cost improvement over the next 12-24 months.
“This isn’t simply about mining data and building spreadsheets; it’s about accessing the appropriate information, at the right level of granularity and – maybe most importantly – with the right speed and frequency to generate timely insights that help people make better business decisions,” noted KPMG Management Consulting Partner Jim Scalise.
Among the reports other key findings are:
- Supply Chain Visibility: 40 percent acknowledge they still only have limited information and material visibility across their supply chains today. However, 74 percent expect to be able to achieve a globally integrated supply chain in the next 3-5 years. Thirty eight percent say they still lack critical details on supplier performance, and 36 percent lack adequate supply chain IT systems. According to half of respondents, the biggest obstacle to achieving more visibility is a lack of mature technology, followed by lack of governance (19 percent) and lack of strategy (14 percent).
- Innovation: Almost half the respondents plan to double their R&D investment over the next 2 years and 88 percent say that partnerships will help them drive innovation in the future. There are also signs that breakthrough innovation is gaining importance as a strategy for 39 percent of industrial manufacturers, up 8 percentage points from KPMG’s 2013 survey and representing a 25 percent increase in companies pursuing such strategies.
“The manufacturing world is in an era of hyper-innovation,” commented Jeff Dobbs, Global Chair of Industrial Manufacturing at KPMG. “Ultimately, those organizations that do not balance investment in ‘incremental innovation’ with investment in ‘breakthrough innovation’ may find themselves left behind competitively.”
Written by Paul Tate
Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive