Global manufacturers focus on innovation and supply chains

KPMG report finds

 Manufacturers are operating in an environment of disruptive complexity, where factors such as intense competition, pricing pressures and new technologies are forcing companies to evaluate business models and growth strategies, according to the 2015 KPMG Global Manufacturing Outlook (GMO) survey.
In a survey of 386 senior manufacturing executives, KPMG’s GMO survey finds that manufacturers see investing in breakthrough technologies as a “must do”. More than two-thirds of respondents confirm they are focused on long-term innovation strategies, with an expectation for increased investment in R&D and new manufacturing technologies.
44 percent of global survey respondents say they will allocate more than 20 percent of their total technology spend on systems to improve the pace and value of innovation—engineering, manufacturing and supply chain—in the next year.
“Investing more in R&D is certainly helpful, but manufacturers need to also focus on continuously enhancing and adapting their innovation models if they hope to survive,” says KPMG’s Global Head of Industrial Manufacturing, Jeff Dobbs.

Collaborative innovation models

In order to improve speed-to-market and lower innovation costs, manufacturers are increasingly looking to, and collaborating with, suppliers, customers and third party research organizations.
Dobbs comments, “The focus on new product development, collaborative innovation and speed-to-market all require new strategies and business models. If manufacturers hope to grow by driving new innovations to market, they need to focus on improving the agility and integration of their supply chain models.”
Looking into supply chains, almost half of all survey respondents cite lowering costs and working capital levels as their top strategic supply chain priorities, while lack of flexibility and responsiveness to changes in demand or product mix is the top supply chain challenge.
Just eight percent of U.S. respondents say they have complete visibility into their supply chain. In fact, U.S. respondents are almost twice as likely to say their supplier data is not reliable enough and that their technology is not sophisticated enough for greater integration.