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KPMG's "Global manufacturing outlook" report highlights new challenges for sector


Posted on 5/08/2014 by Mark Nesbit

According to KPMG's 2014 report “Global Manufacturing Outlook: Performance in the crosshairs,” manufacturers are set to face a new set of challenges around product development strategies and supply chain, while it’s also been revealed that there is emphasis on understanding product costs and profitability.

The report highlights the following key findings:

  • Manufacturers are focused on understanding their product cost and profitability. Only 12 per cent of respondents said they were ‘very effective’ at determining product profitability. Many suggest that they plan to commit either moderate or significant investment into enhancing their systems and processes for profit and cost information. More than half say that – over the next two years – they will place either a moderate or high priority on adopting processes and systems to achieve the real-time measurement of product cost and profitability.

  • Organisations are rethinking their product development strategy. Respondents are increasingly focused on enhanced spending, shifting towards breakthrough innovation objectives and exploring new collaborative business models to create competitive advantage. Seventy per cent of respondents said they would double their level of spend in R&D. Yet at the same time, 88 per cent said that partnerships, not in-house efforts, would form the future of innovation. Technology is also coming into play; three-quarters of respondents say they are better leveraging decision-support technology in their R&D function.

  • Supply chain transparency and visibility remain a key challenge for manufacturers. Forty per cent of respondents admit they lack visibility across their extended supply chain, with 33 per cent saying it was due to either inadequate IT systems or a lack of skills. Our research suggests that many of the gains in supply chain visibility have resulted from stronger relationships between manufacturers and their top-tier suppliers and the willingness to share more real-time data across the value chain.

  • The majority of respondents think that they could achieve a globally integrated supply chain within the next three to five years. More than half say that they use global demand planning and global capacity planning technologies in their supply chain enterprise-wide. More than three-quarters say that their relationship with top tier suppliers is now strong enough for them to share real-time capacity and demand data.

Commenting on these findings, Managing Consultant at specialist recruitment company,Cast UK, Mark Nesbit points to the development of employee skill sets as key to effective relationship management and recruitment, which was highlighted in the KPMG report.

“As skills development and managing relationships with top-tier suppliers are noted as a priority, appointing experienced professionals that can harness these challenges and translate them into growth for the companies in which they operate will be key.

“From the report it’s clear to see that manufacturers are focused on profitable growth. Increasing levels of supply chain transparency and visibility; improving use of data, analytics and business intelligence tools; integration of new technologies; and a continuation of the trend towards greater partnerships and collaborative business models are at the forefront of these strategies.”

At Cast UK, all senior recruiters have either worked directly in logistics, procurement and supply chain or have extensive experience in our specialist areas. This business model ensures that recruiters are informed about the industry challenges faced by their clients and they can assist them with finding the right people to tackle these demands.

“It will be interesting to see how our clients approach these challenges, as this will surely shape recruitment strategies moving forwards. Furthermore, university programmes should take note of the findings and adapt to these new demands to ensure that professionals coming into supply chain, procurement or logistics understand the new role that these positions will play in business,” concludes Mark.

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