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Accenture's global manufacturing study reveals that companies must have greater operational flexibility to substantially increase revenues and margins, boost production levels and improve labor efficiency.
The study, which included a survey of 250 senior executives from global manufacturing companies, shows that manufacturing companies’ business performance has improved since the recession. However, economic and market volatility, and operational inefficiencies could pose a major threat to their future growth.
Global Manufacturing Study 2013 Explore our global manufacturing study to learn more about the research methodology and survey findings.
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We explore how leading manufacturers build flexible and dynamic operations to accommodate changing market demands, and how they are able to squeeze more capacity and productivity out of the existing assets and infrastructure.
These leaders have a talent strategy in place that enables them to acquire or build the skills they need to compete effectively. Additionally, they focus on digitizing their businesses by making significant investments in information technology (IT) platforms.
From May to June 2013, we embarked on a research initiative designed to understand what is working well in the manufacturing sector, and what strategies manufacturers are adopting to adjust to the economic volatility and make their operations more nimble.
The study included a Web-based survey of 250 senior executives from global manufacturing companies headquartered in North America, Europe, South America and Asia. These companies represent six main industry sectors:
Some of the key findings that emerged from our survey of global manufacturers include:
Ninety-three percent of the executives said their companies have posted overall revenue growth since 2011.
Most executives were optimistic about continued growth in the future but cited various factors, such as global currency instability, unpredictable commodity prices and political unrest in key markets, as potential impediments.
Eight out of 10 manufacturers believe that flexible and dynamic operations are vital for growth.
Penetration into emerging economies will shift the source of manufacturers’ revenues.
Three-fourths of the manufacturers surveyed will augment their production facility network through contract manufacturing in the coming year.
Four out of 10 manufacturers have relocated production facilities to support entry into new markets and reduce operating costs.
Eighty-three percent agreed that a robust talent strategy enables them to hire, develop and retain the skills they need to compete effectively.
Manufacturers will make capital investments in new plants, manufacturing equipment and advanced IT platforms.
Who are the manufacturing leaders?
Nearly 9 percent of the executives—a group we call the manufacturing leaders—increased their production levels, profitability and labor efficiency by more than 10 percent since 2011. They have made their operating models, production networks and talent base more responsive and agile to address ongoing market changes.
Oil and gas, and EHT companies have been the strongest performers in the past few years while CNR companies and consumer goods firms are consistently among the bottom when it comes to operating models and production facility networks.
We believe that operational flexibility can help the manufacturing sector strengthen growth, post higher margins, increase production and improve workforce efficiency. For example, by dynamically shifting production within or across the facility network according to demand, manufacturers can be better positioned to capitalize on new opportunities.
People remain crucial to attain a competitive advantage. While it’s tempting to go on a hiring freeze during uncertain times, manufacturing companies must maintain their focus on attracting and cultivating the right skills in order to stay ahead of the competition.
Manufacturers should also actively consider ways of improving the reliability and productivity of their existing assets to boost capacity, and focus on making their IT platforms more robust. For example, tools like operations analytics can help extend the life of facilities and equipment, and make them more responsive to business needs.
In a nutshell, manufacturers must be able to move quickly and cost-effectively to capture new growth opportunities in this unpredictable, global economy.
November 21, 2013
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