The climate of our economy and how it impacts manufacturing is always one that piques our interest. To that end, we read KPMGs Global Manufacturing Outlook published in 2016 to see if we could get a reading on how manufacturing executives expect the year to go. Forbes, on behalf of KPMG, conducted a survey of 360 senior executives in six industries to get an overall picture of how the next two years will be approached in manufacturing. Respondents came from aerospace & defense, automotive, conglomerates, medical device, engineering & industrial products and metals industries.
Desire to Grow
According to the researchers at KPMG, manufacturers are looking to grow more than ever before. 74% of the executives surveyed said that growth is a high or extremely high priority over the next two years. Over half of them said that the strategies they use to achieve growth will be aggressive. Over one in six said that they would be very aggressive. Only 1% said that growth isn’t a priority at all.
But desire to grow and actually achieving growth are two different things. According to the published research, those surveyed said they intend to achieve growth goals by changing the range of products and services offered, expanding into new geographic territories and enter new sectors.
For those who plan to make changes to their product lines, 40% said they plan to make updates or improvements to existing products, 56% said they plan to make significant investments to launch one or more new products and 21% said they may eliminate a formerly significant product.
Some of the threats to growth expressed by respondents included: regulation, geopolitical issues and slow economic growth.
New technologies appear to be a huge factor for consideration by the majority of the executives surveyed. The vast majority are definitely investing or possibly investing in a variety of new technologies over the next two years, including: 3D printing, robotics, artificial intelligence/cognitive computing, advanced materials science and material bonding technologies.
The Supply Chain
Because manufacturers appear to be focused on growth over the next 12 to 24 months, ensuring that a strong supply chain is poised to handle that growth should be a significant priority. To that end, the Forbes survey included questions about the supply chain and addressed the worries of supply chain failures. 37% of executives surveyed said that supply chain failure is a significant risk and only 13% have complete visibility over their entire supply chain.
26% of those surveyed said they will definitely invest in IoT (Internet of Things) technologies in the coming year with 26% say they’ve already done so and 36% who say they may do so. 36% have already invested in procurement systems and 33% have already invested in SKU management.
According to KPMG report, manufacturing executives are looking forward into the future more than ever. It appears that they are relaxing a little bit about the economy and ready to invest real dollars and time into so-called “future technologies” to jump ahead of the game…or at least stay competitive.