Cost management and operational efficiency initiatives are key things to keep in mind for global manufacturing executives, but according to a recent survey by KPMG International, they are also looking to invest in innovation and value-added services to drive company growth.
KPMG's "2012 Global Manufacturing Outlook: Fostering Growth Through Innovation" survey, polled 241 senior global manufacturing executives, 50 of which are from the United States and found that 75 percent of respondents were optimistic about their business outlook for the next 12 to 24 months. According to 40 percent of those surveyed, the U.S. is expected to lead the way, followed by China, India, Brazil and Germany.
Jeff Dobbs, KPMG's global head of Diversified Industrials and a partner in the U.S. firm said that manufacturers are challenged with continued price volatility on cost inputs, risk in the supply chain and uncertain demand. To balance that, companies need to find ways to optimize business operations and be cost efficient.
A stronger focus on innovation, paired with dramatic technological advances, is having a significant impact on manufacturing business models, which are becoming more service-oriented. The rise in such services is expected to boost profits, and nearly two-thirds of respondents predicted new or enhanced customer services will make a significant or very significant contribution to profits in the next 12 to 24 months.
"In an attempt to buffer down-cycles, manufacturers are expanding their product offerings to include value-added services," Dobbs said. "While this may potentially add to their profit margins, it should also help them strengthen customer relationships and identify future sales opportunities."
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