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Research Shows Manufacturers Path to New Revenue
Research Shows Manufacturers Path to New Revenue
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Based upon the research, Oxford Economics concludes that well-executed transformation efforts can produce significant business results. To quantify those results for manufacturers, the report includes a business-impact model that estimates how changing transformation priorities-rethinking strategy and planning, greater emphasis on service, and innovating everywhere, including in the area of manufacturing operations-might affect revenue and costs. The model assumes a "prioritization curve" that tracks the emphasis placed on each of these three transformation activities and estimates financial results. For example, a manufacturing firm with $5 billion in annual revenue and a 20% profit margin could increase revenue by as much as $195 million and reduce costs by $96 million by increasing its prioritization of strategy and planning activities from moderate to high.

"The Oxford Economics study provides valuable insights into how the manufacturing industry is responding to the need for new sources of competitive advantage," said James E. Heppelmann, President and CEO, PTC. "This research is consistent with PTC's mission of helping manufacturing companies prioritize their strategy, planning and service activities. By delivering technology solutions that transform the way that products are created and serviced, we enable customers to transform their businesses to achieve ongoing product and service advantage."

According to the study, manufacturers will choose a variety of approaches to transform their businesses, and may adopt multiple strategies in response to market shifts. Among the more compelling findings are that:

The concept of 'design anywhere, build anywhere, service anywhere' will grow 125% in three years.

Products get smarter. Smart products, which consist of mechanical components, electronics, and software, will see a 38% growth on the world's stage.

New service business models come of age. By 2015, the use of performance-based service contracts will be used by 65% of manufacturing. Additionally, in the next two years, 56% of firms will embrace remote diagnostics.

3D printing and additive manufacturing will grow 123% in use.

The supply chain becomes a key strategic asset. The number of manufacturers increasingly leveraging their supply chains will nearly double to 57% in three years.

About the Survey

PTC commissioned the global survey of 300 manufacturing executives across such geographies as USA, China, Japan, and Germany, which was conducted during the first quarter of 2013. Survey participants represented six primary market sectors: Aerospace and Defense, Automotive, Consumer/Retail/Apparel, Electronics/High Tech, Industrial Equipment, and Medical Devices. Half of all respondent's firms generate greater than $1.25B in revenue annually. Quantitative research was supplemented with in-depth interviews with leading manufacturers, including John Deere, Santa Cruz Bicycles, Ingersoll Rand, and Emerson. (continued...)

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