New Research Identifies Path to Transformation for Manufacturing Industry -- Oxford Economics Study Shows How Adjusting Priorities Can Enable Large Manufacturers to Increase Revenue by up to $200M, Reduce Costs by up to $100M
ANAHEIM, CA and NEEDHAM, MA, June 10, 2013 -- At PTC Live Global 2013, PTC (Nasdaq: PMTC) today released the findings of a ground-breaking study by Oxford Economics that explores the factors driving a strategic transformation in the global manufacturing industry. The research, which involved both qualitative and quantitative inputs from 300 executives from around the world, also identifies the strategies that manufacturers are adopting to transform their businesses and differentiate themselves for competitive advantage.
Global manufacturers are at an important industry inflection point, the study found. Market and technological forces are upending many time-honored assumptions within the manufacturing industry. As a result, more than two-thirds (68%) of manufacturing executives surveyed expect their firms to undergo significant business process transformation over the next three years.
"Our survey and interviews with market leaders show that manufacturing companies are transforming their businesses in many fundamental ways to respond to market shifts and technology trends," said Lou Celi, president of Oxford Economics Americas. "The priority for manufacturers today is to make better things -- creating innovative and distinct products and services that meet customer needs -- while continuing to make things better. True competitive advantage can only be achieved by tightly coupling the engineering, service planning and execution, management, and production processes through which innovation can evolve from conception to execution, and by creating a closed feedback loop to ensure continual improvement and alignment across the business."
Key Transformation Initiatives
The research found that successful transformation initiatives were grounded on three broad themes:
Rethinking strategy and planning: The importance of the decisions on how a company engineers, sources, manufactures, and services its products, and coordinates these processes eclipses operational execution as a competitive driver for most industry sectors. For example, the study found that manufacturing executives are placing an increasing importance on the coordination of strategy and planning between engineering and service divisions, growing from 54% of respondents today to 73% in three years.
Adopting the service imperative: Historically, the service dimension of manufacturing focused on repair and maintenance. Market leaders are now blending their products and service capabilities into new performance-based offerings. This will be the key to true differentiation, as well as providing a significant revenue boost and a guaranteed annuity stream. In fact, 77% of C-Level respondents indicated that they will enhance services as a key way to differentiate their products in the marketplace.
Fostering innovation everywhere: The emphasis on innovation will grow even more during the next three years with increased efforts in product strategy and engineering. Reverse innovation is a specific aspect that is growing more popular, as firms design products for emerging markets and bring them to developed ones (35% of surveyed manufacturers practice this today, vs. 50% in three years). (continued...)