Global Survey into Future of Discrete Manufacturing launched by Infor

Customer Fulfillment and Operational Excellence Emerge as Top Business Initiatives to Beat Complexity and Drive Profitability.

The first findings of a white paper incorporating one of the largest global surveys focused entirely on discrete manufacturers, authored by IDC Manufacturing Insights and sponsored by Infor and IBM, has been published today. Increasing complexity is cited as one of the key challenges faced by the 722 senior executives across automotive, metal fabrication, industrial machinery & equipment, and high-tech electronics industries, with 52.8% declaring their operations to be more or significantly more complex than five years ago.


IDC Manufacturing Insights' white paper, sponsored by Infor and IBM, is the largest global survey into the discrete manufacturing sector, undertaken amongst CEOs, COOs and CFOs within the UK, US, Germany, France, Benelux, Japan, China and Brazil.

Automotive and high tech experience greatest acceleration of complexity reporting 55.2% and 56.1% respectively.

Driving down costs and achieving profitability tops today's business concerns but customer fulfillment is heralded as the most important business initiative in achieving these challenges - marking a significant change from manufacturers' sole focus on cost cutting at the peak of the financial crisis in 2009.

The survey reveals significant differences in the key initiatives underway to combat the recession in different geographies. In Western Europe and the US, a conservative 'back to basics' strategy of customer retention and productivity ranks high on the agenda, contrasting with Japan and China where innovation and development of new products and services rank highest - a much more aggressive, expansionist strategy.

Overall consensus on cost concerns exists across all four industries, however raw material costs are a much greater concern for the metal fabrication industry who are most exposed to the volatile and fluctuating costs of steel or rubber. Conversely achieving revenue targets is more important for consumer-orientated industries, high-tech electronics and automotive.

Better demand planning and forecasting presents the biggest gap in improving operational excellence when respondents were asked to rank current performance against desired performance over the next two years.

Overall a lack of skills, business agility and access to accurate and timely information pose greatest barriers to achieving operational excellence. But again, these concerns vary markedly amongst countries, as reflected in Germany (difficulty in collaborating with suppliers), France (lack of funds and inability to predict customer demand) and China (concern over ineffective/inadequate IT systems).

Almost half (44.6%) of respondents recognise technology as a vital component in their pursuit of operational excellence, with improved decision making, profitability and cost reduction cited as the areas enterprise resource planning (ERP) can add the most value.

However, the priorities of IT software investments beyond core ERP systems show a marked difference between the CEO and CIO, exposing potential mis-alignment in developing a corporate IT strategy. Uniformly, manufacturing leaders cite "improved decision making" as the #1 benefit received from their ERP investment.

What IDC Manufacturing Insights Says

"Increased competition, globalisation, product proliferation and elongated supply chains have conspired to create escalating complexity for manufacturers," comments Pierfrancesco Manenti, EMEA research director, IDC Manufacturing Insights. "Fuelled by the global financial crisis, the discrete manufacturing sector has faced unprecedented change in the last 18 months. As we begin to turn a corner, we are seeing a significant shift in emphasis towards customer fulfillment as an equal priority to cost cutting, as manufacturers seek to capitalise on the relationship between customer retention and profitability."

What We Say

"In order to thrive post-recession and achieve long term business growth, investment in customer retention is imperative," comments Andrew Kinder, director of solutions marketing, Infor. "However manufacturers need to overcome the barriers created through increasing complexity to become more agile, and ensure they have accurate real-time information at hand to deliver on customer-led strategies. As the study highlights, improved IT infrastructure is a key component in facilitating better decision-making, profitability, customer fulfillment and efficiency of manufacturing operations. The next few years will inevitably bring new challenges in the quest to enhance customer fulfillment, but without the right tools to manage customer relationships, these challenges will prove even tougher to overcome."