CSCMP's Supply Chain Quarterly
October 23, 2018
Forward Thinking

Study: Global manufacturers need more flexibility

A new report from Accenture says that manufacturers worldwide plan to invest in people, processes, and technology that will allow them to change their production facilities and product mix.

A huge number of global manufacturers today cannot swiftly respond to changing market conditions, according to a recent report, Accenture 2013 Global Manufacturing Study: How Leading Manufacturers Thrive in a World of Ongoing Volatility and Uncertainty. Eighty-two percent of the 250 global manufacturers that participated in the study believe that the ability to move production from one facility to another or change product mix at a plant is critical to growing their business. Yet only 27 percent of those surveyed said they might be capable of shifting resources or activities to an alternative location.

"Manufacturers are finding that their existing operating models are not effective in this new volatile marketplace, but there is clear evidence that they are responding by making a range of investments to create more flexible and consistent operations in the future," said Russ Rasmus, global managing director of the Accenture Manufacturing practice.

To gain more "flexibility," 56 percent of survey respondents said they plan to invest in human resources this year. Another 47 percent plan to improve business processes, and 38 percent plan to invest in information technology. "Those investments are being made across operating model components, ranging from talent, business processes, policies, and capabilities, to the information technology infrastructure, organizational structure, and production facility networks to drive flexibility into their operations," Rasmus said.

The study also found that 76 percent of respondents plan to make greater use of contract manufacturing through 2014. Contract manufacturing gives companies more flexibility in their operations and helps them avoid the costs associated with building or buying new facilities or hiring personnel.

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