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Manufacturers plan big boost in R&D spend globally

29-05-2014
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Almost half of the manufacturers globally plan to double their investments on research and development in the next two years, according to a new survey conducted by KPMG.

And the majority of them feel partnerships will drive innovations, the survey has found.

According to KPMG's 2014 Global Manufacturing Outlook, 88 percent of the manufacturers feel that partnerships will drive innovations, while 40 percent acknowledge limited visibility across the supply chain.

Only 12 percent of the manufacturers are "very effective" at determining product profitability.

In the report KPMG said manufacturers are entering a new era of "disruptive complexity" which is fundamentally changing the way manufacturers compete and succeed.

"Over the past few years, manufacturers have seen an explosion of new technologies and innovative developments in material science, advanced manufacturing and synergistic operating models," said Jeff Dobbs, global chair, Industrial Manufacturing and a Partner with KPMG in the US.

"With this accelerating pace of change, manufacturers the world over are now starting to take stock of the more complex world that they are operating in, and are using that insight to redefine the art of the possible," Dobbs said.

This fifth annual Global Manufacturing Outlook, Performance in the Crosshairs, was completed in early 2014 and surveyed 460 senior executives across six industrial sectors split equally among the Americas, Europe, Middle East and Africa and Asia-Pacific.

In an attempt to capitalise on this environment, manufacturers say they will dramatically increase spending in research and development, pursue new collaborative business models and integrate new technologies to analyse and stimulate profitable growth.

"In India, companies are keenly focused on collaborating with supply chain and logistics providers to improve reliability, enhance capacity and reduce costs by identifying and maximising process and business practice innovation," said Richard Rekhy, chief executive officer, KPMG in India.

On integrating the supply chain, SV Sukumar, partner and head of operation and supply chain, KPMG in India said: "In India, planning has always been the weakest link for quite some years now. Given many unpredictable factors associated, planning will have to be even more robust."

"The successful integration and hence the visibility of the entire supply chain will call for a significant change in the way organisations manage their planning and execution," Sukumar said.

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