March 2, 2005 - Jobwerx News - This new study provides
key insights and best practices that can enable manufacturers to achieve
optimal performance as they enter new markets, build new factories,
add new suppliers, and launch new products.
Continuous global optimization should be the goal to building competitive
advantage and reap the rewards of higher growth, profitability, and
improved shareholder value.
Deloitte Research's latest report in its Global Benchmark Study series
shows that most companies are struggling to get full value out of their
global investments. Based on in-depth analysis of nearly 800 companies
worldwide across multiple industries - aerospace and defense, automotive,
industrial and consumer products, life sciences, process, paper, chemicals,
high technology and telecommunications equipment - Deloitte Research
found that most global manufacturers focus on fixing individual pieces
of their global networks rather than taking a more holistic approach.
By contrast, those few companies that have continually optimized their
existing and new investments within the global supply chain structure
are as much as 70 percent more profitable than their peers.
Building a Platform for Continuous Optimization
To unlock the value of their global investments, leading manufacturers
are building a platform for what Deloitte calls "continuous optimization,"
including both competitive and compliance drivers.
Competitive drivers.
Global manufacturers are undertaking major initiatives in marketing,
sales, customer service, sourcing, manufacturing, logistics and product
development all key targets for optimization efforts.
Among North American manufacturers, more than 50 percent plan to
enter or expand their sourcing and sales operations in China, and
more than 40 percent plan to expand their sales efforts in Central
and Eastern Europe.
Among Western European manufacturers, more than 50 percent plan
to enter or expand sales in Central and Eastern Europe, and more than
40 percent will increase sourcing and sales activities in China over
the next three years.
Innovation new product introductions will increase dramatically
to reach 35 percent of total sales in 2007, up 66 percent from 1998.
Compliance drivers. Often overlooked, these drivers, including external
factors such as regulatory issues, tax issues and intellectual property
protection, are vital considerations when designing a global value
chain. These drivers can have a significant impact on the efficiency
and effectiveness of the value chain. In one example, a company outsourced
its global manufacturing operations to reduce cost but ended up with
a higher cost structure because of the impact of regulations and duties
on the total landed cost in key markets. With a holistic view, taking
tax into consideration when optimizing a global supply chain, the
bottom-line profit improvement is nearly 100 percent higher than if
tax considerations are excluded.
Three key enablers to achieving and maintaining comprehensive,
global network optimization include:
Visibility: Access to critical information regarding product, customer
service and manufacturing costs, customer and product profitability,
and other vital signs. Fewer than 12 percent of companies researched
were highly satisfied with the visibility into critical measures of
performance, such as product profitability (9 percent), manufacturing
cost (12 percent), distribution and logistics cost (6 percent), and
customer profitability (4 percent) all key metrics in optimizing the
global network;
Technology: An integrated and flexible technology infrastructure
allows companies to gain visibility and dynamically support changes
in the network structure; and,
Top Management Support: Because successful optimization involves
not only operational units, such as manufacturing, sales, and product
development, but also tax, human resources, and legal departments
across multiple countries, it is crucial that the CEO and the top
executive team take the lead. Not surprisingly, the vast majority
of those manufacturers that are successfully optimizing their networks
in a holistic fashion have one executive in charge of the overall
supply chain. Optimization of the global network can no longer be
done every few years. Rather, continuous global optimization should
be the goal to building competitive advantage and reap the rewards
of higher growth, profitability, and improved shareholder value.
Thanks to Sopheon and Peter Koudal, Director of Deloitte Research for
content. See other reports related to the Global Benchmark Study at Deloitte
Research.
Haven't found what you're looking for? Try 'Search' powered by
:
Sopheon, Deloitte Research -
Continuous Optimization, Global Manufacturers,
Benchmark Study, global optimization,competitive advantage,launch new
products,build new factories,global investments,industries,aerospace &
defense, automotive, industrial & consumer products, life sciences,
process, paper, chemicals, high technology & telecommunications equipment,competitive
drivers, compliance drivers, North American manufacturers, Western European
manufacturers, sales operations, manufacturing costs, Technology
:
Sopheon, Deloitte Research - 
