Global Manufacturing Prospects: U.S. Perspective

KPMG’s new Global Manufacturing Prospects report makes it clear that the pandemic, climate change and geopolitics continue to drive industrial manufacturing executives’ decisions. While countries and companies have responded with different approaches to some of today’s most pressing problems, U.S. manufacturers are focused on four interconnected priorities: strengthening their supply chains, investing in digitization, furthering ESG goals and creating long-term value for shareholders and employees.

The study, which includes opinions and feedback from manufacturing leaders across Europe, North America Asia-Pacific, offers insights that manufacturing professionals can benchmark against and learn from.

A few key takeaways from the study:

Managing Supply Chain

Predictably, supply chain risk was listed as the greatest threat to an organization’s growth, with 68 percent of CEOs listing supply chain resiliency as a key priority. CEOs have learned that a resilient supply chain is vitally important, along with new technologies to strengthen that resilience.

Manufacturers are increasingly adopting AI-centered supply chain solutions. These solutions enable companies to use real-time supply and demand data and help develop risk management for any vulnerable points identified in their supply chains.

Growth through Digitization

From supply chain logjams to labor shortages, the need to leverage new technologies across the value chain has never been more necessary to support growth. CEOs report that investing in digitization and connectivity of all functional areas is their main operational priority to achieve growth objectives over the next three years. Both the COVID-19 pandemic and climate change have placed new focus and prioritization on digital transformation as companies search for tools to mitigate risks and maximize new opportunities.

ESG

Environmental, Social, and Governance matters, particularly climate change, are in the spotlight. Almost half of respondents said they are under pressure from stakeholders, especially investors, to increase the transparency of their ESG efforts — five times the number who say the opposite. Of ESG issues, manufacturing CEOs may seem to be focused primarily on social and environmental issues; 71 percent of respondents see global challenges such as income equality and climate change as the biggest threats to long-term growth.

Going Long, Purpose-led

Two-thirds of respondents confirmed their organizational priority is creating long-term value for shareholders, almost five times more than the number focused on economic returns.?Furthermore, the pandemic encouraged CEOs to ponder deeper questions: 77 percent say they feel a stronger emotional connection to the purpose of their company since the pandemic began, and 92 percent say that conveying a sense of purpose will have the greatest impact on their customer relationships.

As manufacturing leaders consider the health of their business, the opportunity is clear. Digital transformation and a strong ESG proposition are vital to creating a resilient supply chain. These factors will lead to long-term shareholder value built on a sense of purpose. Business leaders who emphasize the strategic importance of this combination are likely to see ongoing success.?