Deloitte report challenges manufacturers to develop new solutions to reignite growth
New York, 11 December 2012 — The Advanced Materials Systems (AMS) approach calls upon manufacturers to boldly rethink value creation and the means of achieving it, to revisit innovation, and forge new frontiers of opportunity, according to Reigniting growth: Advanced Materials Systems, a report released today from Deloitte Touche Tohmatsu Limited’s (DTTL) Global Manufacturing Industry group. Additionally, the report concludes that companies have the opportunity to develop targeted functional solutions, enabled by materials and process technologies, to create and capture value in a complex, evolving landscape.
The report analyzed the financial performance from 2003 to 2011 of over 6,000 publicly-traded companies across various manufacturing sectors. The results revealed that companies serving as systems developers and integrators of functional solutions achieved nearly one-and-a-half times greater return on net assets versus that of the companies that just provide materials. As these results showed, leading companies are being rewarded for bringing functional solutions enabled by materials technology to end markets. The report also analyzed several hundred start-up technology companies and interviewed leading venture capitalists and entrepreneurs to understand how these players are accelerating commercial development of advanced materials.
“Manufacturing companies are looking for new methods of innovation and approaches to limit cycle time for new products,” says Tim Hanley, DTTL Global Manufacturing Leader. “The AMS approach enables ‘liquid and solids’ companies to reengineer their business in a more favorable and profitable way to serve the global market as systems integrators. Many leading manufacturing companies are already benefiting from AMS by incorporating important properties into already discovered and available materials to create functional solutions that address global trends.”
Additionally, according to the report the AMS approach encourages companies to think differently about growth and challenge their current innovation and commercialization processes. “After gradual declining margins due to a slowdown in the rate of new materials inventions, consolidation, and limited advancement, AMS guides manufacturing companies to new solutions for growth and profitability,” says Duane Dickson, DTTL Global Chemicals Sector Leader. “It provides a roadmap to translate evolving market demands into future opportunities that create value.”
According to the report, AMS also calls upon manufacturers to build out and expand beyond the traditional mind-sets of product development, partnering, and business models. The report suggests that substantial market share stands to be captured across numerous segments by companies willing to transcend and venture beyond conventional paradigms.
To download the Reigniting growth: Advanced Materials Systems report, please visit www.deloitte.com/reignitinggrowth.
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DTTL Global Manufacturing Industry group
The DTTL Global Manufacturing Industry group is comprised of around 2,000 member firm partners and over 13,000 industry professionals in over 45 countries. The group’s deep industry knowledge, service line experience, and thought leadership allows them to solve complex business issues with member firm clients in every corner of the globe. Deloitte member firms attract, develop, and retain the very best professionals and instill a set of shared values centered on integrity, value to clients, and commitment to each other and strength from diversity. Deloitte member firms provide professional services to 80 percent of the manufacturing industry companies on the Fortune Global 500®. For more information about the Global Manufacturing Industry group, please visit www.deloitte.com/manufacturing.