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Mastering Complexity in Global Manufacturing

Mastering Complexity in Global Manufacturing

This Deloitte Research study, "Mastering Complexity in Global Manufacturing: Driving Profits and Growth through Value Chain Synchronization," is the second part in a series of studies around the ongoing Global Benchmark Survey. The study shows that companies seeking to exploit global market, supply chain, and engineering opportunities are hitting an invisible but nonetheless debilitating wall: mounting complexity across the value chain. And it is bound to get worse as manufacturers continue to globalize and accelerate new product introductions to spur growth. As a result, the task of coordinating product engineering, sourcing, manufacturing, logistics, and marketing and sales activities that are more and more scattered around the world and supporting an increasing number of new products is growing ever more difficult.

While most companies struggle to put together the pieces, however, a small group of manufacturers (7 percent) have excelled amid the complexity. These "complexity masters," as we call them, are being rewarded handsomely. Their superior ability to synchronize within and across their value chains -- including customer-, product-, and supply chain-related strategies and operations - and to leverage their strengths in collaboration, flexibility, visibility, and technology - is helping them generate up to 73 percent higher profits, and growth, and shareholder returns that are dramatically better than for the rest of the companies studied.

Nearly 800 companies from around the world have participated in the Global Benchmark Survey program to date. Industries represented include: aerospace and defense; automotive; life sciences; consumer products; process and chemicals; high technology and telecommunications equipment; and, metal fabrication, industrial machinery and equipment. Participating in the GBS program enable companies to benchmark their value chains against their peers and top-performing businesses around the world and help them chart a course for improving operations and driving business performance to new levels.

Three critical differentiating factors that Complexity Masters synchronize across the entire global supply chain are:

  • Customers - collaborating with customers, rather than only with suppliers. Undertaking customer profiling, customer loyalty and customer segmentation initiatives.
  • Products - increasing performance through managing products and introducing new products. Managing mass customization of parts; reducing cycle time; improving time to market.
  • Technology - implementation across customer, product and supply chain operations, including Product Lifecycle Management and Advanced Planning Systems that focus on long-term planning and forecasting, in addition to more tactical technology, including warehousing management systems and transportation management systems.
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