KPMG Insight:
What factors will be critical to industrial manufacturers in achieving success and overcoming challenges over the coming year?
“Innovation and the speed at which innovative ideas are put into action are the keys to success. Manufacturers are focusing their efforts on their core competencies, both externally and internally, forming outside alliances or joint ventures with others who complement them and driving greater efficiencies from within by analyzing and transforming their supply chain and internal processes. This focus will provide the needed agility companies must have in order to compete in the new economy.”
- , KPMG Global Head of Conglomerates
“To succeed in Brazil, companies first need to understand that Brazil is no longer a low-cost manufacturer. Companies here have evolved significantly over the last decade and are now struggling with the same issues that companies in mature markets are facing, including increased demand for R&D, rising labor costs, and understanding the role of government in promoting the manufacturing sector.
To be successful, I think companies need to invest in Brazil for Brazil. There are plenty of opportunities for more integrated, global investment, but I advise companies to keep abreast of complex tax policies and to hedge for currency volatility when developing their investment strategies in order to convert these potential challenges into competitive advantages.”
- Partner in Charge, Audit, KPMG in Brazil
“While carefully managing your cash as an organization is still essential given the current economic environment, we may have reached a stage where some large manufacturers have become overly cautious and risk-averse, reluctant to spend in order to generate better shareholder returns. Many manufacturers now sit on significant amounts of cash but are almost too risk adverse to deploy it by investing in innovation and product development, strategic acquisitions or new markets. Manufacturers simply can’t afford to sit still: they need to focus on risk management rather than risk avoidance or they will be left behind by bolder competitors who aren’t afraid to invest in the future growth of their business.”
- KPMG Global Head of Engineering & Industrial Products
“The manufacturers that I would consider leading-edge, or operating at “best practice levels,” are integrating tax into their global procurement and supply chain organizations. I see a trend beginning whereby companies are including tax measurements into the internal Key Performance Indicators (KPIs) of the supply chain.”
- KPMG Head of Global Tax Efficient Supply Chain Management, KPMG in the Netherlands
“In order to succeed in high-growth markets, I believe global conglomerates need to be on the ground, developing and producing in these destinations. Customers in rapidly rising economies not only demand and expect that global players provide investment and employment opportunities locally, but that they work with them to develop products specifically targeted towards their own needs and desired price-points.”
- Partner, KPMG in Germany |