OREANDA-NEWS. Forty-four percent of KPMG GMO survey respondents say they will allocate more than 20 percent of their total technology spend on systems to improve the pace and value of innovation (engineering, manufacturing and supply chain) in the next year. Furthermore, 32 percent cite the development of new products and R&D as a top strategic priority.

“Innovation waits for no one. Those who fail to embrace the new reality of the accelerating innovation cycle will quickly be left behind,” says Jeff Dobbs, KPMG’s Global Head of Industrial Manufacturing. “Investing more in R&D is certainly helpful, but manufacturers need to also focus on continuously enhancing and adapting their innovation models if they hope to survive.”

In order to improve speed-to-market and lower innovation costs, the KPMG GMO survey found that manufacturers are increasingly looking to, and collaborating with, suppliers, customers and third party research organizations. Indeed, 81 percent of respondents are adopting more collaborative business models with suppliers and customers to improve the value of their innovation investments.

Dobbs comments, “The focus on new product development, collaborative innovation and speed-to-market all require new strategies and business models. If manufacturers hope to grow by driving new innovations to market, they need to focus on improving the agility and integration of their supply chain models."

Looking into supply chains, almost half of all KPMG GMO survey respondents cite lowering costs and working capital levels as one of their top three strategic supply chain priorities. And, when asked to rate their top supply chain challenges, respondents say that a lack of flexibility and responsiveness to changes in demand or product mix is the most frequent issue; this is followed by concerns relating to supplier performance (in terms of risk, reliability and quality) and ensuring sufficient supplier capacity to meet demand and best support new product launches.

"Our survey respondents report they are addressing the challenges and investing in new supply chain technologies that offer lower costs, better planning and improved enterprise collaboration," says Dobbs. "More than a third of our GMO survey respondents say they will place significant investment into improving their procurement systems and 31 percent say they will allocate significant supply chain technology spend on Integrated Business Planning (IBP) systems."

Dobbs continues, “Sensing and truly understanding unmet needs faster than the competition will be key to winning the battle as the pace of connected-product innovation continues to accelerate.”