Achieving competitive advantage in a changing global marketplace. PTC partnered with Oxford Economics to validate a hypothesis on manufacturing transformation. Together, we analyzed the market shifts that are driving transformation, measured the impact of prioritizing different business areas, and identified how firms will create competitive advantage in the future. An overview of the top-level findings from our study is summarized in this eBook. Download the full report, Manufacturing Transformation: Achieving competitive advantage in a changing global marketplace, for the complete findings and analysis, including case studies of leading firms and the results of our economic model.

1. Manufacturing Transformation Overview
Manufacturing
Transformation
Achieving competitive advantage in a changing global marketplace
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2. Manufacturing Transformation Overview
PTC partnered with Oxford Economics to validate
a hypothesis on manufacturing transformation.
Together, we analyzed the market shifts that are
driving transformation, measured the impact of
prioritizing different business areas, and identified how firms will create competitive advantage
in the future.
Oxford Economics
Oxford Economics was founded in 1981 as a joint venture with Oxford
University. Since then, they have become one of the world’s foremost
independent global research firms.
Headquartered in Oxford, England, with offices throughout the world,
Oxford Economic employs more than 80 professional macroeconomic
and industry economists—one of the largest teams of economists in
the private sector.
Get more information at oxfordeconomics.com
An overview of the top-level findings from our
study is summarized in this eBook. Download the
full report, Manufacturing Transformation: Achieving competitive advantage in a changing global
marketplace, for the complete findings and analysis, including case studies of leading firms and the
results of our economic model.
PTC
PTC’s technology solutions help customers transform the way they
create and service products across the entire product lifecycle – from
conception and design to sourcing and service – to create sustained
competitive advantage.
Founded in 1985, PTC employs approximately 6,000 professionals,
including 1,300 dedicated service professionals, serving more than
27,000 businesses in rapidly-evolving, globally distributed manufacturing industries worldwide.
Get more information at PTC.com
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3. Manufacturing Transformation Overview
Survey Profile
In addition to the survey, we interviewed leading manufacturing executives
and used the survey data to develop an economic model that quantified the
business results manufacturers generated.
Oxford Economics conducted a global online survey of 300 manufacturing
executives across industries, business functions and company size to create
a comprehensive view of the manufacturing landscape.
The complete findings can be found in the report, Manufacturing Transformation, click here to download.
The profile of those respondents depicts a balanced cross section of industries, broad global coverage including Europe and Asia, and a split between
C-level executives and their direct reports across business functions. Half
of all respondent’s firms generate greater than $1.25bn in revenue.
What is your firm’s industry segment?
Medical Devices
China
Japan
Germany
16%
17
United States
Aerospace and Defense
17% 16%
%
Industrial
Equipment
In which country is your company headquartered?
South Korea
Automotive
Taiwan
France
17%
17%
Electronics / HighTech
Denmark
Norway
Sweden
Consumer / Retail / Apparel
Finland
0
10%
Which best describes your business function?
What best describes your role?
59%
15%
20%
21%
Product / Engineering
Service
Large: $1.26b – $5b
Operations
Finance
5%
0
2
35%
25%
29%
25%
Small: $250m – $750m
Strategy
I report to
a C-level
executive
1
30%
Annual Revenue
IT
I am a
C-level
executive
25%
Very large: over $5b
Supply Chain / Manufacturing
41%
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5%
3
4
5
6
7
10
15
%
20
%
8
9
Medium: $175m – $1.25b
25
%
%
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4. Manufacturing Transformation Overview
External market shifts
Top 3 external market shifts
66%
Economic realignment (slump in world
trade, rise of emerging markets and
recessionary pressures)
Technology (Internet of Things,
Big Data, cloud, mobility and social)
External market shifts are reshaping the global landscape for manufacturing
firms, ushering in a new era of competitiveness.
When asked “Which market trends do you expect to have the greatest impact
on your firm over the next three years?” manufacturers identified the top 3
shifts as follows:
• Economic realignment: Slump in world trade, rise of emerging markets
and recessionary pressures are top of mind for manufacturers.
61%
• Technology: Innovations like the Internet of Things, Big Data, mobility,
social, and cloud—will have the second greatest impact.
• Supplier and partner complexity: The increasing quantity and intricacies of
supplier and partner relationships ranked third for manufacturing firms.
More complex, deeper relationships
with suppliers and partners
0%
10%
20%
30%
40%
60
%
50%
For the complete list of external market shifts impacting manufacturers
along with some significant regional, industry and business function.
differences, download the full report.
60%
70%
80%
90% 100%
The top 3 external market shifts that manufacturers expect will have the greatest impact on their
firms over the next three years.
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5. Manufacturing Transformation Overview
The need to transform
As a result of these consumer, market and technology shifts, 68% of manufacturers agree or strongly agree that their firm will be undergoing significant business process transformation to prepare for future market demands
in the next 3 years.
Manufacturing firms will take a variety of approaches to transform their
businesses, and adopt multiple strategies in response to market shifts.
68
%
68% of manufacturers agree or strongly agree that their firm will undergo significant business
process transformation to prepare for future market demands in the next 3 years
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6. Manufacturing Transformation Overview
Strategies to drive revenue and profitability
Top 3 strategies
When asked “Which strategies do you expect to use to drive revenue and
profitability in three years?” manufacturers identified the following as their
top 3 strategies:
100%
90%
• Voice of the customer initiatives
• Performance-based service contracts
80%
• Ability to design, build, and service anywhere.
70
%
Voice of the
customer initatives
60%
40
Performance -based
service contracts
68
%
50%
%
For the complete list of the strategies manufacturers will use to drive
revenue and profitability along with some significant regional, industry
and business function differences, download the report.
Design, build, and
service anywhere
65%
Successful transformation initiatives
Beyond discrete strategies, fresh thinking is needed to respond to global
shifts and affect transformative change. We uncovered that successful
transformation initiatives were grounded by three broad themes: rethinking
strategy and planning, the service imperative and innovation everywhere.
58%
30%
20%
10%
0%
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7. Manufacturing Transformation Overview
Rethinking strategy and planning
Strategy and planning will eclipse pure operational excellence as the source
of competitive differentiation. In order to become market leaders, firms will
strive to improve their capabilities to coordinate strategy and planning by a
number of methods.
For example, in three years, global product development will almost double as a method for coordinating strategy and planning. Likewise, systems
engineering will jump 59%, global portfolio management 50%, and global
product platform 49%.
For the complete list of the methods manufacturers will use to coordinate
strategy and planning along with some significant regional, industry and
business function differences, download the report.
Growth in methods to coordinate strategy and planning over the next three years
Global product development
Systems engineering
Global portfolio management
Global product platform
0
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20%
1
2
3
4
59%
50%
49%
40%
5
6
7
8
96%
60%
9
10
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80%
100%
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8. Manufacturing Transformation Overview
The service imperative
Fresh new thinking around service means a lot more than fixing and maintaining products. The service imperative is a transformation that involves
the rise of service as a strategic priority, creating new business models and
driving revenue and profitability.
When asked if their firm is enhancing services as a key way to differentiate their products, almost two thirds (64%) of manufacturers agreed today.
While significant regional differences exist, by 2015, 71% of all manufacturers will use service as a key way to differentiate their products.
So which service strategies are firms using now and plan to continue to use
to drive revenue and profitability? Download the complete report.
100%
90%
80%
70%
71
%
60%
64
50%
%
40
%
30%
3 years
from now
Today
20%
10%
0%
By 2015, 71% of all manufacturers will use service as a key way to differentiate their products.
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9. Manufacturing Transformation Overview
Growth of smart products enable innovation everywhere
Innovation everywhere
100%
Innovation involves more than just new products and services, although
those things remain essential. Undergoing significant business process
transformation to prepare for future market demands requires expanding
innovation beyond traditional product R&D to encompass all parts of the
enterprise ecosystem.
90%
Strategies driven by “smart products” are one area that is growing more
popular, as software-enabled and connected products see a 38% growth
over three years, to 53%.
80%
70%
Manufacturers are approaching innovation with a range of techniques, business models and strategies to drive transformation. For the complete list,
download the report.
60%
53
%
50%
40%
38
30%
%
20%
10%
0%
Smart Products
Software-enabled and connected products see a 38% growth over three years, to 53%.
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10. Manufacturing Transformation Overview
Optimization of manufacturing operations becomes routine
Over half (52%) of survey respondents report that they have wrung out
almost all savings in their manufacturing operations today. While this figure
indicates there is still work to be done, 65% of surveyed executives believe
that optimizing operations has become the industry’s price of entry rather
than a source of differentiation. That number rises to 71% in three years.
One reason for increased emphasis on strategy and planning, service and
innovation is that traditional means of creating advantage are running out
of steam. However, manufacturers can’t execute on transformation without
continuing to improve manufacturing operation prowess.
Optimization and cost reduction trends
Some opportunity for cost savings from optimizing manufacturing operations still exists
52%
65%
Optimizing manufacturing operations has become the price of entry.
65%
71%
0%
10%
20%
Today
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30%
40%
3
4
60%
70%
80%
90%
100%
% of respondents
3 Years
2
50%
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11. Manufacturing Transformation Overview
Well-executed transformation efforts produce measurable business results,
including quantifiable return on investment. The economic impact of business transformation however, varies according to the areas prioritized.
© 2013, PTC Inc. (PTC). All rights reserved. Information described herein is furnished for informational use only, is subject
to change without notice, and should not be taken as a guarantee, commitment, condition or offer by PTC. PTC, the PTC logo,
Windchill, and all other PTC product names and logos are trademarks or registered trademarks of PTC and/or its subsidiaries in the United States and other countries. All other product or company names are property of their respective owners.
The timing of any product release, including any features or functionality, is subject to change at PTC’s discretion.
To see the results of our economic model along with a list of activities that
manufacturers identified as creating the most value for firms today and in
three years, download the report.
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