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Studies and Associations Focus on Manufacturing Business Management
December 31, 1969 |Estimated reading time: 4 minutes
Prime Advantage released the results of its first "Group CFO Survey," representing financial executives of U.S.-based manufacturers in more than 25 industries; AMT The Association for Manufacturing Technology will pursue new leadership following the resignation of president Robert K. Simpson; and IBM's supply chain management study found that managing risk is now as important as faster, better, cheaper in regards to an effective supply chain strategy.
AMT The Association For Manufacturing Technology will seek a leader who will continue to guide AMT on its mission of serving members' needs and supporting the interests of the manufacturing technology community as a whole, said Ronald F. Schildge, AMT chairman and president of Transmares Corporation, speaking on the Simpson resignation. He noted that the choice is guided by the global economic crisis and its effect on manufacturing companies. In the interim, AMT senior staff, in cooperation with the Board of Directors, will oversee ongoing programs and day-to-day operation. The Board of Directors is initiating a search and hopes to move quickly on naming a new president. Simpson joined AMT in May 2008 and will now be pursuing other interests. www.amtonline.org.
Prime Advantage, buying consortium for midsized industrial manufacturers, released its "Group CFO Survey," revealing the top financial concerns of its member companies' CFOs in 2009. Among the top findings from this study is that the credit crunch is not yet having an adverse direct impact on these midsized U.S. manufacturers. Sixty-nine percent of respondents reported that their companies have not been directly affected by the cost or availability of credit, while 24% have been affected "somewhat" and only 7% have been affected "very much." CFOs indicated that their most pressing concern is slowing customer demand, which could be due in part to tighter credit. Ninety-three percent listed "an inability to measure customer demand" among their top three external concerns, with 76% citing this as the top concern. Credit markets and interest rates was the second most frequently listed concern, and volatility of the dollar and a new Presidential Administration and Congress tied for the third. Internal, company-specific concerns for CFOs reflect these external concerns. The ability to forecast results came in as the top concern among 45% of respondents, and was cited among the top three concerns by 72% of respondents. The cost of healthcare and supply chain risk was also cited most frequently among the top three concerns. The impact of these concerns is apparent from the 48% who predicted a decrease in earnings in 2009. Fifty-five percent of Prime Advantage CFOs are more pessimistic about the economy compared to last quarter, and 45% stated that they are more pessimistic about the financial prospects for their company compared to last quarter. Many Prime Advantage CFOs also expect far-reaching cutbacks, with 62% planning some type of workforce downsizing. Manufacturers are leveraging strategic sourcing and procurement planning to better improve pricing flexibility. Forty-five percent report that they have considered acquisitions as an alternative to boost revenues. Seven percent have considered mergers with competitors and another seven percent have considered divestitures to solve revenue issues. CFOs are expecting to see an increase in productivity (45% of respondents) and new product development budgets (31% of respondents) over 2008 levels. Forty-five percent of respondents are expecting productivity and product development budgets to at least be maintained at 2008 levels. The Prime Advantage Group CFO Survey was conducted in January using an online survey platform, querying a cross section of finance executives from its member companies consisting of industrial manufacturing firms from various sectors with annual revenues ranging between $10 million and $10 billion, of which the majority ranges between $20 million and $500 million. The survey received a 37% response rate from 80 financial executives representing U.S.-based manufacturers. www.primeadvantage.com.
IBM's Global Supply Chain study, based on face-to-face interviews with nearly 400 supply chain executives in 25 countries, reveals that 70% view overwhelming and fragmented data, as well as a lack of ability to make sense out of the information, as the most pressing concern. Fixing this "visibility" problem is low on action plans because it is costly, difficult, silos are worse than ever, and respondents say they are too busy. Just 16% indicated that they are effective at integration and visibility of information across the supply chain with external partners. The greatest opportunity for these executives are smart devices and integrated ERP systems that capture real time visibility: forecasts/orders, schedules/commitments, pipeline inventory, and shipment lifecycle status. "The Smarter Supply Chain of the Future" study was developed by IBM Global Business Services' Supply Chain Management Practice in conjunction with the IBM Institute for Business Value. The second issue for these executives is the having the visibility and flexibility to manage risk, with 60% saying risk is escalating as a concern. Thirty eight percent manage risk and supply chain performance in some manner, but with separate tools and processes. Executives cite the lack of standardized processes, insufficient data, and inadequate technologies as stumbling blocks. The most successful supply chain executives are incorporating risk management into their plans and using analytical predictive tools to mitigate risk and identify new opportunities. IBM's report calls for a future supply chain that is thoroughly instrumented, interconnected and intelligent with machine-generated data; connected among customers, suppliers, IT systems, parts, products, and other smart objects used to monitor events within the supply chain. Supply chain decisions should be automated for real-time responses to a range of external stimuli and remove latency and increase certainty about the outcomes of actions taken by business decision makers. Most supply chain executives are overseeing traditional functions like distribution and logistics (77%), demand/supply planning (72%), and sourcing and procurement (63%). Some are chief supply chain officers, orchestrating strategy in the complexities of today's global supply chains in an increasingly volatile marketplace, bringing together stakeholders (even those outside the extended supply chain, like regulators, financial organizations and governments) and facilitating joint planning and risk mitigation. ibm.com/supplychainstudy.