Manufacturing the future: The next era of global growth and innovation

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  8. Globalisation requires a new approach. Widespread globalisation is being gradually replaced with targeted international production and distribution. Companies are moving closer to their customers and establishing a presence in regions with high growth potential or influence.

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    This approach has far-reaching implications for business decision-making and management, requiring a balance between local execution and centralised control that can be difficult to achieve. Innovation and speed will be critical.

    A Report from the McKinsey Global Institute

    Experts and leading industry figures agree that both innovation and speed to market are crucial for the successful survival of the UK manufacturing industry. Portfolios and production lines will focus on profitable products. Increased production costs, changing customer needs and a stricter regulatory environment mean manufacturers will look at reducing product portfolios and producing smaller batch quantities, shifting focus to a limited number of high-value, high-functionality products — those that generate the greatest revenue for the business.

    Manufacturing the Future: James Manyika on the Next Era of Global Growth and Innovation

    Alternative revenue generating options are likely to include licensed products, contracting-out spare production capacity and partnerships, while some manufacturers will increase service offerings, including value-added services and integration options. Another prevalent trend will be the shortening of product lifecycles.

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    In the race for competitive differentiation, the time from drawing board to delivery becomes shorter and increasingly important. Adopting new technology will help manufacturers bring their products to market faster than their competitors. IT and intelligence will have an inestimable impact. Improved enterprise resource planning software, the use of radio frequency identification RFID tags and enhanced production line automation and monitoring already boost efficiency and operations and will continue to have a significant impact on the manufacturing industry.

    The emergence of deep and intelligent connectivity between devices and systems will introduce a raft of operational and customer benefits and a leaner, more responsive approach to manufacturing.


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