2023全球制造业展望调查报告 Global Manufacturing Prospects 2023 -kpmg

Global

ManufacturingProspects2023

TheCEOview:Sustaininggrowth

amidturbulence

KPMGInternational

/industrialmanufacturing

Foreword

StéphaneSouchet

GlobalHeadofIndustrial

Manufacturing

KPMGInternational

GrantMcDonald

GlobalIndustryLeader,

AerospaceandDefence

KPMGInternational

Inthepreparationofthisreport,KPMGInternationalpolled182chiefexecutiveofficers(CEOs)oflargemanufacturersfortheirviewson

thekeyissuesfacingtheircompanies.Respondentsarebasedin11

countriesinEurope,Asia,andNorthAmerica.ThefindingsshowthatCEOs’perspectivesareshifting.Theyareasconfidentaboutprofitablegrowthinthenextthreeyearsastheywereintheprevioussurvey,butmostexpecttofaceaheadwindin2023.

Aslowdownwouldimpactprofitsandsales

expansion,sohowwillCEOsreactintheshorttermtomaintainbusinessmomentum?Indeed,theywillhavetogrowfaster,cometherebound,tostayontrackwiththeirprofitprojections.

Achievingtheseobjectiveswilllikelybeadifficultbalancingact,betweentheshortandlongterm;investmentsintechnologyandpeople;onshoring

andoffshoring.ForCEOsnavigatingthesedifficult

waters,thisreportaimstoprovidekeyinsightstohelpmanagethejourney.Itcanhelpcompaniesbenchmarkthemselvesagainsttheirpeersandoffersomesoundadviceonwhatmapstotakealongwiththem.

Thefutureisunpredictable,sopreparecarefullyandassesstherisksandopportunitiesfromanenterprise-wideperspective.

Unlessotherwiseindicated,throughoutthisreport,“we”,“KPMG”,“us”and“our”refertothenetworkofindependentmemberfirms

operatingundertheKPMGnameandaffiliatedwithKPMGInternationalortooneormoreofthesefirmsortoKPMGInternational.KPMG

Internationalprovidesnoclientservices.NomemberfirmhasanyauthoritytoobligateorbindKPMGInternationaloranyothermemberfirm

vis-à-visthirdparties,nordoesKPMGInternationalhaveanysuchauthoritytoobligateorbindanymemberfirm.

2GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

15Conclusion

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

Changingglobalsupplychains

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

Contents

4

Strongoptimism

despiteheadwinds

6

Changingglobal

supplychains

8

Buildingblocks

oftransformation

9ZeroinginonESGgoals

11

Risingvalueofskills

13

Digitalandpeople

3GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

Changingglobalsupplychains

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

Strongoptimism

despiteheadwinds

Theglobaleconomyisslowingdownandtherearenumerouschallengesfacingmanufacturers,butCEOsremainconfidentoftheircompanies’growthprospectsoverthenextthreeyears.

Thislevelofconfidencehashardlychangedoverthepast12months.Theyarealsooptimistic

aboutthegrowthoftheirindustrybetweennowand2025,muchmoresothaninpreviouspolls.

Theyare,however,lessconfidentabouttheworldeconomy’sshort-termgrowthprospects,asgovernmentstacklerisinginflationbydampeningdemand.

Despitetheoptimismaboutthelongerterm,morethanthreequartersadmitthatincaseofaneconomicdownturn,thismayaffecttheircompanies’three-yeargrowthprospects.

Intermsofgrowthprospects,pleaseindicateyourlevelof

confidenceinthefollowingoverthenext3years

100%90%80%70%60%50%40%30%20%10%0%

64%

53%

48%

26%

17%

4%

20%

52%

27%

19%

14%

31%

12%

3%

3%

5%

Growthprospectsforyourcountry

Growthprospectsfortheglobaleconomy

Growthprospectsforyourindustry

Growthprospectsforyourcompany

VeryconfidentConfidentNeutralNotveryconfident

Source:2022GlobalCEOOutlook,KPMGInternational

4GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

Changingglobalsupplychains

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

“Inthefaceofmountinguncertainties,itis

advisabletoperformrollingscenarioanalysis

andplanvariousresponses,dependingon

possiblepathsforthebusinesscycle,”says

StéphaneSouchet,GlobalHeadofIndustrial

ManufacturingatKPMG.“Themacro-economicoutlookhasbrightenedsomewhatrecently,andCEOsshouldprepareforareboundatsome

point.Ifinflationcomesundergreatercentralbankcontrolin2023,theremightbemore

positivemomentumandcompaniesshouldbereadytotakeadvantageofarecovery.”

Tostrengthentheirorganizationsinthefaceofaslowdown,CEOsareplanningforthe

possibilityofaneconomicdownturn,which

canmeanmakingdifficultdecisions.86

percentareplanningtofocusonboosting

productivity,orhavealreadydoneso.However,theyareconfidenttheircompanieswillremainresilientoverthenextsixmonths.

Somesectorscanexpecttoremainbuoyantasaresultofothergeopoliticalfactors.“Amidallthediscussionofaneconomicdownturn,Aerospace&Defense(A&D)is,tosomeextent,working

inacounter-cyclicaldirection,”saysGrant

McDonald,GlobalSectorLeader,Aerospace

andDefense,atKPMG.“Thatis,thereboundinpassengertravelhasacceleratedaircraftorders,andthecontinuinggeopoliticalconflictshaveledtoincreasedspendingondefenceequipment.”

Aerospace&defenceisasectorknownfor

innovation.Dependingonthedigitalmaturity,

productivityimprovementscanbeachieved

throughadditionalinvestmentinautomation

thatwillenhanceefficiencyandeffectiveness.

GrantMcDonald

GlobalIndustryLeader,Aerospace&Defence

KPMGInternational

5GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Strongoptimismdespiteheadwinds

Changingglobal

supplychains

Buildingblocksoftransformation

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

Changingglobalsupplychains

Theeconomicpictureremainsverycloudy,

notonlybecauseofgovernmentmeasures

todampeninflation,butalsobecauseof

heightenedgeopoliticalrisksaroundtheworld.Divisionsweregrowingbeforethewarin

UkrainebrokeoutinFebruary,butsincethen,newglobaltensionshavecausedcompaniestorethinktheirinternationalstrategies.88

percenthavediscontinuedoperationsin

RussiainresponsetothewarinUkraine.Butglobalizationisnotnecessarilyretreating;itismorelikelytobechangingshape.

“Manufacturingindustriesareglobal,which

meansthatonshoring,nearshoring,and

offshoringnevergoaway.Thepictureismixedfromregiontoregion,andyouhavetoexamineglobaltrendsintheirentirety.CompaniesmayuseM&A(MergersandAcquisitions)asatooltogainmorecontrolofsupplychains,andif

theycanonshorepartsoftheiroperations,

theywill,”saysGrantMcDonald.“Thisconceptofstrategicpartnershipsandalliancesisalsocrucialtohelpbuildbusinessrelationshipsandtomanagecomplexsupplychains.”

Whatstepshaveyoualreadytaken,andwhichdoyouplantotakeinthenext

6months,toadjustyourstrategyinresponsetogeopoliticalchallenges?

Pausedigitaltran

sformationstrateg

y

39

%

4

3%

18%

Discontinuework

ingrelationshipw

ithRussia

45%

43%

12%

Transferoverseas

operationslocally

/inhouse

40

%

44%

16%

Diversifyoursup

plychain

32%

5

4%

14%

Reconsiderinves

tmentstrategies

40%

4

2%

18%

Adjustriskmanag

ementprocedure

sinlightofgeopo

liticalrisk

37

%

32%

31%

HavetakenPlantotakeinthenext6monthsNoactionplanned

Source:2022GlobalCEOOutlook,KPMGInternational

6GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Strongoptimismdespiteheadwinds

Changingglobal

supplychains

Buildingblocksoftransformation

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

Supplychainshavebeenlikearollercoasterfor

manufacturers,which

havefacedsomevery

tightbottlenecks,butit’susefultonotethatsometrendsarereversing.

StéphaneSouchet

GlobalHeadofIndustrialManufacturing

KPMGInternational

84percentofCEOsarenearshoringoronshoring

operationsorbringingthemin-house,andeven

morearediversifyingtheirsupplychaintomitigatevulnerabilitiesthatemergedthroughthepandemic.Thelogicofinvestingclosetomajormarketsisstillstrong,butgeopoliticaluncertaintyisraisingthe

possibilityofadividedglobaleconomy.

“Supplychainshavebeenlikearollercoasterfor

manufacturers,whichhavefacedsomeverytight

bottlenecks,butit’susefultonotethatsometrendsarereversing,”saysStéphaneSouchet.Forexample,thereisincreasedshippingcapacityonsometraderoutes.

Marketforcesareworkingtoloosenthingsup.

7GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

%

35%

51%

1

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

Changingglobalsupplychains

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

Buildingblocksoftransformation

Companiesareaimingtogrowfasterbybothorganicandinorganicmeans.CEOssaythetopprioritiesforachievinggrowthobjectivesarestrategicalliancesandorganicgrowth.

Mergers&Acquisitions(M&A)areaslightly

lowerpriority,butmorethanhalfofchief

executiveshaveahealthyappetiteforM&Athatwillhaveasignificanteffectontheircompanies.

Overthenext3years,howwouldyoudescribeyourorganization'sM&Aappetite?

13%

ModerateM&A

appetite-Wewillmakeacquisitions,butwithmoderatetomyoverall

organization

HighM&Aappetite-Likelytoundertakeacquisitionswhich

willhaveasignificantimpacttomyoverallorganization

Weareseekingtobeacquiredourselves-

Likelywewillbethetargetofanacquisitionormerger

LowM&Aappetite-

unlikelywewillmake

anyacquisitions

Source:2022GlobalCEOOutlook,KPMGInternational

“Facedwithmarketuncertaintiesanda

softeningoffinaldemand,toplineperformance

willbemorechallenging.So,tomaintain

valuationlevelsandputcapitaltowork,

manufacturingCEOsarestilllookingattactical

M&Atosupporttoplinegrowth,aswellasfilling

gapsintheirproductportfolio,whilstcontinuing

theoptimizationoftheirbusinessportfolio.

Forexample,thesaleofnon-coreassetsto

privateequityraisesfinancingforthetactical

acquisitions,”saysStéphaneSouchet.

DespiteadeclineinM&Adealsin2022,corporate

transactions(bothdisposalsandacquisitions)

remainaveryimportantwayformanufacturers

tostrengthencoreoperationsandfindfaster

waystoexpand.Itisameansofrestructuring

andacceleratingtransformation.

“AstrongappetiteforM&Adealsdoesn’t

necessarilymeanactivityexceeds2021’selevated

level,butCEOsarealwaysinterestedinmaking

deals,”saysClaudiaSaran,NationalSectorLeader

forIndustrialManufacturing,KPMGintheUS.“The

economicenvironmentisabitlesspredictable

thanbeforebecauseofrisinginterestratesandthe

possibilityofaneconomicslowdown,butM&Ais

animportantwaytorationalizetheportfolioand

shifttowardhighergrowthopportunities.”

8GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

18%

23%

26%

33%

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

Changingglobalsupplychains

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

ZeroinginonESGgoals

Sustainabilitygoalscontinuetobeemphasizedby

CEOs,whosaythatthepredominantsourceofpressuretopromotemoretransparencyaboutcompanies'

environmental,socialandgovernance(ESG)objectivescomesfromemployeesratherthaninvestors.To

acceleratetheirESGstrategy,theywilltakeamore

proactiveapproachtosocietalissues,suchasincreasedinvestmentsinalivingwageandafocusonhumanrights.

ESGgoalsareparticularlyimportantintheA&Dsector,whichhassomeofthehighestcarbonemissions–a

significantchallengeinmeetingthenetzeroobjectives.“The

industryisfocusedonmakingadifferenceandinvestmentsarebeingmadeinareasincludingsustainablefuels,

hydrogencellsandelectrification”,saysGrantMcDonald.

“WhenitcomestoESGobjectives,weaskclientstotellustheirgoalsandpriorities.Weadvisecompaniesthatthere

areafinitesetofobjectivestheycanfocuson,soitisbesttochoosetheonesthatareimportanttothemandwhereitcandothemost,measurablegood,”saysClaudiaSaran.

Toachievethis,companiesneedtotakeanenterprise-

wideviewofESG.“Therecenteconomicdislocations

haverevealedmorethaneverthatCEOsmustthinkoftheirbusinessmodelfromaholisticpointofview.So,it’snot

possibletofocusononetopictothedetrimentofothers;

they’reconnected,”saysStéphaneSouchet.“There’salink,forexample,betweensupplychainissuesandESG,whenyouthinkofresponsiblepurchasing.Sometimesthereare

conflictingagendas,soCEOsmighthavetochangetheirprioritiesiftheywanttoachievetheirstrategicgoals.”

In3years,whatdoyoubelievewillbethekeydriver

toaccelerateyourcompany’sESGstrategy?

Takingamoreproactiveapproachtosocietalissues,suchasincreasedinvestmentinalivingwage,humanrightsandajusttransition

Implementinganetzero

strategyand/ormeasuring

andactingonyourcompany'scarbonfootprint

Increasingmeasurementand

governancetobuildamore

robustandtransparent

approachtoESG

Deliveringonanactionable

inclusion,diversityandequity

strategytoaddressequityin

leadership(e.g.payequity,

diversityinleadershipandboards)

Source:2022GlobalCEOOutlook,KPMGInternational

9GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

Changingglobalsupplychains

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

Whatdoyoubelieveisthegreatestbarriertoachievingnetzeroorsimilarclimate

ambitionsforglobalcorporations?

20%

Thecostof

decarbonization

11%

20%

Complexityofdecarbonizingsupplychains

29%

20%

Lackof

appropriate

technology

solutions

Lackofskills

andexpertise

toimplement

solutions

Lackofinternal

governance

/controlsto

operationalizeit

AnothercoreconsiderationofESGis

diversity,equity,andinclusion(DEI),

whichmustbeapriorityforcompaniescreatingarepresentativeworkforce.

Formanyenterprises,thismeans

developingtalentthatwillfillleadershipslots.FourinfiveCEOssaythat

“achievinggenderequityintheC-suite

willhelpusmeetourgrowthambitions.”Theyareawarethatscrutinyoftheir

organization’sperformanceondiversitywillcontinuetoincrease,sotheymayneedtoacceleratethetransition.Twothirdsagreethatprogressondiversityandinclusionhasbeenmuchtooslowinthebusinessworld.

“Thereisresearchshowingthat

companieswithafocusonDEIare

achievinghighershareholderreturns

andtheywillgainthegreatestbenefitbybuildingadiverseleadershipteam,”saysClaudiaSaran.“Ifyoutrulybelievethatawiderangeofviewpointswillenableyourcompanytoachievehigherreturns,thenwherebettertofocusthanatthetop,withdiversepeoplewhocanhelpmaximize

theimpactofbusinessdecisions.”

Sustainabilitycontinuestobeacritical

globalissue.ThereisgrowingevidencethatafocusonthisandwiderESG

initiativescreatesvalueforcompanies1

andESG-focusedinstitutionalinvestmentcontinuestoriserapidlyinimportance.

Conversely,afailuretomeetESGgoalsexposescompaniestofinancialrisks,

accordingtoaJune2022studybyDun&

Bradstreet2.Thereareothercosts,aswell.

CEOsthinkthatitcouldbechallengingto

recruitthebesttalentiftheydonotmeet

candidates’ESGexpectations.

Somehavearguedthatcopingwith

geopoliticaldisruptioniscausing

companiestodelaymeetingtheir

sustainabilityobjectives.ButStéphane

Souchetdoesnotbelieveit’sachoice

ofeither/or."Whenwelookatthe

geopoliticsofenergysupply,wesee

thereareincreasingeffortstoenhance

energysovereigntyandthisleads

toagreaterwillingnesstoincrease

thesupplyofrenewableenergy.

Severalcountrieshaverecently

turnedtonuclearpowerprojectsto

reconcileESGimperativeswhilstits

acceptabilityforsocietyisincreasing

inmostcountries,”hesays.

Whenitcomestomeetingnet-zero

goals,thebiggestbarrieristhe

complexityofimplementation.The

leastimportantchallengeiscost,asign

thattechnologyismakingitpossibleto

achievedecarbonizationgoalswithina

reasonabletimeframe.Windandsolar

power,forexample,areincreasingly

competitivesourcesofenergy.The

U.S.DepartmentofEnergystatesthat

thecostofsolarpowerfellbymore

than75percentbetween2010and

2021.Windturbinecostshavedropped

bymorethanhalfoverasimilarperiod.

Source:2022GlobalCEOOutlook,KPMGInternational

2“FailingtomeetESGgoalsexposescompaniestoincreasedoperationalandfinancialrisks,studyfinds,”Dun&Bradstreet,June6,2022

10GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

Changingglobalsupplychains

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

Risingvalueofskills

CEOsrecognizethatthequalityoftheirworkforceiscrucialiftheirbusinessisgoingtocontinue

toexpand.Toachievethecompany’sgrowth

targetsoverthenextthreeyears,thetoppriorityistoattractandretaintalent.Almostathird

agreeonthis,10percentmorethanthenumberemphasizingmoredigitizationandconnectivity.

Skillsshortagesareaperennialproblem,butatatimeofmarketdislocation,asnow,thereareopportunitiestofilltalentgaps.Thousandsofskilledworkersinthetechnologyindustryhave

losttheirjobsin2022,sothereisanopportunitytohirepeoplewhocanhelpwiththedigital

transformationofmanufacturing.

RecruitmentisnottheonlytoolCEOsshould

use,saysClaudiaSaran.“Companiesare

lookingmorebroadlyforsourcesoftalent,

includingwithintheirownranks,andare

findingwaystoimproveretention.Onewayistousemachinelearningtomatchtheexisting

workforcewithnewroles,retoolingemployees’skillstofitdemandsforfutureinnovation.”

Allowingemployeestoworkflexiblehoursand

todosofromhome,atleastpartofthetime,

areimportantwaystoattractskilledpeople.

Thiskindofflexibilitycanalsobenefitthe

organization.48percentsaythattheimpact

ofhybridandremoteworkoninnovationand

collaborationhasbeenneutral,butalmostas

manysayithasbeenpositive.Evenso,only

38percentthinkithashadapositiveeffecton

employeemorale,comparedwith37percent

whosayproductivityhasbenefited.

Companiesarelookingmorebroadlyforsourcesfortalent,includingwithintheirownranks,andarefindingwaystoimproveretention.Onewayisto

usemachinelearningtomatchthe

existingworkforcewithnewroles,retoolingemployees’skillsto

fitdemandsforfutureinnovation.

ClaudiaSaran

NationalSectorLead,

IndustrialManufacturing

KPMGintheUS

11GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

Changingglobalsupplychains

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

Inthepast2years,whatkindofimpacthashybrid/remote

workhadonyourorganizationinregardsto:

Hiring

4

3%

43%

14%

Employeeretention

40

%

49%

11%

Employeemorale

38

%

51%

10%

Collaborationandin

novation

45%

48%

8%

Investmentinwork

lpacetechnology

4

2%

52%

6%

Productivity

37

%

52%

11%

0%20%40%60%80%100%

PositiveNeutralNegative

Source:2022GlobalCEOOutlook,KPMGInternational

“Ononehand,collectiveintelligencecan

begainedandstimulatedthroughphysical

presence.Ontheotherhand,technologyfor

remoteworkingenablescompaniestopull

togethermoreresourcesfromaroundthe

globetoface,andthensolve,problems,”says

StéphaneSouchet.“Leveragingtalentfroma

worldwidebasecanaccelerateinnovationina

largecorporateorganization.”

Executivesarekeentoseeemployeesspend

moretimeintheoffice.Inthreeyears'time,

73percentofCEOspredicttheiremployees

willhavefullyreturnedtotheofficeandonly21

percentexpecttheywillcontinuetoworkina

hybridmanner.Itremainstobeseen,however,

whetheremployeessharethisviewandwill

complyifaskedtoreturntotheofficefulltime.

Muchwilldependonthebalanceofbargaining

powerbetweenthemanagementandworkers.

“Employersareawareofthisnewbalanceand

aredevelopingstrategiestoattractandretain

talent.Offeringemployeestheoptionofhybrid

workispartofthat,”saysClaudiaSaran.

“Instrivingtoattracttalent,employersshould

notethatflexibleworkandlocationschedules

arehighlyvaluedbyjobseekers.It’sbeen

almostthreeyearssinceworkpatternswere

disruptedbythepandemicanditmaybe

difficulttopersuadeemployeestoreturntothe

‘oldnormal’,”shesays.

12GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

Changingglobalsupplychains

ZeroinginonESGgoals

Risingvalueofskills

Digitsandpeople

Conclusion

Digitalandpeople

CEOsaredividedaboutthepositionoftheir

companiesinrelationtoindustrialtransformation.78percentsaytheyneedtobequickerto

investindigitalopportunities,but75percentsaytheyhavethestrategytosecurefirst-

moveradvantage.Manufacturershavealreadygonethroughseveralstagesoftransformationfocusingoncontinuousimprovement.

“Nowtheyarelookingforchangesinbusinessmodelsbyusingdigitaltechnologytoachievethis.Anycompanythatmovesfasterthanits

peerswillhaveanedge,sotheyfearmissing

outontheopportunitiesiftheydon’tacceleratetheirtechnologyinvestments,”saysVinod

Ramachandran,GlobalHeadofIndustry4.0,KPMGInternational.

Ifsomethingisholdingbacktransformation,twothirdssaythemainchallengeischoosingtherighttechnology.“Oneusefulwayof

approachingthisproblemistodifferentiatefoundationaltechnologies,whichareamustfordigitaltransformation,fromspecific

applicationsintegratedontop,”Vinod

Ramachandranelaborates.“Theformer

includesaverystrongERPplatform,cloud

infrastructure,datalinksandadataanalyticsplatform,allinterconnected.ThefoundationaltechnologyinvestmentsrequirealongerROI."

Towhatextentdoyouagreewiththefollowingstatements

aboutyourdigitaltransformationstrategy?

Wehaveanaggressfast-followerstatus

ivedigitalinvestment

strategy,intendedt

osecurefirst-mover

or

23%

52%

15%10%

Weneedtobequickfacedigitalobsolesc

ertoshiftinvestmenence

ttodigitalopportunit

iesanddivestintho

seareaswherewe

29%

49%

14%8%

Weneedtoaddresscontinuingonourtra

burnoutfromaccelensformationjourney

rateddigitaltransfor

mationoverthepast

2yearsbefore

25%

45%

19

%12%

Newpartnershipsw

illbecriticaltocontin

uingourpaceofdigit

altransformation

26%

43%

18

%13%

Continuingtodrivedandcustomers

igitaltransformation

atarapidpaceiscrit

icaltoourcompetitio

nfortalent

23%

45%

2

4%8%

We'recontentwithresourceselsewher

whereweareondigie

taltransformationan

dareallocatinginves

tment

21%

50%

1

8%11%

0%

Veryconfident

20%

Confident

40%60%

NeutralNotveryconfident

80%

100%

Notatallconfident

Source:2022GlobalCEOOutlook,KPMGInternational

13GlobalManufacturingProspects©2023CopyrightownedbyoneormoreoftheKPMGInternationalentities.KPMGInternationalentitiesprovidenoservicestoclients.Allrightsreserved.

Strongoptimismdespiteheadwinds

Buildingblocksoftransformation

C