Manufacturing CEOs have had to change gear rapidly to deal with the challenges of COVID-19. They are protecting their employees, deepening relationships with their vendors and customers, and redefining what success looks like in a changed world.
The greatest threat to manufacturers' growth over the next three years, apart from the pandemic, is risk to the supply chain, according to chief executives who responded to the survey. This places supply-chain resilience front and center in the minds of CEOs.
Manufacturers are not just deploying digital technologies to help make their supply chains more flexible. They are also investing in a range of technologies that are part of what has come to be called the fourth industrial revolution. Executives say that the pandemic is proving to be a shot in the arm for the digital transformation of their companies. Ninety-six percent of manufacturing CEOs say that the progress to digitize their operations has accelerated.
5G is expected to support a wide array of new solutions. Digital capabilities based on Internet of Things, Artificial Intelligence, autonomous operations, virtual reality and drones are among the solutions that employ 5G networks to deliver big gains in productivity and accelerate innovation.
The pandemic that began to emerge in early 2020 is the most serious threat to global public health in a century. It has not only changed (and ended) many lives but has also jolted global manufacturing in ways that are likely to reverberate well into the future. To find out how CEOs are responding to the pandemic in eight major economies around the world, KPMG International surveyed more than 300 people in July and August, including chief executives in industrial manufacturing. The main finding is that, at this unique moment in modern history, companies in the sector are striving as quickly as possible to become more resilient, by adapting to drastic changes in value chains, many of which were unforeseen at the end of 2019.
COVID-19 is challenging management teams in many ways, from balancing the need to reduce supply chain risk against the knock-on impact on cost competitiveness, to embracing technology and new ways of working.