Manufacturers have their work cut out for them in 2010, according to Barry Misthal, U.S. Industrial Manufacturing leader at PricewaterhouseCoopers. "Since 2009 saw a significant drop off on product development due to lack of credit and demand, driving demand in 2010 becomes critical," Misthal explains.
One way to drive this top line growth is through improving customer information management which will require executives to get closer to their customer. "Manufacturers need to get face-to-face with their customers in order to understand how these customers plan to growth their business and how the manufacturer can fit in with that. They should get clear insight on what they need to do on the product development side," Misthal says.
While it seems likes these objectives should be part of any good business plan, it is more important than ever in 2010 due to increased competition. "Many companies are now streamlined and have their costs under control and are therefore in good shape to grab market share. That wasn't necessarily the case from 2007-2009," says Misthal.
Opportunities to gain new customers exists both in North America as well as other regions including Asia, India, South American and part of Central Europe, Mistal points out.
Another critical factor is how companies manage their fixed assets. "Companies that have invested in new facilities in 2007-08 and have new capacity are itching to get loaded up and develop products," explains Misthal. The companies that will do well are the one that are flexible and can maneuver their fixed assets to address the uptick in orders."
Barry Misthal, U.S. Industrial Manufacturing leader, PricewaterhouseCoopers
Looking at the year overall, PwC sees strong indications that return of sales orders will happen toward end of 2010 with substantial pick up in 2011. And in order to get ready for the increased demand they have a few recommendations:
- Stay the course on investments
- Find partners or go into joint ventures for new technology
- Invest in new product development, including investing with customers
- Focus on employment and look at the timing issue in production which means many companies need to bring back resources to meet future demand
- Be open to outsourcing
- Look closely at supply chain as they will continue to be at risk in 2010
Misthal also suggests that manufacturers look outside their traditional sources to find new technologies."Some of these technologies might not originate in the manufacturing space but can come from technology companies."
This year is going to require a lot of creativity, says Misthal. "How companies go to market will take a different form."