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GLOBAL OUTLOOK
FOCUS 21
Destination UK
This is good news for the UK, which is well positioned to benefi t. Stephen Cooper, Head of UK industrials, points out that the UK’s relatively low tax rate regime and strong reputation for skills are a big draw for foreign investors but adds that its strong legal framework is vitally important to manufacturing fi rms that are focused on innovation. “Our legal system provides good IP protection for businesses trading in the UK, which cannot be said with the same degree of confi dence for a number of our competitors,” he says.
The survey confi rms this view. The executives questioned saw the UK as a key destination for future profi t growth, ahead of the emerging economies of India and Brazil and established manufacturing economies such as Japan and Germany. 16% of executives said they had plans to source more from the UK (with only the US and China proving more popular) and of these, 92% said their investment would involve R&D and 81% said it would involve product design and development.
Room for improvement
It is apparent from the survey that there are still improvements to be made to allow supply chain partners to work together more effectively, as 43% of executives said that the links between their R&D functions and the supply chain are not yet strong enough. The biggest risk is supplier visibility – 49% of those questioned said their company was familiar only with their immediate suppliers and knew very little about the partners beyond Tier 1, let alone the rest of their network.
A lack of transparency in the supply chain highlights a lack of visibility on many of the risks associated with supply chain – counterparty risk, supplier failure and risk of disruption.
Consequently problems can come as a surprise and quickly become issues that impact brand value or customer relationships. The use of tools such as KPMG’s Vontik, a supply chain risk management platform, enables the protocols to be put in place to minimise risk by giving greater visibility of potential issues. This can provide time to mitigate or avoid the consequential impact.
As one executive questioned for the survey said, “Supply chain effectiveness is the invisible advantage,” and this will be absolutely critical to success in the future. If the sector can address the challenges ahead, there is much to be gained.
To fi nd out more, please contact: 43% OF EXECUTIVES SAID
THAT THE LINKS BETWEEN THEIR R&D FUNCTIONS AND THE SUPPLY CHAIN ARE NOT YET STRONG ENOUGH
Stephen Cooper Head of UK Industrials T: +44 (0)20 7311 1622 E:
stephen.cooper@
kpmg.co.uk
© 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
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