KPMG Conducts Survey of 146 CEOs

KPMG International conducted a survey with the participation of 146 CEOs from large-scale manufacturing companies to identify CEO priorities. The research includes insights that industrial manufacturing sector executives can use for comparison and learning as they decide how to position themselves in the face of opportunities and challenges ahead. The results show that the global pandemic, climate change and geopolitical developments have forced the sector to focus increasingly on two-pronged transformation: smart digitalization and ESG (environmental, social and governance) objectives. Across the sector, in the face of mounting demands for change from customers and investors, the need to have technologies that will drive transformation throughout the entire value chain has become more urgent and important than ever.

KPMG Türkiye Industrial Manufacturing Sector Leader and Partner Murat Palaoğlu made the following remarks on the subject:

"In a transformative industrial change process, the main lesson to be drawn from our CEO survey is a topic that is more urgent and important than ever and always remains relevant: companies put themselves at risk if they do not pay attention to their supply chains. It is impossible to achieve operational efficiency without a supply chain that has the capacity to survive in the face of change and challenges. The analysis of executive views presented in this report confirms the view that a healthy supplier chain will support the manufacturer to operate in a healthy manner. Digitalization can also reduce supply chain risk and increase sustainability levels. [caption id="attachment_148131" align="aligncenter"] Murat Palaoğlu[/caption] However, in sustainability efforts, CEOs must view ESG not merely as a means to an end but as a strategic imperative. If they do not prioritize ESG, they cannot have a healthy supply chain, and without a healthy supply chain, they will likely struggle to meet their long-term objectives. We believe our research will serve as a roadmap for CEOs on the future of the manufacturing sector in these matters."  

Primary objective: Maintaining resilience in the face of change and challenges

In the KPMG International survey, over two-thirds of CEOs (68%) answered that over a three-year period, with regard to the impact of the global pandemic on their organizations, they aimed to ensure their supply chains maintain resilience in the face of change and/or challenges. Prioritizing resilience in the face of change and/or challenges is the most frequently given answer to this question, and is significant in that it indicates the emergence of a new priority. This was followed by the answer "We will ensure that a large portion of our senior management (for example, board of directors, investor) meetings are conducted via remote access" at 51%. In third place was the answer "We will explore co-working spaces to enable employees to work under more flexible conditions" at 46%. When manufacturing sector CEOs were asked "What is the greatest threat to your company's growth?", among the responses received, supply chain risk ranked first at 25%, followed by operational risk at 13% and emerging/disruptive technology risk at 12%.  

Top priority: Digitalization

35% of CEOs stated that the primary way to reduce pressure on supply chains is to expand their company's monitoring mechanisms to cover supply chains more deeply in order to anticipate changes before they cause serious damage. For this, technology is needed that can track not only direct suppliers but also numerous transactions with fourth-tier suppliers or even beyond. One of the solutions on the agenda of manufacturing sector companies for this purpose is artificial intelligence (AI). According to the research, manufacturing companies have begun using AI-driven supply chain solutions. These solutions enable companies to produce based on supply and demand data they analyze in real time. The technology helps managers focus on applying risk management practices when any vulnerability emerges in the supply chain. AI leads ERP systems that help companies achieve end-to-end transparency. When CEOs were asked what their important operational priorities would be to achieve growth targets within three years, the answer "Improve and increase digitalization and communication across all areas in which we operate" ranked first at 24%.