Solutions

IndustrIal ManufacturIng

Efficiently linking processes in the manufacturing industrycutting-edge solutions for designing and organizing the value chain

2 | Efficiently linking processes in the manufacturing industry

geographic borders are becoming increasingly less signifi-cant, the Internet is becoming the primary distribution channel, and large conglomerates are among the most successful companies in the world. at the same time, government regulation is constantly intensifying in all areas, raw materials are becoming scarce and resource as well as energy efficiency are the hot topics of the day. society as well as the market and the competitive environment are undergoing far-reaching changes. therefore, it is imperative to discuss upcoming, unavoidable and complex changes along the value chain and potential ways to deal with them.

KPMg has been dealing with this multitude of challenges: Our worldwide survey “global Manufacturing Outlook” (see page 6), published in summer 2013, presents some interesting results:

• global manufacturers are strengthening their business activities all over the world to take advantage of growth opportunities in global markets.

• at the same time, they are realigning their business models and reviewing their product portfolios to more effectively control costs.

• companies consider their partners as part of their “network” and strive for a real-time overview of cus-tomer needs, inventories and deliveries and capacity along the value chain.

• Manufacturers are increasing the transparency of their processes to more effectively manage risks, cash flows and costs.

• In particular for innovations and new products, compa-nies are placing the value chain at the center of their corporate strategy.

• to remain competitive, manufacturers are increasingly focusing on innovation.

Challenges of the value chainthe various issues that companies face today can be summarized as follows:

• Bundling of still fragmented global material and cash flows

• Establishment of strategic (end-to-end) processes

• development of innovations and introduction of demand driven supply-chains

• Establishment of a transparent value chain to take full advantage of optimization potential

KPMg has embraced these complex challenges and developed an Eight Cluster Approach, which bundles the most important “cross-functional” topics in the realignment of the value chain.

In the following, we present this approach in detail and would be pleased to discuss this with you personally.

Efficiently designing and organizing the value chainfrom a globally fragmented to an integrated, cross-functional cooperation

Dr. Gerhard Dauner

Partner Head of Industrial Manufacturing Europe, Middle East and africa

Dr. Marcus Schüller

Partner consulting – supply chain Management & Procurement

Effi ciently linking processes in the manufacturing industry | 3

Supply Chain Management

With our “Eight cluster approach”, we provide comprehensive support to our clients.

Our experienced professionals assist you,

• In concretely analyzing your individual needs and risks.

• In implementing cross-functional business scenarios as well as a global organization with integrated processes.

• In setting up a demand driven supply chain of which performance is measured and checked with respect to its impact on fi nancial parameters.

• In economically ensuring sustainability and compliance.

• In visualizing impacts on enterprise value on the basis of concrete numbers.

Our Eight Cluster Approach the realignment of the value chain requires an integrated and “cross-functional” approach

ZOLL

DOUANE

Advantages of our approach • transparency, compliance and cost savings

• transparency across the entire value chain, in particular with regard to cash fl ows, sustainability as well as operational and strategic risks

• globally standardized, optimized processes and organi-zational structures that are continuously monitored and adjusted for compliance; in addition, their performance is measured and presented as part of the fi nancial results

• long-term cost savings that are achieved “cross- functionally” with all relevant stakeholders as well as optimization of operating assets

Assurance

Consulting Law*

Tax

Compliance

Sustainability

Financial Risk Management

Transactions & Restructuring

* legal services are provided by KPMg rechtsanwaltsgesellschaft mbH.

4 | Effi ciently linking processes in the manufacturing industry

On the basis of future demands on the global value chain, we defi ned eight clusters according to different topics, each representing specifi c issues and challenges.

Our Eight Cluster Approach in detail Overview of the key topics along the value chain

ZOLL

DOUANEGlobal transformation of the corporate network and the value chain

• Market coverage• Operational hedging • Localization• Site location strategy• Risk assessment• Greenfi eld/Brownfi eld• Business valuation

Alignment of supply and service fl ows along fi scal considerations

• Transfer prices and value added tax (Vat)

• Transparency of tariffs and trade barriers

• Compliance

Development of supplier portfolios and securing supply

• Assessment of supplier performance • Establishment of a strategic portfolio• Global negotiations

Securing a workforce to meet future requirements

• Defi nition and examination of strategic requirements

• Qualifi cation measures and trainings• Development of a global expert

and talent pool

Innovation management and the evaluation and allocation of intellectual property

• Evaluation of intellectual property and risk management

• Fiscal allocation• Make-or-buy analysis• Service-based business model• Realignment of the business model• Innovation-focused value chain

Working capital optimization through supply chain synchronization

• Strategy & operations planning (production, logistics, procurement, sales)

• Cost reduction• Value engineering• Value chain risk management

Securing value creation through contract management

• IT support• Process optimization• Identifi cation of tax and legal risks*• Contract design*

Management of global sustainability and compliance requirements

• Implementation of requirements into the global value chain

• Interface management• Governance system including

monitoring and reporting• Assurance (PS 980)

to assist you adequately with the realignment of your value chain, KPMg has set up a cross-functional task force, which is available to you for any questions or problems.

Please contact us if you need our support. together, we will identify sustainable solutions to essential challenges: reduction of complexity and sustainable results – quickly and reliably.

* legal services are provided by KPMg rechtsanwaltsgesellschaft mbH.

Effi ciently linking processes in the manufacturing industry | 5

6 | Effi ciently linking processes in the manufacturing industry

• Quick scans: Cross-functional positioning or maturity level analysis of the value chain in terms of corporate needs, strategic orientation and competition

• Mapping of risks and future requirements

• all functions taken into account when selecting approach and methods

• defi nition of potential transformation scenarios and description of their effects on key fi nancial indicators (EBIt, rOI etc.) based on measurements in cash fl ow models

• design and implementation of appropriate organizational structures and processes as well as the establishment of a continuous monitoring and controlling system

Our teamOur experienced task force encompasses specialists and experts from areas such as supply chain Manage-ment & Procurement, strategy & Operations, strategic sourcing & Procurement, forensic, tax, assurance services, Information technology, risk & compliance, corporate finance, sustainability services und law*. With respect to your specifi c challenges they ensure that

• Widely recognized experts,

• Proven-in-practice tools and methods as well as

• Benchmark data

are available through our global KPMg network.

Our approach from a holistic point of view

Recent study

The Global Manufacturing Outlook 2013: Competitive Advantages

the changes in the past few years have brought enormous opportunities for global manufacturers. the “global Manufacturing Outlook 2013” addresses potential competitive advantages that can be gained from the utilization of supply chain networks.

the complete study (in English) by KPMg International can be downloaded from our web site www.kpmg.de/GMO-2013

The Global Manufacturing Outlook 2013: Competitive Advantages

the changes in the past few years have brought

* legal services are provided by KPMg rechtsanwaltsgesellschaft mbH.

Rely on our extensive experience. With some 3,000 procurement projects and more than 25,000 successfully implemented cost-saving initiatives – one of many examples!

Effi ciently linking processes in the manufacturing industry | 7

Case study from a fragmented to an integrated value chain

Advantages• Cost savings and tax optimization

• Global “cross-functional” cooperation

• Optimization of the innovation process

• Faster processing times

• Sustainably improved margins

• Increased corporate value

• Stable and reputation enhancing supply chain

the following example process steps provide you with an insight into our approach to the realignment of a value chain.

Initial situation• fragmented procurement organization

in an early stage of maturity

• low level of cost savings

• low level of standardization in procurement and supply chain processes

• lack of assistance for the procurement of new products and semi-fi nished products

• lack of systematic tracking to meet sustainability requirements

Analysis and design • draft of a central, global purchasing

organization based on a maturity level analysis and business cases

• audit of regulatory and tax requirements

• assessment of sustainability requirements

• design of global process standards

• Establishment of a global competence center for methods and tools

Implementation• Establishment of a new purchasing

organization

• Introduction of a strategic inventory manage-ment system and worldwide uniform process standards with It support

• global, multi-dimensional supplier evaluation and new product initiative process support

• governance modelling

• change management

the information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. no one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2014 KPMg ag Wirtschaftsprüfungsgesellschaft, a subsidiary of KPMg Europe llP and a member firm of the KPMg network of independent member firms affiliated with KPMg International cooperative (“KPMg International”), a swiss entity. all rights reserved. Printed in germany. the KPMg name, logo and “cutting through complexity” are registered trademarks of KPMg International.

Contact

KPMg ag Wirtschaftsprüfungsgesellschaft

Dr. Gerhard DaunerPartner Head of Industrial ManufacturingEurope, Middle East and africaT +49 89 9282-1136gdauner@kpmg.com

Daniela LeopoldManager Industrial Manufacturing Europe, Middle East and africaT +49 89 9282-1156dleopold@kpmg.com

www.kpmg.de