23 posts categorized "Manufacturing"

August 01, 2014

Farnborough Airshow showcases 100 years of aviation

Ind_man_glb_ho_2033_300X200One of the best ways to see innovation in the manufacturing industry is to attend the Farnborough Airshow. This year, the public airshow, which rotates between Paris and Farnborough each year, showcased aircraft innovation and technology from every decade in the last century. I had the privilege to once again attend this premier event and met with many senior executives from leading Aerospace & Defense (A&D) sector companies. For the A&D industry, this airshow is where deals are made. The show organizers estimated $201 billion in contracts were committed during the week and media reported the top aircraft makers signed around $115 billion in jet deals.

During the airshow, Deloitte released a new thought leadership report, 2014 Global aerospace and defense sector financial performance study. The report indicates that the overall global A&D sector growth is slowing – the revenue growth rate declined from 5.9 percent in 2012 to 3.1 percent in 2013. While growth continues in the commercial aerospace segment, contraction in defense spending continues to be impacting the pace of revenue growth. I encourage you all to have a look at this report which is recognized by many as a scorecard for the industry.

As I listened to executives across the industry, I heard a sense of optimism at a higher level than in 2013. Many of the companies appear to be looking to grow through acquisition. For suppliers, this may be necessary; in part to gain scale to help them better manage the demand for pricing targets set by the original equipment manufacturers (OEMs). Interestingly this year, the defense companies seemed to have a much more positive view of the landscape, as they continue to navigate the realities of tight defense spending.

One of the high points of our week was a reception that Deloitte co-hosted with Skadden Arps, a leading law firm serving the A&D industry. General Wald, Federal Practice Senior Advisor with the Deloitte U.S. firm (Deloitte Services LP), shared a few of his insights on the growing importance of technology to the U.S. military today, and also offered a few examples from his distinguished years of service.

Finally, please read some of the perspectives shared with the media about developments in the industry by Tom Captain, Deloitte Touche Tohmatsu Limited Global A&D Sector Leader: Airbus Deliveries Rise but Trail Boeing; Company Delivered 303 Planes in First Half (Wall Street Journal) and Weapons-makers The case for defence (The Economist).

Have questions or comments? Share your thoughts with me @TimPHanley.


Tim HanleyTim Hanley is the Global Leader of the Manufacturing Industry group of Deloitte Touche Tohmatsu Limited (DTTL). In his global industry leadership role, he directs strategic initiatives and investments to grow Deloitte member firm market share within the manufacturing industry. During his distinguished 35-year career, Hanley has led teams serving all business aspects, including consulting with top management regarding organizational financial strategy development and execution, acquisitions, and market development.

July 07, 2014

Talent, urbanization, and energy underpin Asia Pacific dynamics

Shanghai_300X200A few weeks ago, I had the privilege to host an Asia Pacific Regional Manufacturing Summit and could not have asked for a better venue than Shanghai, China – a vibrant and important marketplace for Deloitte member firm global manufacturing clients. The event focused on the evolving industry themes impacting the region.

Talent was one of the first themes discussed. A guest speaker from the US-China Business Council, highlighted the rising cost of talent in China, citing an average of eight to 10 percent increases in annual salaries compared to the average rate of three percent in markets like the United States. As Chinese manufacturers aim to move up the global value chain (read Deloitte China’s report “Transforming from world factory to smart manufacturing”), wage inflation will continue to be a challenge for both local and international manufacturers. However, it does not appear to have significantly dampened investment interest in China.

Urbanization was another theme highlighted and an important trend to watch. It is just one of the factors attracting investment into China. A speaker from The Economist Group provided the audience with fresh insights on the urbanization patterns occurring in China. Did you know that China’s urbanization rate is expected to increase to 61 percent of the country’s total population by 2020 (up from around 50 percent today), and to 67 percent by 2030? That translates to an urban population of around 940 million people by 2030 (up from 670 million in 2010) with most of the growth in mid-size cities like Guangdong, Henan, Hebei and Shandong. While significant due to the size of the population, China’s urbanization rate actually falls behind the average urbanization rate across OECD economies of just below 80 percent in 2010. Understanding this megatrend will likely be important for multinational and local manufacturers alike as they consider how and where to grow their business in China.

Harnessing alternative sources of energy was another theme highlighted at the event. The energy agenda, as an example, is a topic of interest to Japanese manufacturers as the country strives to find sustainable alternatives to nuclear power with a view to renewables including solar and hydrogen fuel. During the event, I also learned that Japanese manufacturers are driving increased investment in research and development in an effort to build technology leadership and grow its domestic market. Long recognized as leaders in globalization, Japanese companies are continuing to seek growth in emerging markets such as China and Southeast Asia.

As always, I am interested in exchanging perspectives on industry and market trends and developments, so please do not hesitate to leave your comments below or tweet me @TimPHanley


Tim HanleyTim Hanley is the Global Leader of the Manufacturing Industry group of Deloitte Touche Tohmatsu Limited (DTTL). In his global industry leadership role, he directs strategic initiatives and investments to grow Deloitte member firm market share within the manufacturing industry. During his distinguished 35-year career, Hanley has led teams serving all business aspects, including consulting with top management regarding organizational financial strategy development and execution, acquisitions, and market development.

June 09, 2014

Growth in a disruptive environment

Ind_lsh_glb_ho_1958I heard some fascinating stories recently of how three European manufacturing companies are innovating and growing in the face of a disruptive environment. Senior executives from a growing commercial aircraft supplier, global process manufacturer, and leading consumer and industrial products company were featured speakers at a Deloitte manufacturing industry event. Despite the different sectors in which they compete, common threads emerged, including how the companies are embracing new technologies to innovate, how they are harnessing the power of collaboration in that effort, the new approaches they are taking to compete in growth markets, and a shared focus on developing talent.

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May 27, 2014

Is the next manufacturing revolution here?

Thumb_ind_man_glb_ho_1929_resize_1024_0It is estimated that there were over 12,000 articles and media stories published over the last year on additive manufacturing, more popularly known as “3D printing”. This topic has been discussed at many of the industry events, client meetings, and strategy sessions that I attend across the globe. While additive manufacturing has recently been a topic of growing interest, the technology has evolved over the last three decades. I wanted to highlight additive manufacturing as it is likely that we are only just seeing the beginning of the potential that this and other advance manufacturing technologies can bring to manufacturers’ innovation and growth strategies.

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May 21, 2014

The Philippines: the next GVC success story?

Manila, Philippines blog jpegAccording to the United Nations, economies with the fastest growing global value chain (GVC) participation “have GDP per capita growth rates some 2 percentage points above the average.”1 Much of the remarkable growth in Asia is attributable to this ability to participate in GVCs. The Philippines, where the World Economic Forum on East Asia is opening today, may very well be the next example of this success.

With a 7.2 percent growth rate in GDP in 20132, the Philippines possesses many of the traits needed to move up the global value chain. Not only does it have a stable macro-economic environment, but the country also has a emerging services sector, particularly in business process outsourcing (BPO)—services like call centers and IT that are often outsourced from developed economies. The BPO market in the Philippines now accounts for 9.5 percent of the worldwide market, with metro Manila the second-largest global outsourcing destination.3 And more than 50 percent of the Philippines’ overall GDP value-add is contributed by services.4

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April 07, 2014

Japanese manufacturers focused on high performance

Bzi_gro_glb_ho_1918A few weeks ago, I had the opportunity to return once again to Japan to visit with a number of Deloitte Japan manufacturing clients. One of the many highlights of my trip this month was the opportunity to meet with several manufacturers in Nagoya. Japanese manufacturers have been long admired by many for a relentless focus on continuous improvements to their business. So it is not surprising that during my visit we had rich discussions around best practices of leading manufacturers to sustain top performance.

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February 24, 2014

Connectivity and innovation underline 2014 for automotive industry

Auto showA few weeks ago I had the opportunity to join thousands of global automotive industry executives in Detroit for the North American International Auto Show 2014. The show continues to be a striking demonstration of the dynamic innovation happening in the sector. Original equipment manufacturers (OEMs) use this event to kick the year off with an outstanding showcase of new vehicle designs, many of which feature innovative technologies to help consumers stay connected. (Read Deloitte views on connected vehicles), What was also striking to see this year was the further integration of advanced materials in some of the new models. (Read more on Advanced Materials Systems trends).

During the auto show, the Deloitte U.S. member firm released the 2014 Global Automotive Consumer Study: Exploring consumers’ mobility choices and transportation decisions, sharing perspective on Generation Y consumer trends. Based on a survey of almost 700 U.S. Gen Y consumers, around 60 percent expect to buy or lease a car within the next three years. Not surprisingly affordability and high operational and maintenance costs had been top reasons preventing ownership. But as explained by graduate school students during the annual Deloitte U.S. Gen Y event, as their purchasing power grows, vehicle ownership is more in reach. (Read the Deloitte U.S. press release).  Please stay tuned over the next several months, as Deloitte member firms worldwide launch the local findings of a broader mobility survey of more than 23,000 consumers across 19 countries.

Like in many other countries, the automotive industry is a vital engine for economic growth in the U.S. Given industry sentiment that 2014 is expected to bring growth in production of new passenger and light commercial vehicles, this certainly is a positive sign for the U.S. economy and local industry.


Tim HanleyTim Hanley is the Global Leader of the Manufacturing Industry group of Deloitte Touche Tohmatsu Limited (DTTL). In his global industry leadership role, he directs strategic initiatives and investments to grow Deloitte member firm market share within the manufacturing industry. During his distinguished 35-year career, Hanley has led teams serving all business aspects, including consulting with top management regarding organizational financial strategy development and execution, acquisitions, and market development.

December 19, 2013

Manufacturers wait and watch India

Ind_er_glb_ho_785_hiAs you can imagine, India is an interesting place these days. As highlighted by Deloitte’s most recent global and Asia Pacific economic outlooks, the Indian economy has clearly slowed down and the promise for accelerated growth that seemed to be on the horizon a few years ago appears elusive.

There are a variety of potential reasons for the economic slowdown and falling value of the rupee in India. However, based on conversations with senior executives and industry observers during my recent visit to the country, most of the challenge revolves around the country’s inability to establish the reforms needed to attract more foreign direct investments. Many multi-national corporations (MNC’s) have been increasingly cautious about investment in India and most Indian business leaders that I talked with believe that significant reform may not come until after the elections in 2014.

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October 29, 2013

Awakening in the land of the rising sun

TokyoEarlier this month, I had the opportunity to meet with several manufacturing executives and also leaders of the Deloitte Japan manufacturing industry practice. On this return visit, I was very interested to learn more about the current strength of the manufacturing economy in Japan and to get a sense from Deloitte member firm clients on their views of the business landscape in the near term. An awakening was in the air with rising business confidence.

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September 20, 2013

Growth again in Europe?

Munich 2Over the past several years, the global competitiveness of manufacturing in Europe has been challenged. It certainly has been acknowledged that the ability of European manufacturing economies to compete globally has been weakened both by the challenges in their respective economies, as well as an increasingly strong global competitive landscape.

Amidst these challenges in Europe, global competitors have also been clearly getting stronger, and the bar is rising. For example, in the U.S., the ability to extract shale gas has given the U.S. both a significant and relatively long term energy advantage. This advantage comes both in a secure source of energy through plentiful shale reserves, and also at a very competitive cost. In the emerging markets of Asia, both in the major market of China, as well as in frontier markets such as Thailand and Indonesia, capabilities continue to mature. Based on our recent Global Manufacturing Competitiveness Index, executives view China as the strongest in terms of global manufacturing competitiveness. The frontier markets also have very strong momentum, and are viewed as very important markets in the years ahead.

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