Manufacturers are entering into a new era of ‘disruptive complexity' which is fundamentally changing the way manufacturers compete and succeed, according to the KPMG's 2014 Global Manufacturing Outlook (GMO).

"Over the past few years, manufacturers have seen an explosion of new technologies and innovative developments in material science, advanced manufacturing and synergistic operating models. With this accelerating pace of change, manufacturers the world over are now starting to take stock of the more complex world that they are operating in, and are using that insight to redefine ‘the art of the possible'," said Jeff Dobbs, Global Chair, Industrial Manufacturing and a Partner with KPMG in the US.

In an attempt to capitalise on this environment, manufacturers say they will dramatically increase spending in R&D, pursue new collaborative business models and integrate new technologies to analyse and stimulate profitable growth.

A focus on understanding profitability

This year's GMO reveals that only 12 percent of manufacturers would categorise themselves as being ‘very effective' at determining product profitability. Further, 85 percent of respondents said they plan to make either ‘moderate' to ‘substantial' investments into systems for product or service cost improvement over the next 12-24 months.

"This isn't simply about mining data and building spreadsheets; it's about accessing the appropriate information, at the right level of granularity and - maybe most importantly - with the right speed and frequency to generate timely insights that help people make better business decisions," noted Jim Scalise, a Management Consulting Partner with KPMG in the US.