French Manufacturing Competitiveness Radar 2014/2015
Paris, March 2015
Improved Outlook?
2 French Plants Competitiveness 2014.pptx
Roland Berger's manufacturing Competitiveness Radar
We are proud to present you the third edition of our survey on French plants competitiveness.
The role of manufacturing in advanced economies is changing.
The current survey was conducted between September and November 2014, involving more than
100 plant managers and representing a broad range of French industries. The survey captures prevailing
trends on six topics:
Evolution of French manufacturing competitiveness since 2012 and its outlooks for 2015
Profit margin levels
Typical profile of competitive and non competitive plants
Keys levers to increase competitiveness
Appropriation by French plant managers of Industry 4.0
Innovation
1.
2.
3.
4.
5.
6.
3 French Plants Competitiveness 2014.pptx
1
4
4
5
8
9
9
11
14
17
Editing & printing
Pharmacy & perfumery
Mechanical industry
Automotive & transportation
Chemistry & plastics
Agri-business & household equipment
Metal working and mineral products
Electric & electronic equipment and components
Textile industry
Process industries (wood, paper, glass, building)
2014 survey results are based on contributions from French plant managers across a wide scope of industries
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
Number of respondents per industry
Survey responses from more than 100 plants managers
100% of surveyed plants are based in France
18% are French subsidiaries of international firms
58% of surveyed plants have more than 250 FTEs, while 21% have less than 100 FTEs. 15% have more than 1,000 FTEs
Most industry segments were covered by the analysis
Sample portrait
4 French Plants Competitiveness 2014.pptx
To p e x e c u t i v e s u m m a r y
77% of respondents consider themselves as competitive (vs. 78% in 2013), and 63% of respondents expect their competitiveness to improve in 2015 (vs. only 56% in 2013).
Margin levels were stable in 2014 and outlooks for 2015 are positive.
Smaller plants improved their competitiveness in 2014 although larger plants still are on average more competitive. The level of capital is not discriminatory between competitive and non competitive plants. Less competitive plants export less but are more exposed to international competition, a result already underlined by our past surveys.
French plants' outlook is improving – Product innovation as a key issue – Limited progress in Industry 4.0 awareness
Labor costs still poses the highest challenge to improve competitiveness, but to a more limited extent than in 2013 and 2012. Product innovation and R&D are other hot issues on which plant managers want to improve themselves. Mastering industrial processes and operational efficiency are even more important, but plant managers perception is that current performance is already satisfactory.
Competitive plants still have limited awareness of Industry 4.0 concepts although some impact is expected from cyber-security, radio frequency identification, robotics and plants super-connections.
Competitive plants innovate more and appear also more active on their product portfolio. Reflecting the increasing attention on product innovation, Marketing and R&D managers are getting more involved on portfolio reviews.
1.
2.
3.
4.
5.
6.
5 French Plants Competitiveness 2014.pptx
France may further destroy manufacturing jobs in the coming years – automation playing key role
Source: INSEE, OFCE, COE-Rexecode, Roland Berger
1 354
518
435
1771 222
Additional Job
seekers 2013 - 2023
Creation of Jobs
in Services
Destruction of
Jobs in Services
Creation of
Manufacturing Jobs
128
Destruction of
Manufacturing Jobs
Active Population
Growth 2013-2023
-50t manufacturing jobs
+837t jobs in services
Creation & destruction of jobs in manufacturing and services in France [2013 – 2023; thousands]
6 French Plants Competitiveness 2014.pptx
French industries will be impacted differently depending on their added value and their addressable markets
Commoditized products & services
Differentiated products & services
(technological advance, know-how, brands)
Local Markets (need for proximity or limited transportation capacity)
Global Markets (dematerialized service ou strong transportation capacity)
Source: Roland Berger
Added Value
Adressable Markets
Basic industries
Services to indivuals and low added value businesses
Agri-business
Automotive
Pharmacy Plastic and industry
Aeronautics & equipments
Agriculture
Electricity Production
Manufacturing specialty products
Luxury Intellectual services with strong added value
Administration
Mining and raw material extraction
Construction
Public services
Services that cannot be offshored/delocalized
Manufacturing Service Bubble size proportional to size in French economy
7 French Plants Competitiveness 2014.pptx
French competitiveness stabilized in 2014
Do you consider your plant as…
25% 22% 22%
63% 66% 64%
12% 12% 13%
Competitive
Not competitive
Very competitive
2013 2012 2014
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey, Trendeo, INSEE
1) Plants with more than 10 employees
1.
8 French Plants Competitiveness 2014.pptx
The outlook of French plants competitiveness is improving
% of respondents considering that their competitiveness…
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
Very Competitive plant
Competitive plant
Not Competitive plant
77%
80%
42%
54%
61%
73%
2012
2013
2014
…has Improved vs. 2011
…was going to improve
…actually improved
2015 …will improve 59%
52%
4%
34%
39%
49%
15%
25%
52%
68%
73%
56%
1.
…was going to improve
…actually improved
9 French Plants Competitiveness 2014.pptx
Most plant managers expect profit margins to increase in 2015 – Still 20% of respondents in distress
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
% of respondents considering that their profit margin level….
33%
…has
decreased 36%
…has
increased 31%
…has remained
stable
23%
…will
increase 41%
…will remain
stable 39%
…will
decrease
59%
27%
14%
45%
35%
20%
Competitive / Very competitive
In 2014 vs. 2013
From 2014 to 2015
Not competitive TOTAL
45%
23%
32%
35%
30%
35%
2.
10 French Plants Competitiveness 2014.pptx
81%83%
71%
2013 2012
-2% + 12 pts
2014
Smaller plants seem to perform slightly better, but size not a strong differentiating factor
Plants considering themselves competitive or very competitive, function of sales
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
75%79%82%
- 3 pts
2014
-5%
2013 2012
Plants with sales < 50 M EUR
Plants with sales > 50 M EUR
3.
11 French Plants Competitiveness 2014.pptx
Share of exports in sales is increasing – but no clear correlation between competitiveness and level of exports
Share of export sales on total plant sales
45%41%42%
2014 2013 2012
46%
38%41%
2012 2014 2013
49%
36%39%
2014 2013 2012
3.
Very competitive Competitive Not competitive
12 French Plants Competitiveness 2014.pptx
Competitive or Very competitive Not competitive
…however, less competitive plants suffer more from international competition
Competitive landscape - % of non French first competitors
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
68%67%60%
+ 7 pts
2014 2013 2012
86%
74%78%
- 4 pts
2014 2013 2012
3.
13 French Plants Competitiveness 2014.pptx
Competitive plants do not necessarily invest more
Average investments (% of sales) per competitiveness level
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey,
4.8%4.9%
5.5%
2014 2013 2012
5.6%
4.6%
5.4%
2014 2013 2012
5.0%4.8%
5.5%
2012 2014 2013
3.
Competitive and very competitive plants Not competitive plants TOTAL
14 French Plants Competitiveness 2014.pptx
Improving industrial processes and operational efficiency more critical than labor costs – Possible CICE effect
16%
35%
45%
54%
56%
61%
66%
69%
71%
73%
79%
80%
81%
82%
84%
91%
91%
Local network of same industry actors
Local infrastructures
Public support
Marketing
Plant size
Group size
Energy costs
R&D
Labor costs
Product innovation
Manufacturing flexibility
Sales force
Supply chain
Labor qualification
Raw material purchases
Operational efficiency
Industrial processes Critical issues
Important issues
Secondary issues
% of respondents considering the criteria either critical or very critical
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey,
4.
2014
2
3
1
4
6
7
8
9
5
10
12
13
14
15
16
11
17
vs. 2013
+1
+1
-2
+4
-1
+3
-2
-1
-3
=
=
+1
-1
+1
-1
=
=
15 French Plants Competitiveness 2014.pptx
Labor costs still too high – Increasing share of innovation and R&D as critical productivity mismatch
Operational efficiency 14%
R&D 17%
Product innovation 23%
Labor costs 34%
7%
Industrial processes 8%
Manufacturing flexibility 9%
Supply chain 10%
Public support 12%
Sales force 13%
Local infrastructures -15%
Plant size -13%
Group size -8%
Local network of same industry actors 1%
Labor qualification 2%
Energy costs 4%
Marketing 5%
Raw material purchases
Competitiveness mismatch
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
This chart measures the difference (or mismatch) between the number of respondents considering a criteria critical and those regarding themselves as actually competitive on this criteria.
Rationale =
+1
+5
+7
=
-4
-1
+3
-6
-1
-5
+2
-1
+1
-3
-3
-6
4.
2014 vs. 2013
Critical issues
Important issues
Secondary issues
2
3
1
4
6
7
8
9
5
10
12
13
14
15
16
11
17
16 French Plants Competitiveness 2014.pptx
Competitive plants are more worried about innovation and R&D than just labor costs
Manufacturing
flexibility
Raw material
purchases
Labor
qualification
Product
innovation Supply
chain
R&D Labor
costs
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
% of respondents considering themselves competitive on a criteria considered critical1)
1) Number of respondents considering themselves competitive over number of respondents considering the criteria as critical, amongst all respondents of their respective "competitiveness category"
Competitive plants Not competitive plants
2014
27% 40%
2013
19% 28%
2014
24%
50%
2013
67% 55%
2014
41% 49%
2013
63% 56%
2014
64% 71%
2013
74% 67%
2014
59% 74%
2013
63% 76%
2014
64% 81%
2013
67% 77%
2014
77% 81%
2013
85% 83% 88%
2014
59% 82%
2013
78%
4.
Operational
efficiency
17 French Plants Competitiveness 2014.pptx
Our 2014 manufacturing survey updates French plant managers awareness on Industry 4.0
Overview of a selection of Industry 4.0 key concepts [selection]
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
Cybersecurity
> Technologies, processes and standards (ISO 27001) enabling organizations to protect computers, networks and data from unauthorized access
Big data
> Refers to data so large, complex or rapid that it is difficult to process using traditional database and software techniques
Cloud computing
> The capacity to share computing resources – typically through the Internet - rather than having local servers or personal devices to handle applications
Plants super-connection
> Connection of machines, work pieces and systems, to create intelligent networks along the entire value chain that can control each other autonomously
3D printing
> Also called additive manufacturing. A process of making a three-dimensional solid object of virtually any shape from a digital model
> Allows customizable, one-off production with virtually no waste
Augmented reality (AR)
> Real-world environment digitally enhanced by computer-generated sensory input such as sound, video, graphics or GPS data
Robotics
> Technology dealing with the design, construction, operation, and application of robots in order to improve productivity, product quality and worker safety
Radio frequency identification (RFID)
> Automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders
Rapid prototyping
> Group of techniques using in particular 3D computer aided design data to rapidly and efficiently turn innovative ideas into scale models
5.
18 French Plants Competitiveness 2014.pptx
Competitive plants do not necessarily have a better awareness of Industry 4.0 concepts
Réalité augmentée 27%
Plants superconnection 30%
Big data 31%
Cloud computing 34%
3D printing 46%
Robotique 50%
RFID 55%
Cybersecurity 86%
23%
36%
27%
27%
55%
36%
77%
73%
15%
26%
21%
11%
19%
44%
35%
61%
14%
32%
36%
27%
27%
36%
50%
73%
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
Industry 4.0 key concepts overview – Understanding and expected impact
Amongst competitive plants
Amongst non competitive plants
Have a good / very good understanding
Qualify topic as to be impactful / very
Have a good / very good understanding
Qualify topic as to be impactful / very
5.
19 French Plants Competitiveness 2014.pptx
Industry 4.0 "hot topics" are cyber-security, robotics and radio frequency identification (RFID)
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
Industry 4.0 key concepts overview – Understanding and expected impact
Well understood
Impactful
-9
-26 -14
-22 -16 -9
-38 -4
88%
26% 35% 32% 58% 48%
62%
30% 52%
32% 48%
60% 69% 47%
85% 83%
15% 22% 42%
58%
21% 22% 39% 36%
63% 61% -1 +2 +5
-7
-15
-1 +3
+2
15% 15% 24% 22% 27% 23%
2014 2013
5.
Cybersecurity Robotics RFID Plants super-connection
Big data 3D printing Cloud computing Augmented reality
Cybersecurity RFID 3D printing Robotics Cloud computing Plants super-connection
Big data Augmented reality
20 French Plants Competitiveness 2014.pptx
Competitive plants work more intensively their product portfolio – With focus on innovation and renewal
…more than
25% of plant sales 9%
…between 10%
and 25% of plant sales 23%
…less than
10% of plant sales 68% 58%
16%
25%
Share of sales
generated by
products
launched after
1st January 2013
Frequency of
product
portfolio review
…at least once a month 9%
…several times a year 14%
…once a year 55%
…less than once a year 23%
14%
35%
23%
28%
✓ ✓
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
Non competitive plants Competitive plants
6.
21 French Plants Competitiveness 2014.pptx
Marketing and R&D managers are key managers to be involved on product portfolio reviews
Portfolio review [percentage of respondents]
57%
64%
64%
66%
68%
78%
83%
89%
Supply chain
Manufacturing
Sales
Finance
R&D
Top management
Marketing
Management control 53%
57%
62%
69%
75%
75%
Adapt pricing
Abandon products
or clients
Allocate production
between plants
Develop new products
Invest or not
Improve efficiency
and processes
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
6.
Who is involved… What decisions are taken…
22 French Plants Competitiveness 2014.pptx
Organization of R&D and Marketing (in site/off-site/centralized) does not appear as a relevant criteria for performance
36%
64%
20%
45%
50%
50%
85%
Marketing
Sales
Product development
Research
Product industrialization
None
Limited
Strong
7%
42%
51%
30%
47%
48%
48%
96%Teams
located in
plants
Involvement
in innovation
Source: Roland Berger Manufacturing Competitiveness Radar 2014 Survey
6.
Non competitive plants Competitive plants
23 French Plants Competitiveness 2014.pptx
Michel Jacob, Managing Partner France
Max Blanchet, Senior Partner
Emmanuel Bonnaud, Senior Partner
Georges de Thieulloy, Partner
Candice Rodriguez, Marketing & Public Relations
Amsterdam Barcelona Beijing Beirut Berlin Boston Brussels Bucharest Budapest Casablanca Chicago Detroit Doha Dubai Düsseldorf Frankfurt Gothenburg Guangzhou Hamburg Hong Kong Istanbul Jakarta Kuala Lumpur Kyiv Lagos Lisbon London Madrid Manama Milan Montreal Moscow Mumbai Munich New York Paris Prague Riga Rome São Paulo Seoul Shanghai Singapore Stockholm Stuttgart Taipei Tokyo Vienna Warsaw Zagreb Zurich
We thank the following
people for collaborating to
produce this study:
To be part of our 2015 survey,
please send your email to:
PARIS OFFICE 62-64, rue de Lisbonne
75008 Paris Phone +33 1 53670-320