83% predict their business will take at least a year to recover
SURVEY SNAPSHOT
Middle market manufacturers went above and beyond in 2020 to protect jobs, produce goods vital to the economy and help fight COVID-19.
2021 Manufacturing CFO Outlook Survey
Ingenuity Through Crisis
The pandemic accelerated Industry 4.0 adoption
45% expect revenue to increase over the next year
Innovation will be a greater focus than risk mitigation
What’s Next in Manufacturing
Manufacturers are cautiously optimistic about a gradual economic recovery in 2021, but they are not out of the woods yet. Many organizations will face liquidity issues. They must also contend with the impact of industry-wide forces on their business.
2021 Business Outlook
40%
currently have insufficient cash on hand
predict customer demand will increase in the next six months
51%
The factors most critical to the manufacturing industry’s recovery are…
Supply Chain Stability
Not all manufacturers are at the same place in their recovery. A major determinant is whether they were affected by mandated business closures in Spring 2020.
A Tale of Two Manufacturers
This year manufacturers will shift their supply chain strategy from mitigating crises to making long-term investments. Risk mitigation remains a priority, but manufacturers will be more focused on transformation and driving competitive advantage.
Supply Chain Transformation
TOP 5 SUPPLY CHAIN STRATEGIES FOR 2021
Methodology
Survey Respondents
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say their business will be thriving one year from now
48%
1
Keeping Input Costs Low*
2
Productivity Gains*
2
Market Demand
3
Trade Policy Stability
4
Uninterrupted Manufacturers
Interrupted Manufacturers
Some or All Facilities Closed
82% of Respondents
No Facility Closures
18% of Respondents
say their company will recover in less than one year
50%
say their revenue will increase over the next year
83%
say they will be thriving one year from now
78%
say they will be thriving one year from now
41%
say their revenue will increase over the next year
37%
say their company will recover in less than one year
10%
Invest in Supply Chain Technology
Identify Backup Suppliers
Realign Tax Structure
Perform Risk Assessment
Relocate to Another Country
BDO'S TAKE
Success is no longer just about moving products quickly and cheaply. It’s about optimizing every node in the supply chain for greater collective benefit. By investing in technology, manufacturers will be able to leverage their supply chain as a source of value and competitive advantage.
Introduce new aftermarket services
44%
Pivot to
new products
42%
Take on direct-to-consumer sales
30%
Simplify
product suite
25%
STRATEGIES TO ADJUST CUSTOMER OFFERINGS IN NEXT 6 MONTHS
The pandemic is changing the way manufacturers do business and has created new areas for growth. Manufacturers have innovative plans for capitalizing on these emerging opportunities.
Pivot to New Potential
The 2021 BDO Manufacturing CFO Outlook Survey polled 100 manufacturing industry CFOs with revenues ranging from $250 million to $3 billion in September 2020. The survey was conducted by Rabin Research Company, an independent marketing research firm, using Op4G’s panel of executives.
Methodology
ANNUAL REVENUE
Organization Type
Survey Respondents
1
2
3
4
5
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BDO'S TAKE
The industry’s recovery is influenced by external factors beyond their control. Uncertainty can paralyze businesses at a time when greater agility is needed, not less. Manufacturers that can identify near-term strategic wins will be more resilient to the unexpected and better prepared to shift to growth.
BDO'S TAKE
These transformative changes are aimed at diversifying revenue and increasing market share. The potential upside is significant, but manufacturers will need to contend with a new universe of competitors. They’ll also need to manage the marketing, logistics and fulfillment challenges of these shifts.
BDO'S TAKE
Short-term disruptions can have long-term consequences. Interrupted Manufacturers face a longer road to recovery than Uninterrupted Manufacturers, and the disparity may grow wider if lockdown orders are reimplemented. Going forward, manufacturers will focus on increasing agility to be better prepared to respond to disruptions.
This year will be no less challenging, but manufacturers have experience overcoming adversity. Manufacturing CFOs have bold plans for meeting the difficulties ahead while capitalizing on new opportunities.
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