The EY 1Q21 Advanced Manufacturing Quarterly (pdf) analyzes the top five market forces and company responses discussed by leaders of 31 advanced manufacturing (AM) sector companies (including those from the aerospace and defense (A&D), industrial products (IP) and chemical subsectors) during public earnings calls with analysts in April and May 2021.
Starting this quarter, we have separated the top 10 themes into “market forces” and “company responses” to distinguish change drivers from strategic initiatives. A market force is a trigger event or driver of change that includes political, economic, competitive, social, technological, legal and environmental factors. A company response is a company action or strategy in response to the market forces that can help achieve the next level of growth and mitigate risks. This edition tracks movement of the top five market forces and company responses from quarter to quarter to provide a perspective on shifts in the AM landscape.
Themes that stood out:
Sustainability has emerged as a major market force, rising on the corporate agenda over the past few quarters. Companies are making sustainability a core part of their business strategy as they recognize the opportunity for tremendous value creation via sustainable offerings and supply chains. These include new service-driven revenue streams, creating markets for new products and gaining customer trust by becoming a responsible enterprise.
Product design and innovation:
Companies are realizing that the time to innovate is now and are resorting to digital measures to safeguard business continuity and develop resilient business models that will allow them to sustain growth in the “new normal” environment. Hence, to become a future-ready connected enterprise, companies are undertaking multimillion-dollar digital investments, increasing share of high-margin digital offerings and connecting their installed base to create differentiated solutions.
The top five market forces and company responses, each emerging from the 1Q21 earning calls, are listed in the charts below. Themes are separated into market forces and company responses, delving deeper to identify sub-themes for each category. We have also added the prevailing sentiments and evolution of themes every quarter over the prior year.