Industrial equipment companies are struggling to compete as demand drops, commodity prices rise, labor costs skyrocket and margins tighten. Our research explores how these companies can increase speed to market and free up funds that can be reinvested to develop the innovative, digitally enabled products and services that customers demand.

1. How Industrial Equipment
Companies are Mining
Fuel for Growth

2. 2
Industrial equipment
companies are struggling
to compete as demand
drops, commodity prices
rise, labor costs skyrocket
and margins tighten.
Our research explores
how these companies can
increase speed to market
and free up funds that
can be reinvested to
develop the innovative,
digitally enabled products
and services that
customers demand.
Copyright © 2016 Accenture. All rights reserved.Copyright © 2016 Accenture All rights reserved. 2

3. Copyright © 2016 Accenture All rights reserved. 3
Industrial equipment companies are ‘working lean’
to be more agile and increase competitiveness
are focused on
cost reduction to
improve margins
are focused
on cost
reduction and
innovation to
drive value
strongly agree that
their business
‘identifies and
eliminates
overlapping cost
reduction exercises’
82%
41% 41%

4. Copyright © 2016 Accenture All rights reserved. 44
Optimizing digital opportunities across the entire
value chain is a top priority
A majority say increased
technology would
enable their operating
model to operate at half
it’s base cost
Optimizing digital will help industrial
equipment companies drive process
excellence, gain agility and reduce COGS
Industrial
Equipment
18%
37% 43%
All
Industries
41%
41%
15%
2 – Somewhat
agree
1 – Strongly
agree
4 – Somewhat
disagree
3 – Neither agree
nor disagree
5 – Strongly
disagree
73%
61%
All Industries
Industrial Equipment

5. Copyright © 2016 Accenture All rights reserved. 55
To fuel growth, industrial equipment companies are focusing
on innovation, offering digitally enabled services and
maximizing the Industrial Internet of Things
78% plan to funnel cost
savings into growth and have
enterprise-wide strategies in
place
New products/services and
digital are primary areas for
reinvestment of cost savings
Nearly all industrial equipment companies
(96%) see new business models as a way
to initiate and drive out new capabilities
Analytic insights to make more informed
decisions is cited as one of the top
challenges to funnelling cost savings into
growth
78% 96%

6. Copyright © 2016 Accenture All rights reserved. 66
Four Ways to Fuel Profitable Growth

7. Copyright © 2016 Accenture All rights reserved. 7
1. Rethink the operating model
Pursuing advanced operating models that are digitally enabled will allow
industrial equipment companies to operate more leanly to increase agility
and competitiveness while reducing costs.
Only 31% of respondents strongly believe
that their company’s operating model is
aligned to fuel strategic growth initiatives
and can support these activities across the
enterprise.

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2. Embrace process excellence
Simplifying and optimizing engineering, manufacturing and supply chain
processes across the value chain will drive process excellence, improve
total cost management and increase speed to market.
More than half (55%) cite “increase logistics
effectiveness” as a strategic priority.

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3. Explore new business models
powered by digital
New business models and digitally enabled capabilities allow for more
aggressive growth.
Industrial equipment companies must accelerate time to market from
ideation through incubation, industrialization and offering deployment—
all with the right end-to-end accountability. This can happen through
digitization.

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4. Get everyone on board
To shape an operating model and optimize a value chain that can fuel
growth, industrial equipment leaders must be aligned. Then they should
reconsider the talent required to operate in the future and ensure they
have the right skills on board.
Change management can help executives to gain buy in across all levels
of the organization.
51% say change management is the most
common barrier to advancing the company’s
operating model.