Collaborate and Innovate

for High-Performance
Results

www.mpi-group.com
Manufacturers must collaborate both internally and externally to innovate, by welcoming ideas from across
the enterprise and supply chain. Companies that fail at this critical task will risk not only profits, but survival.

Fortunately, new data from the just-released 3DS Innovation and Collaboration Study1 — conducted by
The MPI Group — highlights how manufacturers are trying (and often failing) to collaborate for accelerated
innovation. The study also explores the best practices and tools that support collaboration — and performances
they impact.

Enterprise-Wide Collaboration
E nterprise-wide collaboration is often limited by
corporate structures that create silos — functional
units whose leaders focus solely on outcomes within
This lack of alignment can cripple collaboration
and impair an organization’s ability to innovate and
grow. And while some functions have information
their control, without consideration of their effect digitally available in real-time, a fifth of companies
on the overall organization. Changing this structure report limited or no access from functions (Figure 1).
and mindset must begin with leadership developing For example, 23% of R&D/Product Development
strategies and goals and championing coordinated functions provide only some access or no access to
technology solutions across the enterprise. real-time information.

Unfortunately, only 50% of companies have developed This lack of alignment and collaboration may be
and deployed strategies to align technologies across driven, in part, by technology limitations. In fact,
functions. Another 34% of companies have strategies only half of companies report excellent technology
developed and partially deployed; 16% have no strategy. characteristics (e.g., ease of use, secure, adaptable)
(Figure 2).

Figure 1. Real-time information digitally obtainable from functions

Leadership 54% 26% 16% 4%
Manufacturing 43% 34% 15% 8%
R&D/Product Development 41% 35% 18% 5%
Customer-Facing 40% 33% 23% 4%
Supply Chain/Procurement 39% 37% 17% 6%
Support Services 39% 35% 21% 5%

Extensive real-time Substantial real-time Some real-time No real-time

information information information information

Figure 2. Technology solution characteristics

Ease of use 50% 42% 8%
Secure 50% 38% 12%
Adaptable 49% 45% 5% 1%
Integrated 49% 37% 14% 1%
Scalable 40% 45% 13% 2%

Excellent Good Fair Poor

1
The 3DS Innovation and Collaboration Study was completed by 155 manufacturing executives in June 2022.

Collaborate and Innovate for High-Performance Results / MPI

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Leadership
C orporate leaders can set the tone for collaboration
by their willingness to engage creatively across
functions via best practices (e.g., coaching, participation
Other Leadership best practices that engage and align
an organization — such as modeling desired behaviors
(31%) and conducting gemba2 walks through functions
in training) and use of digital tools to resolve local (14%) — are not nearly as widespread.
problems before they become enterprise disasters.
Similarly, technology usage to support Leadership
Yet fewer than half of companies report that activities and collaboration varies, with only two
Leadership functions have excellent collaboration technologies commonly used by a majority of
with other functions. And Leadership collaboration Leadership functions:
is just fair, poor, or non-existent at approximately • Customer relationship management (CRM)
15% of companies (Figure 3). (61% regularly use)
Extensive use of Leadership best practices to facilitate • Business analytics (54%)
collaboration and innovation is prevalent at about All other technology solutions included in the study —
half of manufacturers: such as enterprise resource planning (39% regularly
• Strategy deployment (56% widely use) use), product data management (39%), and supply
chain management (36%) — are far less prevalent
• Strategy development (56%) among Leadership functions.
• One-on-one meetings with function leaders (52%)
• Leadership huddles/meetings (50%)
• Participation in training (49%)

Figure 3. Leadership collaboration with other functions

Manufacturing 46% 33% 14% 3% 5%
R&D/Product Development 42% 45% 10% 1% 3%
Customer-Facing 41% 42% 13% 1% 3%
Support Services 39% 45% 11% 1% 3%
Supply Chain/Procurement 35 % 43% 15% 3% 3%

Excellent Good Fair Poor No

collaboration collaboration collaboration collaboration collaboration

Extensive use of Leadership best practices

to facilitate collaboration and innovation
is prevalent at about half of manufacturers.

2
Japanese term that refers to the actual place or the real place (i.e., where work occurs).

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Leadership sets the tone for collaboration throughout increased revenues in the past year (40% increased
an organization, influencing a company’s ability — revenues by more than 10%), and 80% increased
or inability — to innovate and grow its top and profits (34% increased profits by more than 10%).
bottom lines (Figures 4-5): 83% of manufacturers

Figure 4. Revenue increase in past year Figure 5. Profit increase in past year

1% 1%
1% 1% 1%
5% 11% 7% 11%
Increased more than 20%
9% Increased 11–20% 11%
Increased 6–10%
Increased 1–5% 23%
15% 29% No change
Decreased 1–5% 22%
Decreased 6–10%
Decreased 11–20%
28% 24%
Decreased more than 20%

Benefits of Excellent Collaboration — Leadership

Leadership functions with excellent collaboration with all other functions are more likely to regularly use
collaborative best practices and technologies — and enjoy better outcomes:

Excellent collaboration Others

Practices — one-on-one meetings with function leaders 70% 50%

Technologies — supply-chain management 60% 33%
Outcomes — increased profits by more than 10% 70% 29%

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R&D/Product Development
R &D/Product Development can’t function on its
own: new ideas must be analyzed and budgeted
(finance); components must be sourced (procurement
Other practices that connect R&D to the rest of
the organization — such as knowledge management
processes (34% widely used), buyer personas (26%),
and supply chain); and goods must be made (manu- and portfolio value management (23%) — are
facturing), shipped (distribution) and sold (marketing significantly under-used.
and sales). Without collaboration across functions,
R&D performance will suffer — undermining Many technologies to support R&D activities and
revenues and profits. collaboration are also widely ignored. The most
common technologies are:
Yet fewer than half of companies report that their • Business analytics (42% regularly use)
R&D/Product Development function has excellent
• Customer relationship management (42%)
collaboration with any other functions. Collaboration
is just fair, poor, or non-existent with other functions • Quality management system (41%)
for up to 22% of R&D departments (Figure 6). • Enterprise resource planning (40%)

Even worse, wide use of only a few R&D processes All other technology solutions included in the study —
and practices occurs for even half of manufacturers: including product data management (32% widely used),
• Analysis of product data (56% widely use) computer-aided design (32%), and product lifecycle
management (28%) — are regularly used by only a
• Brainstorming (51%)
third or fewer R&D functions.
• Collaboration with customers (48%)

Figure 6. R&D collaboration with other functions

Leadership 44% 42% 12% 3%
Support Services 42% 36% 15% 4% 3%
Customer-Facing 41% 45% 11% 1% 3%
Supply Chain/Procurement 37% 42% 16% 2% 3%
Manufacturing 36 % 44% 14% 3% 4%

Excellent Good Fair Poor No

collaboration collaboration collaboration collaboration collaboration

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R&D/Product Development is measured by how A majority of manufacturers turn more than 20%
efficiently it transforms ideas into marketable goods. of R&D projects into sellable products (Figure 7),
Collaboration by R&D with other functions — and 61% report that more than 10% of annual sales
especially manufacturing, sales, and supply chain — are derived from products introduced in the past year
positively impacts R&D metrics by ensuring that new (Figure 8).
products and services can be cost-effectively sourced,
produced, and sold.

Figure 7. Percentage of R&D projects that Figure 8. Percentage of annual sales from
turn into sellable products products introduced in the past year

6%
10% 11% 5% 14%
Less than 10% Less than 5%
8% 10% to 20% 6–10%
10%
21% to 30% 11–15%
31% to 40% 16–20%
12% 41% to 50% 21–25%
32% 25%
More than 50% 18% 26–30%
More than 30%

26%
21%

Benefits of Excellent Collaboration — R&D/Product Development

R&D/Product Development functions with excellent collaboration with all other functions are more likely
to regularly use collaborative best practices and technologies — and enjoy better outcomes:

Excellent collaboration Others

Practices — analysis of product data 73% 53%

Technologies — product data management 50% 29%
Outcomes — more than 30% of R&D projects turn into
50% 27%
sellable products or services

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Manufacturing
M anufacturing must access and share informa-
tion across the organization — e.g., production
schedules, operations metrics, regulatory records,
Other practices that support continuous improvement
efforts and collaboration — such as lean manufacturing
principles (25% widely use), kaizen events (23%), and
staffing needs, supply criteria — to innovate and PDCA (plan, do, check, act/adjust) problem-solving
improve. Without digital collaboration with other (23%) — are significantly under-used.
functions, Manufacturing productivity can quickly de-
cline — putting quality, profits, and even workplace Even worse, only four technologies that support
safety at risk. collaboration and innovation are commonly deployed
by more than a third of Manufacturing functions:
Yet fewer than half of companies report that their • Business analytics (53% regularly use)
Manufacturing functions have excellent collaboration
• Customer relationship management (43%)
with any of the other functions. Collaboration is just
fair, poor, or non-existent with other functions for • Artificial intelligence (37%)
approximately one-fifth of Manufacturing functions • Project planning and management (40%)
(Figure 9).
All other technology solutions included in the study
Application of improvement principles and best — such as quality management systems
practices typically originates within a company’s (30% regularly use), manufacturing execution systems
Manufacturing unit, but the 3DS Innovation and (26%), and enterprise asset management (25%) —
Collaboration Study found no processes or practices receive much less attention, depriving management
that facilitate collaboration, innovation, and business and frontline associates of tools, data, and insights
success are extensively used by a majority of to improve operations.
Manufacturing functions. The most common
processes and practices are:
• Performance management system (43% widely use)
• Quality certifications (42%)
• Continuous improvement program (40%)

Figure 9. Manufacturing collaboration with other functions

Leadership 48% 34% 14% 4%
Customer-Facing Functions 39% 37% 19% 1% 3%
R&D/Product Development 35% 48% 10% 2% 5%
Supply Chain/Procurement 35% 43% 15% 4% 3%
Support Services 35 % 41% 18% 3% 3%

Excellent Good Fair Poor No

collaboration collaboration collaboration collaboration collaboration

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Manufacturing is dependent on other functions A majority of companies report machine availability
for success, with many key performance indicators of less than 90% (Figure 10), and 38% report
directly related to collaboration: e.g., machine on-time delivery rates of 90% or less (Figure 11).
availability, on-time delivery, and quality yields. For
example, limited collaboration with Supply Chain/
Procurement can leave a production line starved for
materials — unable to make goods and fulfill orders.

Figure 10. Machine availability Figure 11. On-time delivery rate

(percentage of scheduled uptime)

5%
13% 7% 8% 17%
99–100%
12%
5% 96–98%
8%
91–95%
86–90%
13% 81–86% 19%
76–80% 17%
25%
75% or lower

25%
26%

Benefits of Excellent Collaboration — Manufacturing

Manufacturing functions with excellent collaboration with all other functions are more likely to regularly
use collaborative best practices and technologies — and enjoy better outcomes:

Excellent collaboration Others

Practices — visual management boards 53% 32%

Technologies — manufacturing execution systems 53% 23%
Outcomes — on-time delivery of more than 95% 63% 32%

A majority of companies report

machine availability of less than 90% .

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Supply Chain/Procurement
T he Supply Chain/Procurement function is how
manufacturers communicate with and manage
upstream partners. Without digital collaboration
Other practices that could enhance collaboration—
such as sharing company forecasts with primary
suppliers (31% widely use), electronic data interchange
with other functions and suppliers— e.g., product (29%), and sharing intellectual property with primary
specifications, production schedules, sales forecasts, suppliers (25%) — are significantly under-used.
compliance guidelines — supply-chain bottlenecks
are inevitable. Many technologies that offer collaboration within
Supply Chain/Procurement are ignored; the three
Yet fewer than half of companies report that their most common technologies are:
Supply Chain functions have excellent collaboration • Business analytics (45% regularly use)
with any of the other functions. Collaboration is just
• Customer relationship management (45%)
fair, poor, or non-existent with other functions for as
much as 26% of Supply Chain functions (Figure 12). • Supply chain management (39%)

Few areas of manufacturing have been as troubled in Technologies solutions that can improve supply-
recent years as the supply chain; in some industries, chain management — including enterprise resource
volumes of delayed and backordered goods have planning (35% regularly use), transportation manage-
reached all-time highs. That’s not surprising, given ment system (25%), and warehouse management
that the 3DS Innovation and Collaboration Study finds that systems (20%) — are also significantly underused.
collaborative processes or practices are used by only
about a third of Supply Chain functions — at most:
• Continuous improvement program
(34% widely use)
• Waste elimination (34%)
• Collaborative supplier teams (33%)
• Supplier-owned or -managed inventory (33%)

Figure 12. Supply Chain collaboration with other functions

Customer-Facing 46% 33% 15% 3%3%
Leadership 45% 39% 13% 1%3%
Manufacturing 44% 37% 14% 3%3%
Support Services 37% 37% 19% 4% 3%
R&D/Product Development 36% 42% 15% 4% 3%

Excellent Good Fair Poor No

collaboration collaboration collaboration collaboration collaboration

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Collaboration by Supply Chain with other functions 44% of companies report on-time supplier deliveries
and externally ensures that the right materials and of less than 90% (Figure 13), and nearly half of
components are at production when and how they companies report that more than 2% of supplier
should be. Two Supply Chain key performance goods are defective (Figure 14).
indicators illustrate problems in the supply chain:

Figure 13. On-time delivery from primary suppliers Figure 14. Defective supplier goods

3%
6% 12% 6%
99–100% Less than 1%
9%
96–98% 14% 30% 1–2%
91–95% 3–5%
6% 23%
86–90% 6–10%
81–86% 11–15%
76–80% More than 15%
75% or lower
23% 26%
20% 22%

Benefits of Excellent Collaboration — Supply Chain/Procurement

Supply Chain/Procurement functions with excellent collaboration with all other functions are more likely to
regularly use collaborative best practices and technologies — and enjoy better outcomes:

Excellent collaboration Others

Practices — continuous improvement programs 56% 30%

Technologies — enterprise resource planning 52% 33%
Outcomes — supplier on-time delivery of more than 95% 56% 32%

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Customer-Facing Functions
(Sales, Marketing, Customer Support)
C ustomer-Facing functions must have quick
answers to every customer question — e.g.,
delivery dates for products, financing options, labor
Other practices that could enhance collaboration
and add customer value — such as benchmarking
(32% widely used), buyer personas (28%), and an
practices — which requires close collaboration with omnichannel strategy (21%) — are widely used by a
other functions. third or fewer Customer-Facing functions.

Yet the only function a majority of Customer-Facing Customer relationship management (55% regularly
functions have excellent collaboration with is Leader- use) is the technology most common among
ship. Collaboration is just fair, poor, or non-existent Customer-Facing functions, followed by:
with other functions for as much as 25% of Custom- • Business analytics (48% regularly use)
er-Facing functions (Figure 15). • Social media (39%)
All the collaborative processes and practices included • Project planning and management (37%)
in the study for Customer-Facing functions are widely Technology solutions that can help Customer-Facing
used by less than half of manufacturers. The most functions to collaborate and make more informed
common processes and practices are: decisions — including enterprise resource planning
• Sales and marketing alignment (45% widely use) (32% regularly use), artificial intelligence (28%), and
• Customer focus groups (41%) web analytics (20%) — are significantly under-used.
• Performance management system (41%)

Figure 15. Customer-Facing collaboration with other functions

Leadership 52% 34% 10% 3%1%
Support Services 45% 37% 13% 4%2%
Manufacturing 43% 37% 15% 2%2%
R&D/Product Development 41% 41% 12% 3%3%
Supply Chain/Procurement 38% 37% 19% 4%2%

Excellent Good Fair Poor No

collaboration collaboration collaboration collaboration collaboration

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Sales and marketing are the twin faces of a company, Two key performance indicators show opportunities
but they must collaborate with other functions to for improvement among for Customer-Facing
share insights and complaints they receive from functions: 62% of companies report customer
customers — with Leadership, R&D, Manufacturing, retention rates of 90% or less (Figure 16), and
etc. 59% convert 6% or less of website visitors into sales
(Figure 17).

Figure 16. Customer retention rate Figure 17. Website-to-sales conversion rate

4% 4% 10% 6%
5% 100% 17% 8% Less than 1%
91–99% 1–2%
81–90% 3–4%
17% 71–80% 9% 5–6%
28% 18%
61–70% 7–8%
51–60% 9–10%
50% or less 15% More than 10%

32% 27%

Benefits of Excellent Collaboration — Customer-Facing Functions

Customer-Facing functions with excellent collaboration with all other functions are more likely to regularly
use collaborative best practices and technologies — and enjoy better outcomes:

Excellent collaboration Others

Practices — value-stream mapping 63% 29%

Technologies — product data management 63% 30%
Outcomes — customer retention rates of more than 90% 85% 28%

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Support Services
(Finance, HR, Admin)
I f properly aligned with other functions, Support
Services can be powerful allies in enabling a
company to achieve its goals and objectives. Yet fewer
Many technologies that could improve Support
Services and enhance collaboration are ignored.
The most common technologies are:
than half of companies report that their Support • Customer relationship management
Services have excellent collaboration with any of (45% regularly use)
the other functions. Collaboration is just fair, poor,
• Business analytics (45%)
or non-existent with other functions for as much as
25% of Support Services (Figure 18). • Enterprise resource planning (39%)

The 3DS Innovation and Collaboration Study found that Other technologies that can improve key Support
most collaborative processes are extensively used Services — including financial management systems
by less than half of Support Services functions. (34% regularly use) and human resource management
The most common processes and practices are: systems (20%) — are significantly under-used.
• Performance management system
(43% widely use)
• Continuous improvement program (41%)
• Visual management boards (41%)

Other practices that could improve Support Services

— such as waste elimination (32% widely use), 5S
workplace organization (28%), and PDCA problem-
solving (26%) — are significantly under-used.

Figure 18. Support Services collaboration with other functions

Leadership 48% 40% 10% 1%1%
Manufacturing 44% 34% 19% 2%2%
Customer-Facing Functions 44% 38% 13% 3%2%
R&D/Product Development 37% 42% 15% 3%3%
Supply Chain/Procurement 37% 39% 18% 4%3%

Excellent Good Fair Poor No

collaboration collaboration collaboration collaboration collaboration

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It’s impossible for Support Services to “support” HR services: a majority of companies have cash-to-
other functions in the organization without collabo- cash cycles longer than 30 days (Figure 19), and
ration. Two key performance indicators highlight 64% report annual labor turnover of more than 5%
the collaborative performances of finance and (Figure 14).

Figure 19. Cash-to-cash cycle Figure 20. Annual labor turnover rate

4%
6% 3% 5% 12%
17% Less than 20 days Less than 1%
21–30 days 8% 1–5%
15% 31–40 days 6–10%
41–50 days 11–15%
24%
51–60 days 21% 16–20%
More than 60 days 21–25%
30%
More than 25%
28%
27%

Benefits of Excellent Collaboration — Support Services

Support Services with excellent collaboration with all other functions are more likely to regularly use
collaborative best practices and technologies — and enjoy better outcomes:

Excellent collaboration Others

Practices — daily huddles/team meetings 71% 25%

Technologies — human resource management systems 57% 28%
Outcomes — cash-to-cash cycles of less than 30 days 36% 13%

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Keys to Collaboration, Innovation,
and Growth
T he 3DS Innovation and Collaboration Study offers
insights into why manufacturers must better
align their organizations across functions. But how
3. Execute for collaboration and innovation: Establish
cross-functional teams to work within and across
functions. (Only by seeing how other functions
can they get started? work can managers and frontline associates
appreciate their efforts, and how their own
1. Find collaboration weaknesses: Manufacturers need actions may help or hurt other functions.)
to assess how individual functions collaborate Establish SMART (Specific, Measurable, Attainable,
internally and externally, by interviewing or Relevant, Time-bound) goals for projects and
surveying those within a function — and all those detailed actions to improve. Schedule report-out
trying to collaborate with that function. Where events where all functions learn about progress —
gaps/weaknesses exist, identify potential causes or challenges — and share best practices and
(e.g., lack of guidance/leadership, poor processes key learnings.
and/or missing best practices, minimal use
of enabling technologies, training/employee Is your organization ready to become more
development required). collaborative?

2. Prioritize and plan improvement opportunities: Function

leaders should prioritize gaps/weaknesses that
pose serious risks now (e.g., safety, cyber-security,
quality) and resolve them immediately. Other issues
can be addressed with minimal effort/resources
and deliver high returns on investment; schedule
these for near-term projects. Lastly, long-term
improvements with game-changing results typically
require more resources and time; schedule these as
savings from other improvement efforts accumulate.

Schedule report-out events where all functions learn

about progress — or challenges — and share best
practices and key learnings.

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The MPI Group
T he MPI Group (MPI) serves leaders with
research, advice, and performance-targeted solu-
The MPI Group
tions that provide a competitive advantage in today’s
fierce marketplace. MPI combines the disciplines of mpi-group.com
research, strategic advice, knowledge development,
+1 (216) 991-8390
and hands-on leadership to create a difference —
in performance, in profits, and in the people who [email protected]
make them possible.

www.mpi-group.com