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Smart finance helps manufacturers capitalise on Fourth Industrial Revolution

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World Cement,

In the Fourth Industrial Revolution, manufacturing companies across the globe are using smart finance to improve their competitive positioning. A global qualitative study by Siemens Financial Services (SFS) of Chief Financial Officers (CFOs) in the manufacturing sector shows intelligent financial management is now seen as one of the five key drivers of success by manufacturing companies. The other key drivers are: new-generation technology; increased operational efficiency; raised production capacity and/or flexibility; and more competitive pricing; all of which drives improved competitive positioning in the marketplace.

Manufacturing CFOs, however, face a major financing challenge to upgrade their operations to adopt new-generation manufacturing technologies in order to grasp the benefits of the Fourth Industrial Revolution. As a consequence, intelligent financial management, focused on smart investments to strategically develop the business, has now become a decisive factor for competitive positioning in the global manufacturing sector.

Against this background, smart finance is seen as a key driver for success in Industrie 4.0. Respondents describe the main required attributes of finance for the new-generation manufacturing environment with the following terms: diverse; easy and flexible; expert, appropriate and transparent; and reliable and sustainable. Manufacturing CFOs are therefore already using a wide range of financing techniques over and above traditional sources of finance such as loans. These techniques include asset finance, invoice finance, inventory finance, and private equity. Of these, the most widely used non-loan finance technique is asset finance, employed by 70% of respondents interviewed in the study.

“By enabling their companies to acquire essential new-generation technology, manufacturing CFOs are at the forefront of managing a major shift in the industry,” comments Brian Foster, Head of Industry Finance at Siemens Financial Services in the UK. “Against this backdrop, smart financing techniques have now achieved strategic status for forward-thinking businesses aiming to establish competitive success in increasingly demanding, fast-paced global markets.”

Edited from source by Joseph Green

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