Manufacturing Insights Asia/Pacific Releases Annual Top 10 Predictions For The Manufacturing Industry

Achieving Competitive Differentiation Is The Key For Manufacturers To Survive This Economic Downturn

Singapore and Hong Kong, February 11, 2009 – 2009 begun with great uncertainty. The health and future of the global economy is in question and every sector has a tale of woe. With demand for consumer goods dwindling across the globe following the financial meltdown in 2008, manufacturers are not spared. Despite the gloomy outlook, Manufacturing Insights Asia/Pacific, an IDC company, believes that manufacturers can tap into pockets of opportunities to survive, stay ahead of the competition, ride out the storm and be ready for the upswing. These opportunities are discussed in its latest report, "Asia/Pacific (Excluding Japan) Manufacturing 2009 Top 10 Predictions" (Doc # AP 664127Q, January 2009).

"Amid the growing uncertainty, investments in IT and process improvements will come under increasing scrutiny", says Dr. Christopher Holmes, Vice President of Asia/Pacific Manufacturing Insights. "To weather the global financial crisis, manufacturers in this region will need to strike a balance between immediate cost reduction and investments in areas that will allow them to stay competitive."

The following are three out of the 10 key predictions that Manufacturing Insights Asia/Pacific believes will shape the manufacturing industry in Asia/Pacific excluding Japan (APEJ) in 2009.

Companies in the Region Will Renew their Focus on Quality
Tainted milk products, lead-painted toys, defective tires, and the list goes on. The recent high profile recalls of products manufactured within the Asia/Pacific region have cast a cloud over manufacturing standards within the region. As governments seek to protect their citizens, increased legislation for the quality control of products will be introduced. We will see stricter testing standards for products being sold within specific countries. In the coming year, the brand owner will demand that all stages of the supply chain focus on improving the quality of the product. The entire manufacturing process will also be closely reviewed. For example, to manage relationships with their suppliers, manufacturers may invest in supplier relationship management (SRM) systems, which will allow the company to set up and manage scorecards to measure their suppliers' performance against set criteria.

New Plants in the Region Will be Adopting a Digital Manufacturing Strategy
Despite the current economic slowdown, the economies in the Asia/Pacific region are still growing, though at a much slower rate than expected a few months ago. This growth will be translated into demand for more products. Companies that have made the decision to invest in new plants or upgrade their existing plants will be leveraging the latest processes and technologies and incorporating them into their plants to facilitate a digital factory strategy. A digital factory approach simulates the entire production process before the actual production even starts.

Product Life-Cycle Management (PLM) Will be the Next Big Area of Competitive Differentiation in the Asia/Pacific (Excluding Japan) Region
The area of PLM will be the next big area of investment for manufacturing companies in the Asia/Pacific region. The management of the product life-cycle, from creation to disposal, will see increased interest. Efforts will be put into managing the initial technology development to ensure research and development (R&D) leads to value-added deliverables. The product development process, will see greater process control, allowing for predictable product development outcomes and effective resource management. The integration of other company functions into the product development process will also be strengthened. Finally, more attention will be paid to managing the product. Companies will also increasingly look for new revenue opportunities and consider upgrade programs, service programs, and disposal and recycling programs.

Adds Dr. Holmes, "This downturn is a testing ground for manufactures in the region. Only the fittest will survive". To survive, Manufacturing Insights suggests that manufacturers focus on and prioritize investments which will allow them to differentiate themselves from their competitors. In addition, it is imperative that they re-examine their current processes and make improvements accordingly. For ICT vendors, it is crucial to provide additional value to manufacturing clients at this time. They will also need to have expertise within sub-industry verticals. This includes best practices, advice on implementation and suggestions for organizational changes.