Asia's Manufacturers to Rely on Predictive Analytics to Counter Supply Chain Risk in 2012, says IDC Manufacturing Insights

Kuala Lumpur – November 29, 2011 – Volatility is without a doubt the watchword for the world economy today. With rising costs, coupled with the devastating impact of the recent natural disasters in the region, Asia/Pacific manufacturers are expected to continue their focus on efficiencies, and are putting in greater efforts to mitigate supply chain risks.

This market phenomenon leads IDC Manufacturing Insights to predict that in 2012, there will be greater use of predictive analytics tools among the region's manufacturers. More insights can be found in a forthcoming IDC Manufacturing Insights report, “Asia/Pacific Manufacturing 2012 Top 10 Predictions”, which presents the top 10 predictions for the manufacturing sector in the coming year.

"2011 has been an interesting year, the cautious optimism that we forecast at the beginning of the year morphed into volatility as we reached the end of the year. This looks to continue into 2012, with volatility the watchword for the world economy", says Dr. Christopher Holmes, Head – International, IDC Manufacturing Insights.

"From a technology perspective, we will see companies moving to clearly establish a link between technology and efficiency. These companies will be focused on driving out cost and becoming even more productive with the increased use of analytics and automation. To increase top line growth, they will also be centering their efforts on satisfying domestic demand within the region, and exploiting new business opportunities in the after sales and support market," adds Dr. Holmes.

IDC's Manufacturing Insights top 10 predictions for the manufacturing sector in 2012 are categorized into three areas -- those related to macroeconomic and country trends; those related to manufacturing process trends; and, generic IT trends.

Table 1 presents three of IDC Manufacturing Insights Asia/Pacific's top 10 predictions for 2012, listed in no particular order.

Table 1: Three of IDC Manufacturing Insights Asia/Pacific's top 10 Predictions for 2012 (listed in no particular order)

Prediction	Description
The need for better decisions at strategic and tactical levels will drive the use of predictive analytics	Asia/Pacific manufacturers are expected to continue their efforts to counter supply chain risks in 2012. This market phenomenon leads IDC Manufacturing Insights to predict that in 2012, there will be greater use of predictive analytics tools among the region's manufacturers.
The drive to serve domestic consumption will lead Asia/Pacific Manufactures to rethink their product and supply chain strategies	With countries in the West battling sluggish economies and high unemployment rate, IDC Manufacturing Insights predicts that Asia/Pacific manufacturers will focus on producing goods where there is demand and growth -- the Asia/Pacific region. To do well, manufacturers will need to reconfigure their product development and supply chains to meet local demand. For some companies, this may be an opportunity to embark on vertical integration.
Investments in Business Intelligence (BI) and Analytics (BA) will be used to improve manufacturing processes	BI and BA will be mainly used to support process improvements in supply chain, manufacturing operations and product development.

Source: IDC Manufacturing Insights, 2011

Manufacturers who wish to thrive in 2012 would do well by taking advantage of the opportunities in the region and reconfiguring their product development and supply chains to meet local demand. They should also review the new technologies available to enhance their productivity.

For IT vendors, it is important to note that the region's manufacturing sector is maturing, and companies are now looking to move beyond enterprise resource planning (ERP). In 2012, IDC Manufacturing Insights recommends that IT vendors should have a clear strategy on how they can assist companies to move beyond ERP. IT vendors should also look at how they can help manufacturers to capture, store, analyze and deliver data across different functions to support decision making.

For more information about this report, “Asia/Pacific Manufacturing 2012 Top 10 Predictions” (forthcoming), please contact Juliana Lai at +603-2177-9255 or julianalai@idc.com.