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Friday, March 24th, 2017

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Manufacturers are gearing up for growth in 2017

What’s in store for Southeast Asian (SEA) manufacturers in 2017? Recent figures released by the Asian Development Bank (ADB) show a very optimistic trend from SEA economies, with GDP growth forecast to continue well into 2017. An increase in foreign capital investment in Thailand, Vietnam and Indonesia is transforming traditional manufacturing industries into high-tech electronics and aviation manufacturing–bringing new skills, higher wages, and more revenue for SEA manufacturers.

It’s an exciting time with manufacturers gearing up for growth, investing in equipment, new manufacturing modalities such as 3D printing, and software to support digital transformation and new collaborative, connected factory floor competencies.

Expect the cloud, the Internet of Things (IoT), and analytics to be key areas of technology investment for manufacturers. While these were topics of conversation and exploration in 2016, manufacturers will move past the design and concept stage to full-on production execution, and deployment of these technologies in 2017.

Cloud is quickly becoming table stakes. Now is the time for manufacturers to put a cloud readiness plan into action. The cloud is quickly leveling the playing field, enabling even smaller manufacturers to leapfrog older, more established manufacturing players.

Aside from bringing about improvements in responsiveness, agility and costs, the cloud is helping businesses transform. As manufacturers shift away from traditional on premises systems to cloud-based ERP they are taking advantage of new capabilities to transform their business and optimise processes. What’s more, it’s enabling the surfacing of information from even the most far-flung and darkest recesses of the organisation and transforming this data into insights necessary to run and drive their business.

The IoT imperative–start small, start today

The application of Big Data and the IoT continues to offer growth opportunities as insights gleaned from various internet-connected devices enable even more targeted customer engagement and business revenue channels as well as the ability to support operational efficiencies. The McKinsey Global Institute says that despite the immense potential factories have for value creation in the IoT era, an estimated 70 per cent of data captured in manufacturing goes unused.

While most manufacturers recognise the promise of the IoT, many—especially small and midmarket manufacturers—have taken a “wait and see” approach because IoT initiatives can seem daunting. They don’t have to be. You don’t need to boil the ocean-there’s likely processes that can be IoT and/or cloud enabled that represent low-hanging fruit in your manufacturing organisation.

According to PriceWaterhouseCoopers, 55% of businesses will see ROI from the IoT in two years or less. This means manufacturers who have begun to put the IoT to work may already be starting to gain traction with these initiatives. To this end, it’s important to get moving with understanding how and where the IoT can aid your business.

Retool your business for the next-gen workforce

Much has been written about the so-called “Great Shift Change,” as Baby Boomers head toward retirement and Millennials continue to enter the workforce in droves. By 2020, 64% of the Southeast Asian population will still be under 40 years old, and will form the bulk of the region’s workforce in the next decade. SEA’s highly educated and digital-savvy millennials present great potential for the manufacturing industry. To this end, devising strategies to attract and retain Millennial talent will be quintessential for business growth—especially given that their digital awareness can give businesses a big leg up in the new age of smart manufacturing.

Manufacturers must re-think their relationship with these digitally-literate workers and retool their organisations to embrace technology to motivate and empower this next-generation workforce. Sitting at the intersection of workers and systems to unite information and execution, technology plays a vital role in reducing complexity, improving the quality of work life, and enhancing productivity. Business systems that are intuitive and accessible can assist Millennials wanting to have an immediate impact in the workplace.

Millennials want to invest their time and energy in innovative organisations, and in positions where they can make a difference; they have little patience for waiting on month-end reporting to see if their contributions have moved the mark. They want real-time feedback which can be delivered via wearables/mobile, cloud, analytics and other enabling technologies.

Seizing the day with strategic technology investments

This year is shaping up to be the best start for manufacturers in the past decade-it’s time for smart strategic moves to make the most of it. Focused investments in the cloud, the IoT and analytics will enable manufacturers to seize opportunities today, and also be prepared to embrace change and whatever the future brings.

Frank McLoughlin is Vice President – Business Solutions Group at Epicor International