February 1, 2008
Manufacturing Insights Asia / Pacific, an IDC company, provides the top three (3) Manufacturing Insights predictions for the supply chain in the Asia-Pacific (excluding Japan) region in 2008are as follows:
1) Asia is still the factory of the world, especially China, but there will be a shift in focus in the make up of that factory. More and more companies will either set up manufacturing plants, or look for outsourcing partners in Vietnam and India driven by the cost and market perspective. India has long been seen as the business process outsourcing center. However, it is expected that local manufacturing activities and manufacturing services, such as design and engineering, will grow in 2008. Vietnam will emerge as the new low cost manufacturing center.
2) Enterprise resource planning (ERP) becomes a standard within the manufacturing companies. Successful implementation of ERP is no longer a differentiator among companies. Companies now distinguish themselves through their IT strategies and deployment by using applications that enable management to connect outside the organization. This can be seen as either looking backwards into the supply chain, or forward facing to the connection with customers. Manufacturing companies in Asia will increasingly improve their outward connections in order to differentiate themselves from their competitors.
3) Manufacturing companies looking for continuous rapid growth and expansion will move up the value chain and focus on the increasing value-adding activities. This move into research, development and engineering capabilities will be driven by three key factors. Firstly, outsourcing knowledge work will grow, especially to India, where western companies will seek to leverage the well-trained and cost efficient capabilities offered. Secondly, we will see contract manufacturers, who are under cost and price pressures, looking to grow through their own product development activities and leveraging the skills they have been acquiring whilst serving their existing customers. Thirdly, this growth will be supported at the government level, where national funding and manpower development schemes will encourage companies to move up the value chain.
Source: Manufacturing Insights