idc mi- manufacturing insights

Asia Pacific Manufacturing Trends for 2012: Managing Complexity, Removing Complication

© IDC Manufacturing Insights

IDC Manufacturing Insights

IDC Manufacturing Insights, provides

– fact based research

– benchmarks,

– best practices, and

– business cases

for using information technology to improve manufacturing processes

www.idc-mi.com

Business Process

The Dynamic Enterprise

Information Technology

‘Harvesting value from IT by creating business efficiencies’

Business Process


Trends in ASEAN

Manufacturing

Managing Complexity, Removing

Complication

Overview


Economy Global GDP growth will track EIU forecasts; weakening growth in mature economies, more robust in emerging markets

Stimulus No major government intervention – austerity in mature economies; double-dip recession would be wild card and is more likely than 3 months ago

Geopolitics No major escalation in Middle East to additional countries

Oil Prices General range around $100-$130, occasional spikes; pressure on consumer confidence and spending is headwind through 2011-2012

Inflation Still under control but accelerating pressures in emerging markets

Stocks Will cycle up and down based on economic news

Other Dollar fluctuates, unemployment continues to fall slowly, consumer confidence remains fragile

Assumptions for 2011 and 2012

4


Asia today…

Volatile, but with strong

forecast growth

Diverse Region

Costs increasing

Moving up the value

chain

Shift to domestic

consumption

Housing Bubbles?


Increased volatility & uncertainty

Shorter forecast horizons

Costs Increasing


TRENDS IN ASEAN MANUFACTURING

Cost, cost, cost


ASEAN Manufacturing Business Drivers (Top 1 Ranked)

0% 20% 40% 60%

Increase Capacity (New facility / Outsourcing)

Grow Revenue from Existing Customers

Geographic Expansion

Introduce New Products and Services faster

Increase Revenue / Market Share / Attract New Customers

Improve Productivity & Efficiency

Reduce Cost of Operations

2010

2011

N=82, 2011 N=155, 2010 Source: IDC Mfg Insights, Biz and It Priorities Survey, April 2011


Top 1 Ranked Business Driver by Country (Discrete and Process)

ANZ 30%

Korea 22.9%

China 38.8%

ASEAN

50%

India 24.4%

Reduce Cost of Operations

Increase revenue / market share / attract

new Customers

N=ANZ=58, India=117, ASEAN=81 Greater China=120 South Korea=70 Source: IDC Mfg Insights, Biz and It Priorities Survey, April 2011


Operational Initiatives to Reduce Manufacturing and Supply Chain Costs

Rank

Engineering

Technology Brand Asset

1 Product

Rationalization

Low-cost Country

Sourcing

Lean

Manufacturing

Lean

Manufacturing

2 Low-cost

Country Sourcing

Lean

Manufacturing

Low-cost Country

Sourcing

Factory Automation

3 Shipment

Consolidation

Product

Rationalization

Product

Rationalization Outsourcing

N=121, 2011 Source: IDC Mfg Insights, Biz and It Priorities Survey, April 2011

What are the key Focus Area to Reduce Manufacturing and Supply Chain Costs?


Getting Cleverer at “Cost Reduction”

Design for X Supplier Leverage Integrated Decisions

Design for manufacturing

Design for assembly

Design for supply chain

Streamlining Intersections

Supplier integration into NPI teams

Retrospective

Perspective

Predictive


Business Process

Build

Supply Chain Internal Ops Sustain Retire

Plan

Design

ERP Engg Apps (CAD)

CRM SRM

Advanced Analytics

Warranty Mgmt. DFx

PLM

SCM

MES CAE

Need for an Integrated Decision Framework

Integrated Decision Framework


Maturing of Manufacturing

0% 20% 40% 60% 80%

Improve Customer/Demand Chain Management

Improve Supply Chain Management

Improve Product Lifecycle Management

Improve Manufacturing Operations

2010

2011

ASEAN Manufacturing Strategic Objectives (Top 1 Ranked)

N=82, 2011 N=155, 2010 Source: IDC Mfg Insights, Biz and It Priorities Survey, April 2011


MANAGING COMPLEXITY, REMOVING COMPLICATION

Lean Innovation


Managing Complexity

Cross functional integration

Paperless

Visual decision making

Decision support

3D Design

Simulation

Design reuse

Product Data Management

Lean Product Development

Increasing Complexity Managing Complexity,

Driving out Complication

Increasing compliance

Software integration

Additive manufacturing

Increased product variation

Reduced product lifecycles

Design for product lifecycle

Global Design & Mfg

Supplier Mgmt

Cross Functional Integration


Lean Innovators are Effective and Efficient

Market chasers Lean innovators

Laggards Cost Chasers

High

High

Low

Low

Effectiveness • Market Timing • Product Cost • Customer Acceptance • Tooling Optimization • Regulatory Compliance

Efficiency • Standard Tools • Process consistency • Better data/better decisions • Higher resource utilization


Becoming a “Lean Innovator”

Lean innovation

Greater collaboration

with suppliers

Open innovation

Use existing knowledge

assets

Standard Processes

Social Business

Tools

Outsource design and

development

Process Visibility

Voice of the customer


SUMMARY


VISTA ECONOMIES: The Next Opportunity


Getting it „right‟ at the front end

Get “Cleverer” at cost

reduction

Integrated Decision

Framework

Manage Increased

Complexity


Questions

Chris Holmes

Head, International

IDC Manufacturing Insights

[email protected]

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