Report: Need better customer retention will drive manufacturers' IT investments this year

Manufacturers in the Asia/Pacific (excluding Japan) or APEJ region are expected to increase their spending on technology to support critical business applications in 2010, according to a report by IDC Manufacturing Insights.

Entitled Asia Pacific Manufacturing 2010 Top 10 Predictions, the report discusses top 10 predictions for manufacturers in the APEJ region for 2010.

In line with these short- to medium-term priorities, the APEJ manufacturing IT investment is projected to increase from $21.6 billion in 2009 to $31.4 billion in 2013 at a compound annual growth rate (CAGR) of 9.9%.

"This year, investments in the manufacturing sector will vary across value chains and countries,” says Dr Christopher Holmes, the company’s VP.

“For developing countries, we will see a greater focus on automation, both in the factory and in the business as companies seek to gain control of their operations.”

“In more advanced organizations, focus will be on visibility and control, such as demand management and product development, across their business processes."

Holmes adds, "Manufacturers in the region will also start to adopt newer technologies such as Web 2.0 and social networking strategies as a means to gain insight into customers' preferences.”

“We will also see a greater emphasis by IT vendors and governments to support small businesses through the deployment of shared service models.”

“Such models allow smaller companies to use technologies in a cost-effective manner."

Highlights of the report include:

• The economic slowdown exposed weaknesses in many companies' processes.

This has ignited manufacturers' growing interest in demand management applications.

In 2010, manufacturers will be seeking to capture information at the point of sale/point of consumption and passing that back through the manufacturing operations and into the supply chain.

• Unlike previous years where the focus was on innovation, manufacturers will push for efficiency improvements in the product development process this year.

As domestic demand picks up, the need to ‘localize’ products will be a key differentiator in 2010.

IDC Manufacturing Insights expect a strong pick-up in product life-cycle management (PLM) applications investments, coupled with an increase in the adoption of computer-aided engineering tools.

• 2010 will be a year of compliance.

Customer expectations are increasing, and the penalties for non-compliance are severe.

Companies will need to take responsibility and implement policies, measures, and systems to ensure that they can track the pedigree of the product all the way through the supply chain, including the consumables used in the manufacturing process.