Asia Pacific Manufacturing

Trends for 2012:

Managing Complexity, Removing Complication

IDC Manufacturing Insights Page 2
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
IDC Manufacturing Insights Page 3
Trends in
ASEAN
Manufacturing
Managing
Complexity,
Removing
Complication

Overview
IDC Manufacturing Insights Page 4
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
IDC Manufacturing Insights Page 5
Asia today
Volatile, but
with strong
forecast
growth
Diverse
Region
Costs
increasing
Moving up
the value
chain
Shift to
domestic
consumption
Housing
Bubbles?
IDC Manufacturing Insights Page 6
Increased
volatility &
uncertainty
Shorter
forecast
horizons
Costs
Increasing
IDC Manufacturing Insights Page 7
TRENDS IN ASEAN
MANUFACTURING
Cost, cost, cost
IDC Manufacturing Insights Page 8
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

IDC Manufacturing Insights Page 9
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
IDC Manufacturing Insights Page 10
IDC Manufacturing Insights Page 11
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?
IDC Manufacturing Insights Page 12
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
IDC Manufacturing Insights Page 13
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
IDC Manufacturing Insights Page 14
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

IDC Manufacturing Insights Page 15
MANAGING COMPLEXITY,
REMOVING COMPLICATION
Lean Innovation
IDC Manufacturing Insights Page 16
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

IDC Manufacturing Insights Page 17
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
IDC Manufacturing Insights Page 18
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
IDC Manufacturing Insights Page 19
SUMMARY
IDC Manufacturing Insights Page 20

VISTA ECONOMIES: The Next
Opportunity

IDC Manufacturing Insights Page 21
Getting it right at the front end

Get Cleverer
at cost
reduction
Integrated
Decision
Framework
Manage
Increased
Complexity
IDC Manufacturing Insights Page 22
Questions
Chris Holmes
Head, International
IDC Manufacturing Insights
cholmes@idc.com


Join me & your peers in the conversations in our
IDC Manufacturing Insights Community