Digitalization on the Horizon

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The manufacturing industry in Asia has been increasing steadily in size and contribution to the global economy. No longer is Asia seen as the low-cost manufacturing haven for multinational companies looking to take advantage of scale and labor cost; the region has been stepping up their innovation and quality to compete in the global market.

Together with the industry’s boom comes the need for factories to optimize their processes and iron out issues that could potentially lead to inefficiencies. Looking at the bigger picture, the requirement for advanced factories is more pressing. In Southeast Asia, for instance, the ASEAN Economic Community—the goal of which is regional economic integration by the end of this year—is expected to present bigger opportunities for manufacturers in the region while at the same time offer challenges in terms of increased competition.

As manufacturers look to the future, they need to examine how advanced information and communication technologies can boost their value creation.

Smarter Manufacturing

In the evolution towards the smart manufacturing paradigm, end-user requirements are set to evolve and become more complex than ever before. Global suppliers find it increasingly difficult to meet the growing needs of the end-users that are further augmented with a very high degree of complexity. But the current scenario will also provide the biggest opportunity to realign one’s existing business approach and forge alliances and partnerships with market participants, according to Frost & Sullivan. The result would be a newly built supplier ecosystem that can effectively address end-user needs for growth in near- and long-term perspectives.

In Germany, this development is called Industry 4.0. Similar initiatives have been launched in other European countries, the United States, China, and elsewhere. Industry 4.0 aims to achieve production-related advantages by creating a networked, flexible, and dynamically self-organizing manufacturing process for highly customizable products.

Over the next 15 to 20 years, it is expected to be accompanied by a paradigm shift that could justifiably be called the fourth industrial revolution. The result will appear to be revolutionary from today’s point of view, but ultimately it will involve a large number of development steps in a process of evolution.

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Editor's Note: This article originally appeared in the December 2015 issue of SMT Magazine.