CIOIN

IT departments in the manufacturing vertical are likely to increase their spending to support business applications in 2011, according to an IDC report.

The analyst firm's study Asia/Pacific Manufacturing 2011 Top 10 Predictions indicated that investments in the Asia/Pacific (excluding Japan) or APEJ region are expected to increase from US$22.4 billion in 2010 to US$34.3 billion in 2014 at a compound annual growth rate (CAGR) of 11.3 per cent.

The continuing volatility in the world economy is continuing this year, and CIOs are expected to be responsive to changes, said Dr. Christopher Holmes, director, IDC Manufacturing Insights International.

The issue of rising costs within the region is forcing many companies to rethink their current manufacturing strategies. To cope with the volatile world market, IDC is recommending that manufacturers first determine where the markets are for their products, and seriously consider whether a localised approach to production is a more suitable strategy for 2011 and beyond.

"There will be a trend towards putting in place strategies for top line growth as companies seek to expand geographically, and move into greater value-added activities," said Dr. Holmes.

The supply chain in 2011 will see a new level of collaboration as companies within the supply chain look beyond cost and seek opportunities for cross-organisational process improvements.

The drive for process efficiency will be embraced by companies across the region as rising costs and poor product quality impact their bottom line. Companies in the region will renew their continuous improvement activities with "a new zeal", and they will be seeking to utilise new technologies to reduce waste across all functions and levels within their organisations.

"We are expecting newer technologies to be adopted in the manufacturing segment, with cloud-based applications, tablet PCs and social media all starting to play a role in making the manufacturing enterprise a more efficient one," said Dr. Holmes.