Powered by its strategic geographic location, rich natural resources and skilled workforce, manufacturing in ASEAN has enjoyed profitability and resilience. In fact, the region’s manufacturing sector is set to grow and unlock significant value by 2030.
More recently, digital transformation has accelerated production and the ability to serve current and new markets. Thanks to physical automation, cloud computing and robotics, organisations are able to scale more quickly. Many Chinese manufacturers are investing in Malaysia and Indonesia, further improving the prospects there.
Globally, GenAI emerged as a disruptor in 2024, enhancing industry-specific processes, data, and ways of working. Manufacturers are already looking to integrate innovations in their factories to boost productivity and revenue. In the ASEAN region, the GenAI ecosystem is growing, particularly in Singapore and Vietnam, but there is scope to expand and develop solutions tailored to the manufacturing sector’s unique needs.
Coupled with the Internet of Things (IoT), advanced analytics, and process automation, the global manufacturing industry looks well-placed to ride the wave of innovation – but how can manufacturers in the region scale new heights of quality and performance in 2025?
A global opportunity for ASEAN manufacturing
As the global supply chain shifts, manufacturers are vying to limit risk and reduce their dependence on a single supply chain source. The phenomenon, named "China+1", has seen Southeast Asia emerge as a viable alternative to China’s manufacturing powerhouse, and a growing manufacturing hub. Vietnam is driving ASEAN manufacturing as exports surge from $320 billion in 2019 to $440 billion in 2023, with growing markets in Europe, Mainland China, and the US.
The opportunity exists – but without the right technology, manufacturers could struggle to reach newer markets and navigate complexities along the way. This includes growing pressure to shift to service-based business models, hyper-customisation, and time-to-market for new offerings.
A key trend in 2025 is that the Fifth Industrial Revolution is expected to pivot towards more intelligent technology, to empower human employees to achieve their full potential. Consequently, ASEAN manufacturers will need to accept that AI can solve some of their biggest challenges and accelerate an ever-expanding global opportunity, instead of viewing it as an inexpensive alternative for low-value tasks.
AI and emerging technologies to unlock growth
There is no doubt that AI has enormous potential to boost labour productivity. Where (human) employees offer adaptability, creativity, and problem-solving abilities, AI models and robotics deliver speed and precision in task handling. With the right AI solutions in place, human decision-makers can use real-time data analytics and AI-derived insights to empower their decisions. This can help predict and mitigate supply chain shocks.
The cloud is another critical technology enabler, removing the need for manufacturers and distributors to invest in capital-intensive hardware. Cloud-based, digitally enabled solutions are the foundation for a robust global manufacturing supply chain. But organisations must be able to work with a wide range of systems such as enterprise resource planning (ERP) software, transportation management solutions (TMS), warehouse management solutions (WMS), and supply chain planning solutions (SCP), for it to be successful.
They will also need to invest in manufacturing solutions that resonate with customers and business prospects. This includes investing in industry vertical capabilities to match the needs of manufacturers, whether machinery and equipment, electronics contract manufacturers, or fabricators of metal or plastic products.
The way forward
Even though many ASEAN manufacturers believe themselves to be intelligent, hyper-connected, and data-centric leaders, they are not truly reimagining operations to address unique industry challenges – including improving efficiency, reducing costs and anticipating future trends.
Minimising information latency is also crucial for creating true end-to-end visibility so stakeholders can make optimal decisions in real-time, based on trusted data that can be accessed, updated, and analysed as products move from order to manufacturer, to shipment, to warehouse, to distribution centre or shelves, to customers.
Most importantly, the infrastructure must be scalable and flexible by design, allowing factories and distribution centres to adapt as circumstances demand. Enabling GenAI algorithms, agility, and responsiveness to run through the entire system can help smooth crucial operations through simple task management and scheduling.
Those ASEAN manufacturers that have already embraced the transformation challenge are on the growth path. For those late to the party, the time is now and the reason for change could not be more compelling.