The manufacturing and supply chain industry in Asia-Pacific (APAC) has become a key economic driver for the region in recent years. Nearly half of global manufacturing output originates from APAC, reinforcing its role in the global economy.
Within APAC, Southeast Asia has emerged as a major manufacturing hub, supported by the broader China Plus One strategy, which encourages companies to diversify their production across China and Southeast Asian nations. However, despite this rapid growth, the industry faces challenges such as fragmented supply chains, infrastructure gaps, and a shortage of skilled labour, all of which have affected operations across the region’s diverse markets.
To address these challenges, manufacturers are turning to technologies such as AI and machine learning, alongside upskilling initiatives, to build a more resilient workforce.
Keeping up with diverse business challenges using AI and automation
The latest State of Smart Manufacturing report by Rockwell Automation indicates that 83% of manufacturers globally anticipate integrating generative AI into their operations, reflecting the industry’s growing adoption of AI-driven solutions. In Asia, IDC predicts that by 2026, 20% of industrial operations will use AI and machine learning for vision-based systems, robotics, and automation processes to enhance efficiency, reduce downtime, and improve worker safety.
While automation has been present for decades, the manufacturing industry is now at an inflection point with the convergence of AI and more software-driven automation technologies.
Together with the integration of IT and operational technology (OT), AI enables smarter, adaptive solutions across the supply chain. Through real-time data analysis, predictive modelling, and intelligent automation, AI helps manufacturers improve demand forecasting, optimise inventory, and maintain seamless operations. In addition, it can identify and mitigate potential disruptions before they impact operations.
Transforming supply chain resilience with generative AI
The ability of generative AI applications to create new rules based on existing data is a game-changer in supply chain design and management, as it enables automation and end-to-end connectivity.
AI empowers organisations to model various scenarios, identify bottlenecks, and proactively address disruptions. Its dynamic scenario-planning capabilities help businesses anticipate challenges and respond with agility. AI-driven simulations further enhance these capabilities by visualising the effects of external shocks — such as geopolitical events or natural disasters — on supply chains. This enables manufacturers to build redundancy and flexibility into logistics networks, ensuring smoother operations even during crises.
AI-driven solutions can also enhance daily operations by connecting edge and cloud environments, predicting equipment maintenance needs, and optimising production processes. Similarly, digital twin technology can help manufacturers cope with changing demands in a fast-paced environment by creating a more agile design process before cutting steel.
Looking beyond AI as a point solution, businesses should consider its role in the shift towards autonomous manufacturing. Generative AI should be viewed as a value-add to existing workflows. Think about how AI can be integrated into the organisation’s core processes, systems, and how it can impact decision-making. In a nutshell, AI should be used to assist and elevate the work that humans do.
Manufacturers can start by identifying areas where AI delivers the most value — whether in supply chain optimisation, predictive maintenance, or improving worker productivity — and integrating these tools seamlessly into their operations. At the same time, ongoing investment in workforce upskilling is essential to fostering a culture of innovation and adaptability.
AI may have disrupted the industry, but the true transformation lies in businesses’ ability to adapt and evolve.
