Southeast Asia’s manufacturing hub: the cloud’s role

The manufacturing industry is widely regarded as a pivotal sector underpinning Asia’s economy. Over the past two decades, the region has evolved from a fledgling player in the global manufacturing landscape to an established international manufacturing hub. India, for instance, has recently made headlines as the production hub for the latest iPhones, with Apple diversifying its supply chain to increase assembly in this key growth market.

The rapid adoption of digital technologies in the region is a key factor in its rising prominence as a manufacturing hub. The health of the Southeast Asian (SEA) region’s manufacturing sector seems to be improving, even amid a global downturn. However, maintaining this momentum will be challenging. As the region becomes increasingly relied upon as a higher-value production hub, SEA manufacturers are likely to see production capacity increase, while margins for error shrink. For instance, the semiconductor industry, which demands highly precise control equipment, often measures tolerances in nanometers, highlighting the minimal margin for error.

Consequently, SEA manufacturers are increasingly turning to the cloud as a means to access advanced technologies like AI, which can transform their production processes. While markets like Singapore may be ahead in cloud adoption, others, including Malaysia, Thailand, and the Philippines, remain further behind. The surge in data centre investments in these markets represents a critical juncture for SEA’s manufacturers.

Revolutionising manufacturing 

Over the past few years, the manufacturing industry in the Asia-Pacific region has experienced a significant transformation, driven by technological advancements, shifting consumer demands, and changes in the global economy. The emergence of e-commerce, for example, has significantly reshaped supply chain management. The growing trend of customised products and the demand for rapid delivery are compelling traditional manufacturers to adopt more agile and flexible manufacturing processes to keep up with this increased demand.

The cloud is crucial, serving as a repository for extensive data and enabling efficient analysis and utilisation required by Manufacturing 4.0 applications. Manufacturing 4.0, or Industry 4.0, signifies a major shift in product design, production, and delivery, integrating digital technologies, automation, and data exchange to foster a more interconnected manufacturing process. This translates to faster, more secure, cost-effective, transparent, and scalable cloud solutions, capable of managing the rapidly expanding data repositories and providing manufacturers with seamless access to resources as needed. For cloud storage providers, recognising and addressing these needs is not only strategic but essential, equipping them with suitable cloud storage solutions.

This shift has enabled the integration of Industry 4.0 technologies – including advanced robotics, 3D printing, and real-time digital factory simulation – helping SEA manufacturers climb the global value chain. Moving from labour-intensive assembly to producing higher value goods like machinery and electronics, these technologies also support real-time data collection and analysis, offering insights into demand forecasting, quality control, and equipment health. This proactive approach aids in preventing prolonged, costly downtime due to machine faults or defects.

With these technological advances comes an increased generation of data in the industry. The proliferation of IoT devices and connected machinery means manufacturers are constantly collecting and processing data at every step. Therefore, real-time data access and rapid data processing are crucial. Delays in data retrieval can impede decision-making, disrupt production schedules, and impact the overall operational ecosystem, leading to an even greater reliance on the cloud for data access and transfer. However, these advancements also imply a growing need for storage solutions that can scale with their expanding data requirements.

Navigating challenges

While Singapore stands as a trailblazer in advanced manufacturing, many organisations in the region are still anchored to legacy on-premises systems. The reality is that most organisations still struggle to take early steps towards the cloud despite awareness or leadership support. Key barriers to adopting smart manufacturing in APAC include employee resistance to technology change and a lack of skills for managing smart manufacturing implementations. Additionally, integrating new technologies into existing systems seamlessly, without causing disruptions or downtime, is a complex task, often compounded by compatibility issues between new and old systems, leading to operational inefficiencies.

Given the dynamic nature of the manufacturing sector, which demands rapid implementation of infrastructure changes, the cloud is a vital facilitator. However, careful planning is essential for long-term success. As plans to increase cloud spending in the coming years gain momentum, hyperscalers are now focusing on emerging markets to bridge the technological divide. Yet, manufacturers are still grappling with storage issues, specifically regarding the costs of high-speed, low-latency storage solutions. The movement of vast amounts of data to streamline operations involves costs from hyperscale clouds, which may result in manufacturers exceeding their cloud storage budgets.

Moreover, the reliability of cloud storage presents a major obstacle. A recent survey revealed that the manufacturing industry remains the most targeted in the APAC region, with 48% experiencing a data breach in 2022. Due to their extremely low tolerance for downtime, cybercriminals have increasingly targeted manufacturing more than any other industry for extortion attempts.

The future of manufacturing 

Indeed, manufacturers have faced challenges with their cloud storage deployments, including infrastructure compatibility issues, operational agility, and concerns about data loss. It is vital for them to prioritise cloud providers that simplify operations and add an extra layer of agility. This involves adopting a standard central infrastructure that not only ensures robust data security but also allows seamless scalability to suit their needs. While many have adopted the right strategy with hybrid storage – offering increased flexibility by enabling the seamless transfer of workloads between public and private infrastructures – it is crucial that other fundamental needs are met to fully optimise the cloud.

Key considerations for manufacturers include selecting cloud providers that offer transparent pricing, especially those that eliminate additional fees for egress or API operations, to ensure a straightforward and predictable budgeting process. Moreover, it is crucial to integrate robust security and backup features, such as data immutability, to safeguard against data loss and allow for swift deployment of backups in the event of ransomware attacks or accidental modifications. These considerations are essential for long-term success in the manufacturing sector.

Clearly then, the future for manufacturers clearly lies in the cloud. Clearer still, the right cloud strategy could make or break their momentum: they risk falling behind without a solid foundation for scaling manufacturing capabilities long-term, or, by maturing prudently in their cloud journey, they could lead in advancing Asia as a high-value production hub.