Emerging technological trends impacting machinery industry
Thailand is at the heart of one of the world’s major manufacturing zones, with ASEAN accounting for 5% of global manufacturing in terms of value-added. As a regional trade hub with a well-diversified economy, Thailand’s manufacturing sector remains a core industry for the country, and its machinery industry plays a crucial supporting role in driving growth in manufacturing and in the overall economy.
Thailand’s machinery and parts manufacturing industry has seen substantial growth in recent years. According to Thailand’s Department of Industrial Works, Ministry of Industry, in 2016 there were 4,458 factories in Thailand producing machinery and parts and almost 250,000 workers in the industry. Exports of machinery and parts rose 15.2% annually between 2010-2016.
Technology Trends in Manufacturing
Worldwide, the manufacturing industry is being transformed by innovation and technological advancements. The designs, systems, and processes of modern factories around the world are undergoing rapid changes, and machinery manufacturers, especially in Thailand, need to embrace these changes in order to stay competitive. Doing so will help them improve productivity in their operations, and provide their customers, who may be implementing their own innovations, with a competitive edge.
The “data-driven factory of the future”, in which all internal and external activities in the production facility are connected in real-time on the same, easily accessible platform, is well on its way to becoming a reality. This concept is being driven by four technology trends:
Internet of Things (IoT): While the IoT has received media attention for its use in the home (connected refrigerators, lights, etc), the real value of this breakthrough technology will be in factories. Utilizing the power of the Internet to connect assembly and manufacturing machines, office computers and devices, and essential stakeholders (executives, operators, suppliers, and customers), IoT can provide real-time data that will increase production, labor utilization, and output efficiencies. Manufacturers preparing to invest in IoT technology will need to evaluate and select essential data streams, train workers capable of operating this next-generation equipment, and hire specialists who can analyze and evaluate the “big data” and the output from the factory floor. Companies like Toyota Tsusho Electronics (Thailand) have already begun using IoT, such as Amazon Web Services (AWS), to analyze data for the company’s 50,000 trucks and 10,000 taxis in the country. Meanwhile, state-run energy giant, PTT, has invested heavily in the IoT and digitization in order to increase production efficiencies and reduce costs.
- A strong business climate: Thailand is ranked 46th in the world (2017) and 5th in East Asia for ease of doing business;
- Cluster development that allows for greater proximity and efficiency between suppliers and manufacturers;
- Access to markets: Thailand’s geographical location and strong infrastructure make it a transportation hub for the region;
- Institutional Support: Thailand’s Board of Investment (BOI) offers a range of attractive incentives to projects in machine manufacturing. There are also a number of associations and industrial organizations that support the machinery and parts manufacturing industry, including the Thai-German Institute (TGI), Machinery Intelligence Unit (MIU), and the Thai Tool and Die Industry Association (TDIA).
As the manufacturing sector continues to grow and drive the Thai economy, the country is poised to become a machinery and parts manufacturing hub for the region. But there are still substantial investment opportunities for new and existing players in the industry. With growing domestic demand, especially in the automotive, electronics and electrical appliances, food processing, and construction industries, machinery and parts manufacturers are in a unique position to support further growth and expansion. And by adopting and investing in new and emerging technologies like IoT, robotics and automation, 3D printing, and augmented reality, machinery and parts manufacturers in Thailand can support the Thailand 4.0 policy, and create significant added value for the country’s manufacturing industries.