While the APAC (Asia-Pacific) region remains a global manufacturing powerhouse, relentless challenges are pushing businesses to rethink their supply chain strategies. Manufacturers in the region are under intense financial and operational pressure due to rising costs, fluctuating commodity prices, supply chain constraints and shifting market demands. And while up to 90% of supply chain leaders are reported to have experienced disruptions in 2024, McKinsey found that only 30% believe their boards have a clear grasp of the risks.
To address these increasing challenges and stay competitive in the years to come, APAC companies must move away from traditional information technology (IT) maintenance approaches and adopt more innovative strategies that can improve their supply chain agility and resilience.
Escaping IT budget traps
ERP systems are the heart of logistics, overseeing everything from planning and inventory tracking to procurement, supplier management and much more. But frequent vendor-driven “upgrades” can be like unneeded heart transplants: they can disrupt operations, increase costs and slow down innovation in the long term without improving on what already worked well.
To maintain flexibility and competitiveness, organisations should look at optimising their ERP systems instead of defaulting to expensive upgrades. This can pay off in terms of:
Cost predictability: Manufacturers can avoid disruptive upgrades and help ensure budget stability, which also frees up resources for innovation.
Customisation support: Manufacturing needs vary. What works for one may not work for all, so it’s important to preserve unique workflows without the rigid constraints of new “one- sise-fits-all” ERP upgrades.
Improved business agility: Manufacturers can also add on to their existing ERP systems with next-gen technologies such as AI, automation and real-time tracking more easily, without the need for costly overhauls or disruptions.
To prevent IT from becoming a trap for organisations, IT leaders must optimise ERP instead of locking them into vendor-imposed upgrades that limit flexibility, require constant reimplementation, and be subjected to extended support fees that continue to drive up operating costs and perpetual maintenance of a growing estate of systems that consume the majority of their budget.
Organisations can break free from costly IT cycles if they prioritise:
Business-first, enterprise application second mindset: Technology should align with executive vision and strategy, not just developing business strategies around systems for systems’ sake.
Flexibility and agility: Maintaining control over the IT roadmap means having the freedom to adjust and make changes as business strategies evolve and markets fluctuate.
Stability and ROI of existing ERP: Extending the current ERP lifespan has a myriad of benefits, the least of which are the ability to achieve system stability, preservation of custom workflows, and accelerated innovation by adding features and functions to core systems.
Smart IT savings: Third-party support is a proven strategy taken on by thousands of leaders to reduce maintenance costs while protecting business uptime.
Having the resources to strategically align in innovative solutions such as artificial intelligence (AI), machine learning, automation and next-generation supply chain technologies could greatly help manufacturers de-risk and get ahead of competitors with first-mover advantage.
Future-proofing APAC supply chains with AI
AI is transforming industries, and manufacturing is no exception. Its influence is growing so strongly that up to 40% of manufacturers in the APAC region, excluding Japan (APeJ), are expected to rely on
GenAI for product quality management and cost reduction by 2028. Many of these manufacturers are already prioritising AI and automation to improve supply chain efficiency and perfect order (PO) rates. In fact, by 2027, more than 30% of Asia-based Top 2000 (A2000) manufacturers are expected to invest in advanced planning and scheduling systems in response to challenges and AI advancements, which can increase PO rates to over 95%.
Recognising that not every manufacturer will have an easy transition, initiatives such as A*STAR’s AI Centre of Excellence in Singapore are stepping in to bridge the AI manufacturing gap. These efforts are key to delivering scalable, tailored solutions for the region’s logistics and supply chains.
Shifting IT spend from maintenance to innovation—especially AI— can help APAC manufacturers improve supply chain transparency, increase real-time communication and invest in much-needed new solutions. By avoiding vendor-imposed upgrades and extending the life of existing ERP systems, manufacturers can free up significant funds that can be directly reinvested in transformative AI initiatives. To make this happen, they need to approach IT in supply chain not as a cost centre, but as a driver of business growth.
As global disruptions continue and competitive pressures mount, now is the time for organisations to rethink their IT and business priorities, optimise existing systems and invest in the future of intelligent, agile supply chains.
