© marcin kempski Analysis | February 18, 2015

CEE manufacturers must turn to IT to remain competitive

Having accommodated strict quality standards, but losing the pricing battle, manufacturers in the CEE region will have to focus on efficiency as their greatest competitive weapon.
This will require business transformation and employment of new IT strategies and tools, including 3rd-Platform technologies, including mobility, big data, social business, and the cloud, to efficiently support all process areas. Success in this transformation will act as a differentiator between market leaders capable of competing at the global level and market followers that will be constantly threatened by counterparts in low-cost countries.

According to IDC Manufacturing Insights, CEE manufacturers will have to look to IT for new efficiencies and competitive advantages. New technologies will play a transformative role, both as a platform for the execution of new efficiencies and as an enabler of innovation. This means that manufacturers must continue using traditional process optimization methods, quality management, and cost reduction schemes, while also investing in automation, systems integration, cross-functional collaboration platforms, and environments that facilitate faster decision making across all organizational structures.

Benchmarks of IT adoption in CEE compared with developed manufacturing markets indicate that CEE manufacturers demonstrate severe shortcomings in many areas of IT tools usage and overall IT strategies and governance. Business processes that have appropriate IT support or are fully automated will make the difference in overall efficiency, while boosting quality and helping lower operating expenses. One big challenge will be to transform and integrate IT environments that are characterized by numerous disparate applications, ancient on-premises infrastructure, and, in some cases, a high proportion of home-grown applications with limited possibilities for future development.

"The business needs of CEE manufacturers are no different from those of their Western European counterparts," explains Lead Research Analyst Martin Kuban with IDC Manufacturing Insights, CEMA. "Therefore, they should follow working examples and best practices that apply throughout the sector. They should leverage the experience that Western European manufacturers' have gained using IT to transform to efficient and customer-oriented organizations."

What will the future hold for CEE manufacturing, a sector strongly developed around foreign direct investment (FDI) and populated by companies with tight connections to parent entities or groups? Given the ongoing manufacturing renaissance in developed markets, the CEE region will have to fight to defend its position as a manufacturing powerhouse. Western European manufacturers are typically more mature and have already adopted efficiency models to boost competitiveness. This, along with strong quality standards and, of course, economies of scale, puts clear and undeniable pressure on manufacturing facilities in CEE markets to pursue Western efficiency levels.


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