Saudi manufacturers keen on technology quest to close efficiency, productivity gap

JEDDAH –  In a clear distinction from the rest of the CEMA region, a desire to ‘Improve Productivity & Efficiency’ ranks as the top business driver for 2014 among Saudi Arabian manufacturers, according to the latest findings from IDC Manufacturing Insights. Thirty five percent of the 48 Saudi manufacturers interviewed by IDC identified this as their primary motivator, while the other CEMA countries covered by the survey all showed ‘Increase Revenue/Market Share/Attract New Customers’ or ‘Reduce Costs’ as the top drivers.

IDC Manufacturing Insights believes that most of the efficiency and productivity gains will stem from improvements in manufacturing operations. This is because 55 percent of the Saudi respondents – the highest proportion across all the interviewed CEMA countries – set ‘Improve Manufacturing Operations Management’ as their top strategic objective for 2014. Improvements in the quality of products and the reduction of delivery lead times will be the two shop-floor areas where production managers will invest most of their time and resources.

In addition, 53 percent of the Saudi respondents admit that IT will play a significant role in helping them to achieve their objectives for the year. As Saudi manufacturers are generally one step behind the CEMA average in terms of their manufacturing capabilities, a significant proportion of them have ambitious plans in place for the near future. To this end, they are planning to use technology as a significant enabler for closing the manufacturing efficiency and productivity gap that currently exists.

The strategy is also obvious from the IT budgets that have been reserved for IT investment, with 50 percent of Saudi respondents acknowledging that their IT budgets had increased for 2014. And in a further show of the investment that is set to take place, half of those again indicated that the increase is in the range of 10-14 percent on the previous year. These numbers should see Saudi Arabia rank among the fastest growing markets across CEMA in 2014 in terms of IT spending within the manufacturing sector.

“Saudi Arabian manufacturers seem to have a very strong understanding of the critical role that IT can play in today’s manufacturing landscape,” said Martin Kuban, lead research analyst for CEMA at IDC Manufacturing Insights.

“As such, they will help drive growth in the Middle East IT markets by undertaking significant investments in new manufacturing-specific technologies. In particular, we have noticed Saudi manufacturers declaring some very high-level interest in 3rd Platform technologies, with mobility, business intelligence, and cloud computing set to pave the way forward for the Kingdom’s manufacturers. Again, the interest shown in these technologies is among the highest seen across all the CEMA countries that participated in the survey.”

IDC Manufacturing Insights conducts its extensive annual survey of CEMA manufacturing organizations in order to ascertain what the year will hold for enterprises in terms of business trends and technology initiatives. More data from this survey is presented in the report ‘Central & Eastern Europe, Middle East, and Africa Manufacturing Value Chains: IT Focus’, which provides in-depth IT insights across manufacturing value chains and CEMA sub-regions.

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