Regenerative manufacturing offers $1.2t opportunity for ASEAN firms

A key driver of this shift includes the rise of artificial intelligence investments.

ASEAN manufacturers are set to tap into a $1.2t opportunity through regenerative manufacturing, according to a report by Kearney.

A key driver of this shift is the rise in artificial intelligence (AI) investments, with nearly 50% of manufacturers identifying AI as the most critical trend in manufacturing.

Sustainability is also gaining traction, with 60% of manufacturers already using eco-friendly materials, and 90% measuring their sustainability impact through carbon footprint analysis. Government initiatives, like Thailand’s Circular Economy Plan, support this trend.

The region is shifting from low-value manufacturing to higher roles in research, development, and product design, with Vietnam emerging as a regional innovation hub. Investments from global firms, including Samsung, reflect this shift.

Manufacturers are adopting twinning models, using Singapore as a strategic hub whilst tapping into cost-effective production in neighbouring countries, enhancing resilience and continuity, Kearney said.

Kearney’s report stresses that ASEAN manufacturers must move away from traditional approaches to fully leverage this growth opportunity. The firm recommends prioritising customer-first design, aligning product features with market demands for sustainability, and using AI-driven tools like sentiment analysis to better understand customer preferences.

Kearney said resilience should also be embedded into design by identifying supply chain vulnerabilities, adopting digital supply chain mapping, and enabling flexibility with "sense and pivot" capacities. Kearney also advises the implementation of platforming strategies that allow for late-stage customisation.

As ASEAN manufacturing enters a new era, Kearney noted that regenerative manufacturing offers the opportunity to drive economic growth, meet sustainability targets, and secure a competitive advantage globally.