Examining AI’s Role in Thailand’s Manufacturing Transformation

Artificial Intelligence (AI) is set to be a cornerstone for the success of the Thailand 4.0 strategy, according to a new whitepaper published by the Thailand Development Research Institute (TDRI) in collaboration with the Electronic Transactions Development (ETDA) and SAP. The report outlines the opportunities and hurdles in shifting Thailand’s economy towards innovation and high-tech industries within its manufacturing sector.

The whitepaper underscores the vast potential for AI within Thai manufacturing, suggesting it could expand to 300 distinct use cases—still, current adoption lags, with only 2% of manufacturers achieving full Industry 4.0 integration. Nevertheless, the sector anticipates a significant 60% increase in AI adoption by 2025.

Projected benefits are substantial. AI implementation is expected to:

• Enhance demand forecasting, potentially reducing lost sales by 65%.
• Improve productivity by 20% through AI-driven automation.
• Cut machine downtime by 20% via predictive maintenance.
• Reduce unsafe workplace behaviours by up to 90%.

Data Identified as a Primary Obstacle

Despite a firm intention to adopt AI—73% of Thai organisations plan to do so—significant challenges remain. Data quality and infrastructure emerge as primary concerns. The whitepaper reveals that 65% of manufacturing organisations cite data quality as a barrier, with an identical percentage pointing to inadequate infrastructure as a hindrance to AI adoption.

“The only way to get the best Business AI is with the best data,” stated Kulwipa Piyawattanametha, Managing Director of SAP Thailand. She emphasised that SAP’s Business AI solutions, utilised by over 34,000 customers, enable businesses to optimise operations through real-time data analysis and automation while ensuring data privacy, security, and compliance. These aspects are crucial elements for leveraging AI effectively.

Policy and Collaboration as Enablers

The whitepaper proposes key policy recommendations to foster AI adoption and mitigate risks. These include establishing clear AI governance strategies, adjusting regulations to remove ambiguities surrounding AI use, and enhancing public-private sector collaboration through industry-specific subcommittees.

Dr. Saliltorn Thongmeensuk, Senior Research Fellow at TDRI, noted the need for focused efforts in governance, incentives, and partnerships. “Businesses need consultation to identify which AI solutions are most suitable for them to ensure a strong return on investment (ROI),” she added.

The whitepaper concludes that a collaborative approach between public bodies and private enterprises like SAP is essential. By leveraging AI-powered innovation built on a reliable data foundation, Thailand’s manufacturing sector can drive significant growth, contributing substantially to the overall economic goals of the Thailand 4.0 strategy.

What This Means for Mastering SAP Insiders

SAP’s deeper, industry-specific functionality addresses the need for suitable AI. Thai manufacturers, especially in regulated sectors, can leverage SAP Digital Manufacturing’s smart guided execution for compliance. Asset-intensive players can use SAP Asset Performance Management with IoT integration for optimised maintenance. Furthermore, the enhanced SAP Business Network, with features like GHG emissions tracking, directly supports Thailand’s sustainability goals. This specialisation, combined with insights from participating in events like Mastering SAP Connect Gold Coast from June 5-6, allows SAP professionals to guide Thai manufacturers towards specific, high-impact AI implementations for better ROI.

The Thailand 4.0 whitepaper flags a critical hurdle. Sixty-five percent of manufacturers struggle with data quality and infrastructure. This is where SAP’s push towards a unified ecosystem offers a direct solution. The SAP Business Suite, integrating SAP SCM and SAP Cloud ERP on the SAP Business Technology Platform, is designed to create a seamless flow of information. This means building a robust, reliable data foundation for any successful AI initiative for Thai manufacturers. SAP helps overcome the data challenges hindering Industry 4.0 adoption by improving data flow and integrating core business functions.

Advancements in Joule provide the tools to enhance manufacturing. Joule’s ability to interpret planning results can directly power enhanced demand forecasting. Meanwhile, agentic AI can drive productivity gains and predict maintenance benefits envisioned by managing maintenance, shop-floor disruptions, and field service. For SAP professionals advising Thai businesses, these AI tools are the engines capable of propelling manufacturers towards the ambitious goals of Thailand 4.0, transforming operations from reactive to proactive and intelligent.