Top 10 predictions for manufacturing in 2006

By Staff -- Modern Materials Handling, 2/1/2006

In the changing world of manufacturing, a crystal ball would be of great use. Consider this a feasible alternative.

According to Manufacturing Insights, an IDC company, the following is what we can expect from manufacturing this year.

#1: Technology leadership is required
Smart companies will invest at least 50% of their new project budgets in making better decisions. Oversight of technology investment will be combined with continuous improvement programs, and CIOs who don’t take the leadership role will see someone else in the organization given the technology investment portfolio.

#2: Agility and effectiveness are supply chain priorities in 2006
Manufacturers will invest in creating intelligent decision models and collaborative excellence, and companies will start synchronizing demand with supply and integrating long-term and short-term planning.

#3: Customer and product analytics is a management priority
Demand analytics will be a high growth category for IT spend—look for active investment in analytical applications to enable better decision support for customer management, pricing and inventory policies, and service management.

#4: Product innovation gets a lifecycle
The value of PLM tools continue to develop as individual propositions and the PLM market will experience strong growth in 2006.

#5: RFID costs continue to fall, but adoption continues to stall
Business cases will emerge for higher valued products in closed loop implementation scenarios and lighthouse companies will view RFID in the context of a data acquisition platform.

#6: China begins to overheat
Products branded by Chinese manufacturers will begin to have an impact in certain markets in North America and Western Europe. At least one major acquisition will go through and certain industry segments will shift some manufacturing to Eastern Europe, Latin America, and India.

#7: Warranty and quality will draw management attention
Warranty costs will continue to escalate in proportion with increases in new product introductions. Technology necessary for effective closed loop management will continue to mature—but a lack of standards across industry segments will hinder adoption.

#8: Lean sigma needs software
The market for software that automates the lean process will grow in excess of 20% in 2006.

#9: IT spending shifts to intelligent decisions models
High performing manufacturing firms will allocate at least 50% of new IT investment to creating value loop applications—priorities will center on innovation, growth, and productivity. The probability of success for these projects will be higher when business unit leadership is accountable for the results.

#10: Vendors must teach customers to fish
The sense of urgency to upgrade ERP backbones will wane and the strategic SHOMI vendors will be expected to assist customers in using SOA to drive usage, lower costs, and enable intelligent decision models.