Manufacturing has hauled itself out of the economic downturn and companies are increasingly looking at how IT can help them grow their business.
A Confederation of British Industry forecast published last week predicted manufacturing output would grow 3% in 2004, rising a further 2.3% in 2005. The organisation’s Industrial Trends Review suggested that investment was set to rise for the first time in six years.
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Preliminary figures from the Computer Weekly IT Expenditure Report, produced by Kew associates, reveal that the rate of growth of IT spending in the manufacturing sector will more than double in 2004 from 2.3% to 5.1%.
The major challenges for IT directors with manufacturers fall into four core areas: improving internal information processes, planning product lifecycles, increasing the efficiency of the supply chain and driving innovation.
Analyst company Forrester Research said 50% of manufacturers lack visibility of their plant activities, a situation which can lead to order delays and inaccurate order status reporting.
To tackle this, companies such as DaimlerChrysler have built simulations using a concept called digital production, which is designed to identify possible problems in the production process before they occur.
Product lifecycle management is another area where IT has a role to play. PLM tracks the process of managing a product throughout its lifecycle, from capturing customer requirements through to retirement. Analyst firm Meta Group believes PLM will become a key component of enterprise information management strategies.
Boeing is implementing PLM in the design and production of its forthcoming 7E7 airplane, through a contract some industry watchers have described as the most significant PLM deal ever.
The third role for IT in manufacturing is in making the supply chain smarter. According to AMR Research, businesses trying to implement supply chain management have failed because they have not understood or gauged demand properly.
AMR has suggested an approach where the manufacturer is more closely linked to its customer, called a demand-driven supply network. The manufacturer is constantly fed information through the supply chain on the sales levels of their product at the point of sale and stocking levels in the warehouse to produce enough to keep the supply chain fulfiled.
Finally, IT innovation will be a driver for firms trying to differentiate their products. Examples include car maker Hyundai, which has been piloting telematic systems in vehicles. In-car computers can collect information to help designers improve the next generation of car design.