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RFID spurs manufacturers to boost software spend
Cutting the fat out of the supply chain

By Steve Ranger

Published: Thursday 24 August 2006

Manufacturers are investing in new software as they try to streamline their supply chains and manage the introduction of new technologies including RFID.

Battling against foreign competitors, and keen to reduce the impact of increasing materials costs on their margins, manufacturers are looking to implement lean production strategies, according to analyst Datamonitor.

By using supply chain management software these manufacturers can collect, organise, store and analyse data to assess the impact of these strategies.

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Car manufacturers, consumer packaged goods and high-tech will lead the spending, which will reach $2.5bn by 2010, up from $1.6bn last year. Vendors are also now offering supply chain management packages at lower cost for smaller manufacturers, causing continued growth in the market.

The analyst house predicted this growth in spending will be driven by SMEs and larger manufacturers looking to either replace legacy systems or start a new implementation from scratch. Technologies such as RFID that rely upon a solid supply chain management suite will also drive adoption.

Datamonitor manufacturing technology Adam Jura said manufacturers will always have a focus on their bottom line to maximise revenue without passing on costs to their customers.

He said product differentiation, speed to market and post-sales support are major focuses for manufacturers, and for many of the associated processes, these companies will be looking to their technology partners for help.