2010 was a volatile year for manufacturing. While the industry began a slow recovery from the economic devastation of the recession, many manufacturers with tight IT budgets struggled to keep up with technology. Software vendors took notice and responded with products to make IT management simpler and more affordable. To get a comprehensive view of the year’s ups and downs, the SearchManufacturingERP.com team took a look back at the top manufacturing IT trends of 2010, ranking them in rough order of importance.
1. Continued economic woes put software innovation on hold
The waning months of the recession caused manufacturers to continue to delay major ERP projects in favor of more affordable, niche applications. Software innovation and adoption were put on hold in some technology segments. Manufacturing 2.0, a next-generation manufacturing execution system, or MES, concept, was a buzzword in 2007 -- just before the economic collapse. Three years later, few companies have moved toward such Manufacturing 2.0 advances as blogs, wikis, instant messaging and user-centric interfaces on the shop floor.
Few manufacturing IT professionals had financial or managerial support for ERP upgrades, and making the case for an ERP upgrade still required hard proof of the short-term, cash-flow benefits. The quicker a project’s return on investment (ROI) could be realized, the better, and so manufacturers looked for fast-payback ERP projects, such as improving data integrity and moving to third-party maintenance.
2. SaaS came of age, and on-premises, hosting vendors responded
Software as a Service (SaaS) matured as a viable choice for some manufacturing ERP and supply chain management systems, while strained budgets drove more manufacturers to SaaS and other cloud computing options for cheaper, quicker ERP implementation.
New initiatives by software vendors suggested that full-featured, customizable ERP is moving more decisively into the cloud, providing new SaaS ERP deployment options to manufacturers.
But many manufacturers remained wary of cloud computing risks, especially security and reliability.
3. Early adopters took first steps into mobile ERP
Vendors responded to the emergence of tablet computers and the growing popularity of smartphones by creating more mobile ERP options for manufacturing. Writing apps for the variety of smartphones available -- from the iPhone to the Blackberry to the Droid -- has posed a challenge for vendors. Beyond ERP, mobile apps for manufacturing supply chain functions, including mobile TMS, emerged.
The Apple iPad burst onto the scene in 2010 and vendors scrambled to create iPad-compatible business applications. Analysts question whether the iPad can replace PCs and whether the pricey tablets can withstand the daily stresses of manufacturing environments. And many cash-strapped companies can't justify the cost of tablets and smartphones.
4. B2B collaboration went global
Manufacturing IT struggled to respond to globalization opportunities and challenges. Companies expressed interest in bringing more collaboration to their supply chains, both local and global, but many remained unsure of the software and business processes for getting there.
More and more companies, however, turned to supply chain finance and e-sourcing to solidify closer relationships with their suppliers. Analysts observed increased interest in vendor-managed inventory (VMI), a technique for electronically connecting trading partners to plan and execute supply chain processes.
Vendors tried new approaches. SaaS business process management (BPM) moved further into the cloud, allowing simplified trading-partner connections and more efficient supply chains for manufacturers. IBM said it would buy Sterling Commerce, a marriage designed to give IBM’s BPM tools and Sterling’s transactional business-to-business software the strengths of each other.
The onslaught of globalization seemed to be on everyone’s minds. Attendees at a supply chain conference were advised by former U.S. commerce secretary Carlos Gutierrez to be leaders in globalization and simplify its complexity by avoiding overuse of metrics.
5. Warehouse mobility technologies proliferated
Warehouse mobility and automatic identification and data capture, or AIDC, options expanded beyond bar codes and RFID, with innovations including real-time location systems, or RTLS, and new wireless network-based technologies, including WiFi-enabled RFID and tablet computers.
Meanwhile, item-level RFID, long thought too expensive for high-volume use, showed signs of limited adoption, especially among apparel manufacturers and leading-edge retailers. New research proved its ROI when used to track inventory from factory to point of sale.
Robotic order-fulfillment systems and other emerging warehouse-automation technologies attracted more attention, in part because of their role in lean manufacturing. By integrating the systems through a warehouse control system linked to a warehouse management system, manufacturers automated distribution and improved supply chain visibility.
6. Interest in carbon management software increased
Manufacturers became interested in carbon management software and other sustainability tools for the potential cost savings, and not simply to address compliance issues. While carbon management software, also known as sustainability software or green supply chain management (SCM) was traditionally seen as a tool for meeting federal emission regulations, more companies began to view it as a way to save money as well as trees.
Green IT, with its focus on reducing waste across the supply chain, fits well with the frugality that IT is supposed to facilitate. Some carbon management software helped manufacturers offset transportation carbon footprints. Other companies worked to build leaner, sustainable supply chains from start to finish. They realized that green SCM applies to many steps in the manufacturing process and can be a valuable PR tool.
7. More manufacturers looked to 3PLs for transportation management
Faced with high fuel prices and small IT staffs, manufacturers tried to lower their transportation costs by outsourcing their shipping and transportation management systems (TMS) to third-party logistics (3PL) providers. 3PLs can be a useful tool to move inventory quickly and effectively and are ideal for manufacturers that can’t afford in-house TMS.
Manufacturers use 3PLs for a variety of transportation and logistics functions, including freight management, product visibility, warehousing and inventory management. Outsourcing these business needs can take a heavy burden off manufacturing staff and reduce TMS-related errors.
8. The PLM 2.0 vision became clear, but implementations were rare
Analysts continued to advocate for a more collaborative and visual product lifecycle management (PLM), and vendors responded with new three-dimensional and cloud computing features to help break PLM out of the engineering silo.
Vendors also continued to add web portals, dashboards and other cloud-based features, along with improved analytics to make product data more accessible to a wider range of stakeholders.
Market-research firms, including IDC, said greater use of 3-D and other visualization methods helped spread PLM throughout the supply chain, but some manufacturers said it is easier said than done, citing bandwidth costs.
Bottom line: Though the vision for a collaborative, next-generation PLM is now clear, it remains as much an idea as a reality, even at progressive companies with large budgets.