Manufacturers' Global Pressures Pushing Growth In Continuous Improvement Systems

CI systems estimated to grow 12.7 percent annually, reach $402.8 million by 2010

As the race to compete in the global market continues to put pressure on manufacturers, they are increasingly turning to Continuous Improvement (CI) systems to help them reach their goals.

The market for Continuous Improvement (CI) systems is estimated to grow to $402.8 million by the end of 2010 with a strong compounded annual growth rate (CAGR) of 12.7 percent, according to ARC’s  "Continuous Improvement Systems Worldwide Outlook."

The market for CI was $211.5 million in 2005.

The report released today states that applications for CI systems have “crossed the chasm,” and leaders are starting to emerge for the key areas of the market.

“Adoption of technology to enhance continuous improvement programs allows manufacturers to take their business to a higher level of financial performance in both their P&L and balance sheets,” according to Research Director Ralph Rio, the principal author of ARC’s report on CI systems.

ARC's survey of manufacturers shows that 80 percent are applying one or more CI methodologies. The CI programs used most often by manufacturers are Lean Manufacturing, Six Sigma, Total Quality Management (TQM), and Theory of Constraints (TOC).

The reason manufacturers are choosing CI systems is to improve operational performance in the areas of labor utilization, inventory levels, quality, asset utilization, and cost of goods sold.

Some traditional Lean Manufacturing proponents disavow the use of CI systems and recommend manual
techniques as a way to to keep employees close to the process.  However, many manufacturers invest in technology to enhance their program’s effectiveness.

The study examined the market for applications that manufacturers use to bring their programs to a new level of performance; these include electronic Kanban (eKanban), Statistical Process Control (SPC), Finite Capacity Scheduling (FCS), Advanced Planning and Scheduling (APS), Overall Equipment Effectiveness (OEE), TQM, and Value Stream Mapping (VSM).