China's Positive Policies Help IT Growth In Manufacturing Industry

Chinese government's favorable environment and investments are pushing adoption of IT applications, according to report from CCID Consulting.

The Chinese government's favorable policy atmosphere is largely responsible for the growth of information technology (IT) applications in the manufacturing industry, according to a recently released report from CCID Consulting, a Chinese consuling firm.

As an example of the government support, Ji Libin, an analyst at CCID Consulting, cites the Ministry of Science and Technology's plans to invest $630 million to undertake the National Manufacturing Industry IT Science and Technology Project.

Overall IT investment in the manufacturing industry in 2006 is projected to reach $8.7 billion, up by 16.4 percent over 2005. Over the next three years, investment will increase at a CAGR of 15 percent, the report states.

For individual market segments, investment in information services will see the fastest growth compared with investment in hardware and software.

CCID believes that manufacturing companies in China have developed a strong understanding about the importance of information system building.

In order to improve product innovation, digital technologies such as CAD, CAE, CAM, CAPP, PDM, EDA, RP and reverse engineering are being applied to gain production system information and to boost competitiveness.  
According to the report, the benefits of these applications have resulted in shortening time-to-market for new products, increasing product variety, meeting customization demands, lowering product cost, improving product quality, reducing operating cost, improving customer relations, and strengthening supplier

But CCID notes that for management information systems, there is strong antagonism between ERP standardization and personalization.As users realize the shortcomings of ERP, they are becoming more interested in MES applications. Still, due to diversified demands, actual applications still need improvements, the report concludes.