The market for Continuous Improvement (CI) systems had total hardware, software and services revenues of more than $200 million in 2005. Research from ARC Advisory Group shows that figure will nearly double by the end of 2010. Driven in large part by strong competitive pressures and successes with CI solutions, the CI market will see a strong compounded annual growth rate (CAGR) of 12.7 percent.
Globalization is exerting extraordinary pressure on manufacturers, causing most to adopt Continuous Improvement programs. The primary CI programs are Lean Manufacturing and Six Sigma. Many also use Total Quality Management (TQM) and Theory of Constraints (TOC). “A corporation’s business processes are embedded in their software systems. As they adopt Lean Manufacturing and Six Sigma, they increasingly need systems tailored to these programs,” according to Research Director Ralph Rio
, the principal author of ARC’s “Continuous Improvement Systems Worldwide Outlook
The market for CI systems is diverse in terms of the quantity of suppliers and the breath of improvement methodologies that they support. ARC’s survey of manufacturers shows that 80 percent of them have adopted a Continuous Improvement program. Many of these manufacturers have gained the experience they need and are ready to augment their programs with CI systems. The market has recently experienced an increase in growth that ARC has forecasted to continue for at least the next five years. This is a critical time for the market suppliers as CI systems have clearly passed through the tipping point of acceptance.
Technology Enhances CI
CI programs increase business performance by involving a broad range of people, methods and technologies. Over time, a series of small improvements cumulate and compound into a huge improvement. Each program provides a focus and repeatable methodology for implementing a large number of these incremental improvements.
Many manufacturers are using technology to enhance their program’s effectiveness. Abundant, well published successes provide executives with the confidence to invest in CI systems. This study examines the market for applications that manufacturers use to bring their programs to a new level of performance. The types of applications 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).
The CI systems market has a multitude of participants who range from small, start-up, best-of-breed companies to established, multi-billion dollar suppliers. Sixty-nine of the suppliers are profiled in this study.
Benchmarks, Myths and Reality
ARC has conducted multiple surveys among manufacturers who are using Continuous Improvement programs. Reports containing the key findings are included in a special chapter with recommendations. This chapter exposes many myths and informs readers of the reality. Suppliers will gain a better understanding of market needs for their product development. Manufacturers will gain benchmarks for improving their programs.