Continuous improvement systems to grow 12.7% annually
The market for continuous improvement (CI) systems was $211.5 million in 2005 and is forecasted to grow to $402.8 million by the end of 2010, with a strong compounded annual growth rate of 12.7%, according to the ARC Advisory Group.
The results of surveys ARC has conducted among manufacturers show that 80% of them are applying one or more CI methodologies. The programs used most often are Lean manufacturing, Six Sigma, total quality management and theory of constraints, and manufacturers are looking to CI systems to improve operational performance in the areas of labor utilization, inventory levels, quality, asset utilization and cost of goods sold.
Some proponents of traditional Lean manufacturing avoid systems, recommending a manual approach in order to keep people close to the process. However, many manufacturers are using technology to enhance their program’s effectiveness.
“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,” said Ralph Rio, research director and principal author of ARC’s “Continuous Improvement Systems Worldwide Outlook.”
The study examines the market for applications that manufacturers use to bring their programs to a new level of performance. The applications include electronic Kanban, statistical process control, finite capacity scheduling, advanced planning and scheduling, overall equipment effectiveness, TQM and value stream mapping.