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Manufacturers raid piggybanks for ERP and RFID
'Let's just let it ripen up a bit'

By Jo Best

Published: Friday 27 May 2005

Manufacturing CIOs will be spending their budgets on RFID and ERP this year.

Analyst house Datamonitor has found that by 2010, the market for radio frequency identification will top $6bn, as pharmaceutical, consumer packaged goods and automotive industries start to spend on tracking their products.

Datamonitor predicts the boom will really take off at the latter half of next year, as initial pilots are wound up, results analysed and full-scale rollouts started.

The UK and Germany will be leading the way on RFID spending at least until 2010.

According to Adam Jura, Datamonitor analyst, the resolution of cost and standards issues, as well as better hardware availability, will convince CIOs to start taking the technology seriously.

Middleware, such as ERP, will be the key to gaining ROI from deploying the tracking technology, the analyst house believes. A separate study from AMR Research has found that ERP is also being taken up more widely, with 16 per cent of manufacturing companies evaluating the use of a resource planning application this year.

SMEs in particular are still lagging behind in implementing ERP systems, with 73 per cent having no enterprise resource planning in place.

Twenty per cent of small businesses in the manufacturing and services sector are evaluating introducing ERP for the first time, and 50 per cent of all companies will be reviewing their initial investments in the technology within the next 12 to 18 months, the research said, with a view to upgrading, adding new functionality or replacing their systems.