Use of Wireless Technology in Manufacturing to Grow 26% Annually.

DEDHAM, Mass. -- Wireless technology, now the networking backbone in homes and offices worldwide, is about to see widespread adoption where it will have, perhaps, its most profound impact: on the plant floor and out in the field. The worldwide market for wireless technology in manufacturing is expected to grow at a compounded annual growth rate (CAGR) of 26% over the next five years. The market was $325.7 million in 2005 and is forecasted to be over $1 billion in 2010, according to a new ARC Advisory Group study.

There are a number of important factors that make wireless the most important emerging technology today in manufacturing automation. "Manufacturers recognize that wireless can offer cost reductions. More importantly, they see wireless technologies as an enabler of entirely new business processes that will not only be less expensive, but will be safer, more reliable, and far more transparent than their current manufacturing practices," according to Senior Analyst Harry Forbes ([e-mail]), the principal author of ARC's "Wireless Technology in Process Manufacturing" (www.arcweb.com/res/wireless).

Visibility and Asset Management to Drive Growth

The desire for new and improved business processes extends across all types of manufacturing. A major factor favoring greater deployment of wireless technologies in manufacturing is the ability of wireless applications to enable new and better ways of operating manufacturing plants, and process manufacturing stands to feel the greatest impact. Field operations within a process plant are a classic case of the need for more information that can only be delivered wirelessly. Historically, process manufacturing has not been able to use wireless on a broad scale, but new sensor networking and WLAN developments will soon change this, presenting a huge opportunity for manufacturers who can use wireless to gain visibility into hidden processes, assets, and activities. These now represent "invisible" assets still not well integrated into the enterprise.

Wireless technology offers a more cost-effective means of monitoring plant equipment and production processes, and enables real-time decision making to optimize production or to head off maintenance issues before they interrupt production. Literally millions of field devices are installed at great cost in process manufacturing facilities. However, because most are not digitally enabled, their ability to share process and maintenance information is extremely limited. This presents a huge opportunity for wireless technology, which can be used to enable these "stranded" assets to the benefit of operations, maintenance and business systems across the enterprise.

Wireless LAN, Sensors Are Moving into Manufacturing

The industrial wireless market is not new by any means. Wireless has been a part of SCADA systems in oil, gas, and electric power for decades. The major trend in the market, however, is growth through incorporation of new wireless technologies. These technologies have their roots in the IT, telecom, consumer, and military markets. Manufacturing is adopting them in cases where the value of wireless information is apparent, but the market is far from saturated.

Wireless LAN technology has been mainly deployed at indoor facilities, but these will expand to encompass entire plants. Furthermore, new wireless sensor technologies will reduce the cost of information dramatically as they are developed and deployed in manufacturing. For more information on this study, go to: www.arcweb.com/res/wireless.

About ARC: Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. No matter how complex your business issues, our analysts have the expert industry knowledge and first-hand experience to help you find the best answer. We focus on simple yet critical goals: improving your return on assets, operational performance, total cost of ownership, project time-to-benefit, and shareholder value. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax [phone], E-mail [e-mail], Web www.arcweb.com.