FilingInformation:August2003,IDC#,Volume:1WorldwideVerticalMarkets:SpecialStudyFilingInformation:August2003,IDC#,Volume:1ChinaManufacturingIndustrySolutionStudyGlobalHeadquarters:5SpeenStreetFramingham,MA01701USAP.508.872.8200F.508.935.4015www.idc.com#2003IDCSPECIALSTUDYChinaManufacturingIndustrySolutionStudyIDCOPINIONITandtelecomhardwarecontinuedtoaccountforthelargestproportionofITspendingin2002withashareof64.8%andavalueofRMB9,809.5million.Previously,manufacturershadastrongfocusondevelopingtheirITinfrastructure,withIT&telecomhardware(includingPCs,serversandnetworkproducts)accountingforthemajorityofITexpenditure.In2002,overallinvestmentinITsolutions,includingsolutionrelatedsoftwareandservices,amountedtoRMB2,833.5million.Thisaccountedfor18.7%ofthetotalITspendinginmanufacturingindustry.EnterpriseITandtelecominfrastructureconstruction,nonsolution-relatedsoftwareandservicesaccountedfor81.3%.Productsandpartners(suchasITvendorsorSystemIntegrators)arekeyfactorsindecidingITsystempurchaseinthemanufacturingindustry.ManufacturershavebecomewiserinITpurchasing,productsdemonstrationsarenolongersufficientinmakingthepurchasingdecision.ManufacturersbegantheirinformatizationprocessbyequippingtheirdesigndepartmentswithCAXsystemstoincreaseproductdevelopmentcapabilities.AfterexperiencingthebenefitsofferedbyCAX,mostenterprisesoftenadoptedothersolutionssuchasPDM,ERPandSCM.Thesehaveallbecomeanareaofinvestmentfocusforenterprisesinrecentyears.Althoughmanufacturerswerequickincommencementoftheirinformatizationprocess,mostmanufacturersdidnotputmuchemphasisonITinvestment.ConsequentlyaccountingfortheirlowprofitmarginandlimitedcapitalandillustratingtheoveralllowlevelofrealITadoptioninthemanufacturingindustry.Generally,manufacturershaveapoorunderstandingoftheimportanceofITservices.TheywouldratherinvestintangibleIThardwareandsoftwarethanonservices.However,moreenterprisesarerealizingtheimportanceofITservicesinthesuccessfulimplementationofITsolutions.IDCpredictsthatforthenextfiveyearstheproportionofITserviceswillgraduallyincrease.2003IDC#TABLEOFCONTENTSPInThisStudy1Methodology.............................................................................................................................................1ManufacturingINdustryOverview2IndustryDevelopmentTrendsOverview...................................................................................................2CurrentStatusofChina'sManufacturing...........................................................................................2StructuralFeaturesofChina’sManufacturing....................................................................................3KeyProblemsFacingChina’sManufacturing....................................................................................4TheImpactofWTO...........................................................................................................................5ImpactofSARS.................................................................................................................................6DevelopmentTrendsof10IndustrialSectorsinChina’sManufacturing...........................................7IndustryBuyingBehaviorReview.............................................................................................................8Decision-makingProcessforITSystemPurchase...........................................................................8MajorFactorsinPurchase.................................................................................................................9SelectionCriteriaofVendorsorSystemIntegrators..........................................................................10ItAdoptioninManufacturingIndustry.......................................................................................................11ITAdoptionreview.............................................................................................................................11ITAdoptionEmergingTrends............................................................................................................12ITSpendingForecastfor2002-2007.................................................................................................13Industrysolutionmarketoverview16MarketOverview.......................................................................................................................................16MajorITSolutionsAdoptionReview..................................................................................................17SolutionInvestmentReviewbySoftwareandServices.....................................................................19SolutionInvestmentReviewbyGeography.......................................................................................20SolutionMarketFutureOutlook.........................................................................................................21CompetitiveLandscapeintheManufacturingSolutionsMarket..............................................................