After several years of slack sales, some manufacturing companies saw demand for their products pick up this year, putting pressure on IT to more effectively track operations as well as manage spending and assets to increase market share profitably. IT systems that alert managers to specific events in their operations gained popularity. Outsourcing of development and support, something manufacturers have been doing for several years to cut costs, continues to affect hiring and planning.

Companies like Motorola Inc. have fared well. The No. 2 maker of cell-phone handsets after Nokia, Motorola has had a big success with its slim Razr phone and other mobile products. The company this month unveiled a cell phone that plays songs downloaded from Apple Computer's iTunes software. "We're looking at growth periods again" in handset and telecom markets, says Toby Redshaw, Motorola's corporate VP of IT strategy, architecture, and E-business.

INSIDE MANUFACTURING Average portion of 2005 revenue spent on IT 2.0% Companies spending more on IT this year than last 58% Buying directly from foreign suppliers 82% Centralizing control of IT operations in past 12 months 64% Bringing outsourced functions in-house in past 12 months 16%

Motorola this year centralized business-activity-monitoring software it had used on a selective basis. The software analyzes data from reports and system transactions to detect potential problems, then sends managers E-mail alerts so they can take care of problems before customers are aware of them.

"Most companies have subjugated middleware to something you stuff in the basement," Redshaw says. Motorola doesn't look at its monitoring software as just part of the infrastructure, because it has real business value, he says.

CEO Ed Zander, who took over Motorola at the beginning of last year, has been pushing the company to be more efficient and to bring "cool, useful" products to market, Redshaw says. "That message comes straight to IT," he says. "It gives us license to be a little further out there." For Motorola's IT department, that means finding technologies that can help the company profitably gain market share by managing spending and assets. "If you're using the same technology as everybody else, it's hard to compete," Redshaw says.

One example: Motorola has built a 12-terabyte knowledge-management system used by 64,000 staffers and business partners to retain expert knowledge about technical and business problems. Employees can create work spaces for projects inside and outside the company's firewall. This year, the company added wikis and blogs to the system. They've caught on--meeting participants can now blog about a presentation while it's happening, which, Redshaw says, "lowers the fudge factor in presentations."

At Herman Miller Inc., a $1.5 billion-a-year maker of office furniture, order volumes picked up this year, says Jeff Kurburski, director of infrastructure services. But the company's IT department still is concerned with funding new projects while holding down the budget for basic services. "Our focus continues to be on reducing our maintenance costs while maintaining our existing services levels and providing more funding for new development and projects that will in turn help grow the business," he says. IT delivered: It replaced branch-office tape drives with a central storage system, rolled out an electronic replenishment system that increased inventory turns faster than once a week, and introduced wireless scanning to speed up materials delivery to its research and design center.

	I.T. BUDGET BREAKDOWN Hardware purchases IT services or outsourcing Research and development 17% 15% 3% Salaries and benefits Applications Everything else 35% 18% 12% Data: InformationWeek Research

Illustration By Paul Watson

Return to the 2005 InformationWeek 500 homepage

	MANUFACTURING Agfa-Gevaert Group Alcatel Alstom Altadis USA Inc. Ametek Inc. APW Ltd. ATK Thiokol Ball Corp. Black & Decker Corp. Bombardier Aerospace Briggs & Stratton Corp. Carson Industries LLC CCL Industries Inc. Chamberlain Group Inc. Cooper Cameron Corp. Corning Inc. Danaher Corp. Deere & Co. Dresser Inc. Ericsson Inc. General Dynamics Corp. Governair Corp * Herman Miller Inc. HNI Corp. Illinois Tool Works Inc. Invensys Kimball International Inc. Knoll Inc. L3 Communications Holdings Inc. Lafarge North America Inc. Leggett & Platt Inc. Lockheed Martin Corp. Maytag Corp. MeadWestvaco Corp. Metso Corp. Mohawk Industries Inc. Molex Inc. * Motorola Inc. * National Oilwell Varco NCR Corp. Newell Rubbermaid Inc. * Northrop Grumman Corp. Owens Corning Parker Hannifin Corp. Rock-Tenn Co. Scientific Atlantic Inc. Shaw Industries Inc. Smiths Aerospace Smurfit-Stone Container Corp. Sonoco Products Co. * Southwire Co. SPX Corp. * Standard Register Taiyo Yuden (USA) Ltd. Teradyne Inc. Tyco International Ltd. United Technologies Corp. USG Corp. UOP LLC * denotes a top 100 company