Manufacturers are often cautious adopters of information technology. Rightly so: production-line glitches can cost a fortune - and avoiding disruption is usually more important than deploying cutting-edge technology.

Nevertheless, web services technologies are already winning converts among manufacturers by promising to streamline and accelerate information feeds, and to link trading partners more closely.

Manufacturers are already using XML, the powerful data-description language, and Soap (simple object access protocol), the communications protocol, to link business processes more easily and cheaply.

Perhaps unsurprisingly, web services are most advanced among high-technology manufacturers, who often feel compelled to "eat our own dog food" as one executive put it.

Dell Computer, the PC and server maker, has revolutionised its factory-scheduling and demand-planning functions by connecting its factories more quickly to its parts suppliers using web services technology. The system, based on software from i2 and bespoke work by Accenture, generates new manufacturing schedules every two hours, reflecting customer orders in real time.

Dell has cut its factory inventory buffer from 30 hours to five hours, decreasing cycle time and releasing more space for assembly work. Suppliers have cut their inventories, too. Worldwide, the system has saved Dell up to $200m since 2000 and has made its supply chain far more efficient, says Nicky Hartery, Dell's vice president for European operations and services.

"We've seen significant benefits. We have a much better view of our material flow at any one time, and we understand what's going on far better. Inventory turns have doubled or quadrupled," says Mr Hartery, who is based in Dell's Limerick plant.

Another manufacturer eating its own "dog food" is Cisco Systems, the communications equipment maker. Cisco uses XML and Soap to streamline its order-management information systems, drawing together information from 17 different reporting tools to create a single view of order status.

"Web services allow you to do the things that you've done for a long time, but better and more efficiently," says Michael Munro, executive adviser at Cisco's internet business solutions group, based at Bedfont Lakes near London's Heathrow airport. "We cut the time our people spend reconciling data, increasing their productivity. We also need less time and people to maintain our [reporting] tools."

But web services are not an easy ride. They can require significant organisational change - especially within IT operations - and development tools are still immature. "Everyone says that their tools will do X or Y, but when you pull back the covers, it's a lot harder than it looks," says Mr Munro.

Indeed, the general immaturity of web services technologies, especially their poor security, means few businesses will share their data with outsiders yet. Many restrict web services to internal communications.

AvestaPolarit, a Swedish stainless steel maker, uses web services to streamline communication between rolling mills. The company has saved management time and improved the quality of its products, says Ronny Karlsson, IT development manager at AvestaPolarit's cold-rolling mill in Torshalla, Sweden.

The mill receives raw material from AvestaPolarit's hot-rolling mill, which it processes before sending out to industrial customers. Monitoring the quality of material from the hot-rolling mill and feeding this information back is an important processes. This used to happen by fax and paper, and could take hours or even days.

Earlier this year, Mr Karlsson's team installed a computerised feedback system, using tools from Borland Software. It sends information in XML format using the Soap communication standard, making the feedback virtually instantaneous. The information can be accessed by any device from any manufacturer that understands XML and Soap, and has already helped the business after little more than three months.

"Faster feedback allows us to tune the production process more quickly, which means we improve quality and save money," says Mr Karlsson. He would like to give external customers access to this information, so that they could schedule their production better, but that must wait until security improves.

"Customers need information that they can process automatically through computers; they want more data than they get just by looking at a screen. But security is a major issue," he adds.

There is the problem. Web services promise much, and for once analysts, vendors and users agree that it will deliver on many promises. But it is still early days, and for most businesses it is simply too risky to bet a big project on web services.

Hitachi Europe, based at Maidenhead in the UK, manufactures components for big names in the computer, consumer electronics, automotive and power-supply industries. Richard Bromberg, director of Hitachi Europe's IT group, will not deploy web services in Hitachi's production systems yet.

He is sticking with tried-and-tested EDI [electronic data interchange] communication standards, which predate the web and are still popular among large manufacturers, including his biggest customers.

"We're taking a very cautious view towards IT investment at the moment. In the fullness of time we'll use XML, but we're not ready for it yet," says Mr Bromberg. He is concerned that web services standards are not mature enough to guarantee trouble-free communications with his major customers.

"EDI is there, and our customers are happy with it. They are not demanding XML yet, because they want very robust linkages. We wouldn't be thanked for holding up Ford's production line - it's as simple as that," says Mr Bromberg. He reckons that web services have about a year to go before they are suitable for Hitachi.

Cisco and Dell can introduce web services technology partly because they already have trading partners comfortable with internet-based communication, and partly because their market position as major customers means they can push through such a move.

AvestaPolarit and Hitachi, by contrast, are not ready to use web services for trading with partners. Most manufacturers are probably in the same boat. "We won't see web services being used for integration between organisations on a large scale before 2003," says Adam Bosworth, vice president of engineering at web services developer BEA Systems.

Technical immaturity, security issues and an industry-wide lack of experience with web services mean that most manufacturers will implement the technology gradually. One of the chief attractions is that businesses can deploy web services step-by-step, rather than through a "big bang".

But for those with confidence, market power and nerve, the business benefits are already there for the taking. As at the races, you pay your money and you take your chance.

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