Smart Manufacturing Market 2020 and Forecast 2021-2027

                                          
Report Overview: Smart Manufacturing Market


The global smart manufacturing market size was valued at USD 194.7 billion in 2020 and is expected to witness a CAGR of 10.7% from 2021 to 2027. With the advent of industry 4.0 revolution, there has been a significant transformation in the manufacturing sector in the form of digitization and automation. The growing demand for knowledge-based manufacturing and connected supply chains, which are equipped with advanced control, sensing, modeling, and simulation capabilities, are driving the growth of smart manufacturing. Moreover, industrial internet of things (IIoT), cloud technology, and industrial analytics will play an critical role in fostering market growth over the forecast period 2021-2027.

The global industrial sector has been plagued by numerous concerns including intense competition, uncertainties in the supply of raw materials and energy, and exponential operational costs. As a result, industry players are actively looking for ways to reduce costs and make enterprises agile, accelerated, efficient, and compliant with consumer product quality. Smart industrial solutions with technological development and enhancements in automation, connectivity, and security will boost the productivity and efficiency in years to come. According to GSMA intelligence report, the industrial IoT connections will reach around 13.8 billion by 2025 and outpace number of IoT connections in consumer sector. The rise in number of IoT connections will foster the connectivity and digitization among enterprises. Moreover, various aspects of smart manufacturing will offer additional benefits such as real-time optimization and dynamic production, in turn boosting the demand for smart manufacturing at a rapid rate.

In addition, the need for upgrades and modernization of legacy control systems has become necessary to compete at international standards, which has also boosted the efforts for digitization and IT and OT convergence. Hence, digital plants and advanced manufacturing technologies are set to transform factories, production centers, companies, and entire value chains, thereby driving the fourth industrial revolution. However, there can be several challenges during the implementation such as the investment capital, requirement of new skills, and effective data security. Nonetheless, the transitory challenges can be addressed by making significant investments of turnover in the acquisition of new digital technologies, continuous training of workers, and improving efficiency by connecting sensor data and operations across several lines and machines.

An important aspect of the smart manufacturing industry is the growing interest and investments in smart infrastructure from batch, continuous, and discrete manufacturers. For instance, the June 2018 acquisition of GE Industrial Solutions (GEIS) by ABB was aimed at accelerating the companys growth in industrial automation and competitiveness in key markets. Similarly, an augmented reality startup, Upskill which helps manufacturers in improving its operations has been backed by Cisco and Accenture to develop its AR/VR technologies. The large acquisitions and partnerships in the market validate the current and the potential growth prospects in the years to come.

While cost reduction and industrial intelligence are the primary targets of industry players, product quality, sustainability, and compliance are gaining prominence in the industry. The return on investments in smart manufacturing is one of the key promoters of the market with numerous manufacturers having reported quantifiable benefits. It includes energy efficiency, reduction in safety incidents, reduction in cycle times, and lower maintenance costs. Moreover, Additive Manufacturing (AM) technologies, commonly referred as 3D printing is transforming the way products are designed, manufactured, and distributed in the automotive industry.

Component Insights: Smart Manufacturing Market

Based on component, the smart manufacturing infrastructure is segmented into hardware, software, and services. The hardware segment includes robots, 3D printers, IIoT enabling equipment and devices, and augmented and virtual reality devices. While these devices are utilized at the edge of networks, their demand has been increasing in the recent years. Different types of conventional and smart sensors are an important aspect of the hardware segment, which has been exhibiting not only rapid demand growth but also increased research and development activities. For instance, HMS Networks, a supplier of industrial communication and IIoT solutions has become one of the leading players in industrial IoT connectivity after acquisition of eWon, a manufacturer of PLCs in 2016.

The software segment is quite mature as numerous solutions have already been in use for many years. The solutions include manufacturing execution systems, product lifecycle management, and enterprise resource planning. However, the modernization of these systems and growth of analytics and Artificial Intelligence (AI)-enabled systems are expected to be the driving factors for the segments growth. The need for technology implementation expertise is anticipated to aid the growth of the services segment over the forecast period.

Technology Insights: Smart Manufacturing Market

Based on technology, the smart manufacturing market is segregated into various technologies including manufacturing execution system (MES), programmable logic controller (PLC), enterprise resource planning (ERP), supervisory control and data acquisition (SCADA), discrete control system (DCS), human machine interface (HMI), machine vision, 3D printing, product lifecycle management (PLM), and plant asset management. While some of these technologies have been in use for quite some time, segments such as 3D printing have been gaining traction in the recent years. With the use of AI and machine learning as a design aid, additive manufacturing technology, or 3D printing is shifting toward automation. In addition, 3D printing segment is expected to witness the highest growth over the forecast period owing to its large-scale adoption in design process and agile product iterations.

However, the manufacturing execution systems segment holds the largest market share in terms of revenue owing to increasing demand for streamlining workflows and reducing lead times. The application of MES will provide a strong foundation for the manufacturers to build the Industry 4.0 applications. Increasing demand for industrial automation coupled with the growing importance of legal and regulatory compliance is also driving the market growth. For instance, Microsoft has become one of the major contributors with respect to Industrial IoT offerings, along with Google, IBM, and Amazon providing IaaS + PaaS platform offerings for smart manufacturing companies.


End-use Insights: Smart Manufacturing Market


Smart manufacturing has found applications in almost all manufacturing industries. While some industries have been leading the adoption of advanced smart manufacturing, others have been relatively slower. Among these, the automotive and aerospace and defense segments are expected to be the largest contributors to industry growth. The automotive segment lead the market in 2019 and is further expected to grow phenomenally over the forecast period.

A peculiar trend in the industry is the proactive adoption of smart manufacturing at two different levels, connected products, and connected supply chains. Process manufacturers are observed capitalizing on the connected supply chain whereas discrete manufacturers have been increasingly investing in connected products. Automotive industry experts expect that around 25% of their plants will be transformed into smart factories over the forecast period. Moreover, auto manufacturers such as Tata Motors Ltd. and AB Volvo have begun to realize the outcomes of implementing manufacturing execution system solutions provided by General Electric.

Regional Insights: Smart Manufacturing Market

Though all the regions have started investing in smart manufacturing, they vary considerably in terms of market maturity. With numerous ongoing projects, developed countries such as U.S., Germany, and Japan are witnessing high penetration of smart manufacturing or Industrie 4.0, whereas emerging countries such as China are catching up with the technological advancements. For instance, in 2018, Siemens and Alibaba cloud forged a partnership to foster industrial IoT in China. The partnership will provide novel solutions for manufacturers in China to realize innovation and aide Industry 4.0 initiatives.

However, Asia Pacific region holds a dominant position in the market owing to the presence of a large number of smart manufacturing companies stimulated by the need to compete at international levels. An important distinction among regional markets is that the developing countries are investing in smart technologies to keep abreast with international manufacturing standards and trends. Whereas, developed economies are supporting digital transformation to bring back the offshore manufacturing to their own countries. Moreover, development of smart manufacturing is likely to boost trends such as onshoring and have impact on geopolitical and technological landscape during the forecast period.
Smart Manufacturing Market Share Insights

Key players operating in the industry include Siemens AG; General Electric; Rockwell Automation Inc.; Schneider Electric; Honeywell International Inc.; Emerson Electric Co.; and Fanuc Corporation. These vendors operate at different stages of the smart manufacturing value chain and cater to a host of industries and customers. Huge investments by these large vendors are driving the growth of smart manufacturing industry owing to growing need to take advantage of smart manufacturing technologies to address a dynamic and global market. Major strategies adopted by vendors include collaborations, new product developments, investments related to expanding capabilities, mergers and acquisitions, partnerships and agreements, and investments in research and development.

In October 2019, Siemens AG announced its plan to acquire Edge Technologies Inc. from the US establishment Pixeom, Inc. This acquisition will strengthen Siemens Industrial Edge portfolio by inclusion of software components for device management and for Edge runtime. Moreover, it will also help Siemens in expansion of its Digital Enterprise product portfolio. The acquisition highlights the overall industry trend focusing on the digital transformation of industry as well as the integration of cutting-edge technologies in smart manufacturing.

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Trusted Business Insights has segmented the global smart manufacturing market report based on components, technologies, end use, and region:

Component Outlook (Revenue, USD Billion, 2016 - 2027)

  
Hardware
  
Software
  
Services

Technology Outlook (Revenue, USD Billion, 2016 - 2027)

  
Machine Execution Systems
  
Programmable Logic Controller
  
Enterprise Resource Planning
  
SCADA
  
Discrete Control Systems
  
Human Machine Interface
  
Machine Vision
  
3D Printing
  
Product Lifecycle Management
  
Plant Asset Management

End-use Outlook (Revenue, USD Billion, 2016 - 2027)

  
Automotive
  
Aerospace & Defense
  
Chemicals & Materials
  
Healthcare
  
Industrial Equipment
  
Electronics

Food & Agriculture

Oil & Gas

  
Others