SMART MANUFACTURING MARKET ANALYSIS

The global smart manufacturing market size was valued at USD 186.68 million in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 6.18% from 2023 to 2030.  Increasing investment by leading companies will contribute to the growth of the smart manufacturing market over the next several years. The rising need to reduce downtime and costs is expected to fuel the market.  Increased automation has been a major factor driving the market. This market is also expected to expand rapidly due to the demand for software solutions.

Global Smart Manufacturing Market: Regional Insights

The global smart manufacturing market is regionally divided into North America, Latin America, Europe, Asia Pacific, and Middle East and Africa.

Among regions, North America is expected to gain strong share in the global smart manufacturing market over the forecast period. This can be attributed to industrial revolution, in which data is used on a large scale for production, while the data is integrated with a variety of manufacturing systems in the supply chain in the U.S. Moreover, the growing automotive markets in the country, along with increasing economy of Canada with constant growth in past few years are also expected to drive growth of the market in the region.

Asia Pacific is also anticipated to witness strong growth in the global smart manufacturing market over the forecast period. This is due to rapid growth of manufacturing industry in countries such as China and India across the region. Manufacturing is one of the major features of China’s economy, which continues to grow. Furthermore, with increasing government initiatives, the manufacturing sector among these countries are witnessing strong growth. Thus, the region is expected to gain substantial growth in the global smart manufacturing market over the forecast period.

Figure 1: Global Smart Manufacturing Market Share (%), By Region, 2022

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Global Smart Manufacturing Market Drivers:

Rise in demand for automation to augment growth of the market

Automation has become highly accessible to manufacturers due to development of novel technologies, and this is changing the way of operations among several companies. The demand for automation is increasing all over the world in order to gain efficiency and quality. The adoption of automation has increased in manufacturing sector through smart technologies, as it helps achieve enhanced productivity with efficiency to operate in more protective and advanced environment. Thus, increasing demand for automation is expected to propel growth of the global smart manufacturing market over the forecast period.

Growing requirement for compliance and government support for digitization to boost the market pace

Due to digitization in industries, efficiency and optimum resource management has improved in recent years. Digitization of industrial sector is different in every industry depending on whether the focus is on automation or connected systems. Processing and Manufacturing industries are realizing the potential of using advanced technologies and deploying smart and connected systems, as it enables end-to-end visibility of industrial supply chain. Thus, need for digitization has increased in several sectors including manufacturing, and as a result, it is creating need for compliance and support from government. These factors are anticipated to fuel growth of the global smart manufacturing market over the forecast period.

Global Smart Manufacturing Market Opportunities:

Industrial revolution in manufacturing industries is expected to offer several growth opportunities in the global smart manufacturing market over the forecast period. Manufacturing industries around the world are undergoing a revolution, which is also being termed as Industry 4.0 or the fourth industrial revolution. This revolution is being driven by technologies such as IoT, Artificial Intelligence, Cognitive Technologies, Automation, and Machine Learning. Thus, smart factories have now adopted such technologies and have integrated them in their lines of production. These factors thus, are expected to offer multiple opportunities in the market.

Growing industrial automation to create lucrative environment for growth opportunities in the global smart manufacturing market over the forecast period. Along with increasing global inclination towards cost-effective and better quality control, automation of industrial processes is likely to grow significantly in the coming future. In this, machine learning is anticipated to pay a crucial role in the future in regards with automating complicated operations. Thus, the market will several business opportunities in the coming future.

Global Smart Manufacturing Market Trends:

Growing products demand is a recent trend in the market

Due to increased product demand, companies are boosting their production efficiency in order to cater the demand. For this, these companies are increasingly adopting smart manufacturing. Due to COVID-19 pandemic manufacturing industry was significantly disrupted. This has led to several manufacturers adopting smart manufacturing, wireless communication solutions in order to prepare for such future disruptive events. This trend is expected to continue in the global smart manufacturing market over the forecast period.

Increasing data monetization is a growing trend in the market

Data monetization is anticipated to play an important role in smart manufacturing in the future. There will be more customization in factories facilitated by demand identifying data, minimizing the downtime required for reset and retool. Along with this, augmented reality is also expected to be a significant feature in the smart manufacturing in the future, specifically in highly complex lines of assembly. Thus, the growing trend of data monetization is expected to propel growth of the market during the forecast period.

Global Smart Manufacturing Market Restraints:

Data security related concerns to hamper the market pace

The manufacturing firms around the globe are increasingly being exposed to cyberattacks, due to the dependence on process control and systems along with the convergence of IT and operating technologies systems. Control systems of manufacturers for a long were believed to be impenetrable due to their customized and proprietary networks. Now adoption of IoT has created a scope for theft of proprietary information. With increasing digitization and automation of these devices that are built without appropriate security measures, the concerns regarding security of data will increase. This in turn is expected to hamper growth of the global smart manufacturing market over the forecast period. However, the manufacturers of smart manufacturing solutions are developing products with strong security, which is likely to support the market growth.

High cost of installation to impede the market growth

The high costs of automated systems are concerned with efficient software and strong hardware. Automation tools need high capital investment for investing in smart manufacturing. They also required high maintenance compared to manually operated machine. The acquisition and installation cost of a control system for industrial automation is half of the overall cost during its lifetime. These factors in turn prevent enterprises from full-scale adoption of smart manufacturing. This is thus expected to restrain growth of the global smart manufacturing market over the forecast period.

Figure 2: Global Smart Manufacturing Market Share (%), By End-User Industries, 2022

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Global Smart Manufacturing Market Segmentation:

The global smart manufacturing market report is segmented into Technology, Components, and End-use Industry.

Based on Technology, the market is segmented into Programmable Logic Controller (PLC), Supervisory Controller and Data Acquisition (SCADA), Enterprise Resource and Planning (ERP), Distributed Control System (DCS), Human Machine Interface (HMI), Product Lifecycle Management (PLM), Manufacturing Execution System (MES), and Other Technologies. Out of which, Programmable Logic Controller (PLC) is expected to dominate the global market over the forecast period and this is attributed to the increasing launch of novel product with enhanced capabilities by PLC companies. For instance, in March 2018, Rockwell Automation announced the launch of novel PLC, specifically designed for optimizing the control architecture in large standalone machines or systems.

Supervisory Controller and Data Acquisition (SCADA) segment is also expected to witness significant growth in the near future and this is owing to the various benefits offered by SCADA leading to high demand. SCADA solutions can track multiple system parameters, and monitor a multitude of data sources, while also exchange data in real-life.

Based on Component, the market is segmented into Communication Segment, Control Device, Machine Vision Systems, Robotics, Sensor, and Other Components. Out of which, Machine Vision Systems is expected to dominate the global market over the forecast period and this is attributed to the increasing industrial automation and implementation of IoT. Moreover, increasing application of IoT in machine vision camera will provide real-time connectivity with the users, enhance flexibility, eliminate waste by optimization, and reduce the time to inventories and market. Thus, these factors are expected benefit the machine vision systems segment.

Control Device segment is also expected to witness significant growth in the near future and this is owing to the increasing initiatives taken by the electric motor manufacturers. For instance, in March 2020, Equipmake, an engineering company based in the U.K. announced the development of a power-dense permanent magnet electric motor.

Based on End-User Industries, the market is segmented into Automotive, Semiconductors, Mining, Oil & Gas, Chemicals & Petrochemicals, Pharmaceuticals, Aerospace & Defense, Food & Beverages, and Other End-user Industries. Out of which, Automotive is expected to dominate the global market over the forecast period and this is attributed to the growing adoption of Industry 4.0, smart technologies, and IoT among others in automotive manufacturing. For instance, discrete manufacturing is the production of distinct part, which can be counted and touched individually. Products such as automotive parts, cars among others are included in discrete manufacturing and these are increasing becoming connected. Thus, the segment is expected to show strong growth in the near future.

Semiconductors segment is also expected to witness significant growth in the near future and this is owing to the growing adoption of automation by replacement of manual transport with automated material handling systems, by semiconductor fabricators. This has created need for more sophisticated process integration. And this in turn is driving growth of the segment.

Global Smart Manufacturing Market: Key Developments

In October 2020, ABB completed acquisition of Codian Robotics B.V., a leading company providing delta robots, used primarily in high-precision pick and place applications. The product portfolio of Codian Robotics comprises a hygienic design line, which is ideal for hygine-sensitive industries.

In December 2020, Emerson Electric Company introduced its ASCO 141 Series Advanced Redundant Control System (ARCS) for providing a redundant solution for a variety of emergency shutdown valve applications, such as ones that are found in power, oil & gas, and chemical industries.

In September 2020, Fanuc Corp. made an addition of a third variation to its increasing SCARA robot line-up: the SR-12iA. This SCARA is capable of carrying payloads of up to 12kg, and features a wrist inertia of 0.30 kgm2 and a small footprint.

In June 2020, General Electric Co., launched its latest updates to its ADMS, which drives operations visibility, enhanced outage management, and power restoration automation.

Global Smart Manufacturing Market: Key Companies Insights

The global smart manufacturing market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global smart manufacturing market are Yokogawa Electric Corporation, ABB Ltd., Texas Instruments Incorporated, Emerson Electric Company, Siemens AG, Fanuc Corp., Schneider Electric SE, General Electric Co., Rockwell Automation Inc., Honeywell International Inc., Robert Bosch GmbH, and Mitsubishi Electric Corporation.

*Definition: Smart manufacturing is a technology-driven revolution in the manufacturing industry that uses connected robotics and artificial intelligence. It improves productivity and agility, reduces costs and complexity, and helps businesses prepare for unexpected events.