Smart Manufacturing Market Size, Share & Trends Analysis Report By Component, By Technology (Product Lifecycle Management, 3D Printing, Enterprise Resource Planning, Discrete Control Systems), By End Use, And Segment Forecasts, 2021 - 2028

Report Overview

The global smart manufacturing market size was valued at USD 236.12 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 12.4% from 2021 to 2028. The industry is focusing on integrating innovation and efficiency, as manufacturing processes are maturing at a rapid pace. The industry is set to adopt smart manufacturing practices across various domains. The need to increase productivity and enhance visualization of the entire system is the two major factors driving the market growth. Smart manufacturing has increased the adoption of digitization in various attributes of the entire supply chain of manufacturing companies. Major technological advancements have been witnessed in data analytics, predictive maintenance, and industrial networking. Numerous manufacturing units have adopted one or the other form of software systems. The systems are expected to be consolidated and streamlined over a single platform for providing real-time information and insights in the forthcoming years.

The proliferation of the Industrial Internet of Things (IIoT) is expected to create challenges in handling vast amounts of data and gaining actionable insights from the data. The stakeholders are likely to prefer self-learning systems and Artificial Intelligence (AI) technology to curb the challenges. However, with the growing dependency on data, the industry aims to secure connectivity and processes for preventing intentional and unintentional malfunctions. An important aspect of the industry is the need for convergence of different technologies such as artificial intelligence, smart sensors, the internet of things, robotics, and cloud computing. Digital manufacturing has created an opportunity to utilize integrated technologies for obtaining quantifiable results. The simulation, 3D printing, and networking technology advancements have made the market a promising investment center for technology builders and users.

While established vendors are aggressively pushing their technology into newer roles and use cases, barriers to entry and commercialization for new entrants are reducing at a rapid rate. These conditions have led to increased competition among the vendors, thus, leading to the introduction of innovative business models as the prime byproducts. The buyers are experiencing a paradigm shift and are focusing on manufacturing-for-order than manufacturing-for-stocking. All these scenarios are expected to result in a complete restructuring of the manufacturing business models.

The stringent lockdowns imposed by several countries worldwide to avoid the communal spread of the novel coronavirus are being relaxed with strong restrictions and precautionary measures. The prominent smart manufacturing companies are adopting approaches such as leveraging IoT, analytics, and AI-based digital platforms to minimize the need for human interaction. Furthermore, the reduced activities in production lines due to social distancing norms are also being stabilized with the help of automation solutions, thereby reducing the involvement of laborers in the manufacturing processes.

Component Insights

Based on component, the smart manufacturing market is segregated into hardware, software, and services. The software segment accounted for the largest share of almost 50.0% in 2020 and is expected to continue its dominance over the forecast period. The segment is matured as numerous solutions, including product lifecycle management, enterprise resource planning, and manufacturing execution systems, have already been in use for many years. Additionally, the advent of analytics and AI-driven systems is anticipated to be a crucial factor driving the segment growth.

The hardware segment is anticipated to register a CAGR of over 11.0% from 2021 to 2028. The hardware segment includes IIoT-enabling systems and devices, robots, 3D printers, and augmented and virtual reality devices. Various types of traditional and smart sensors are a crucial aspect of the hardware segment, which has been witnessing high growth and increased research and development activities in recent years. Growing technological advancements are enabling manufacturing facilities to deploy robots to carry out tasks such as material handling, processing operations, and assembly and inspection.

Technology Insights

The Distributed Control System (DCS) segment dominated the market in 2020 and accounted for over 16.0% of the revenue share. It is expected to retain its dominance over the forecast period. DCS has the advantage of being flexible and simple for processes such as controlling, monitoring, and reporting, which aids its increased prominence in the market. Additionally, DCS offers features such as controlling and redundancy, resulting in enhanced reliability and system availability. The leading market players are anticipated to introduce DCSs for numerous industry verticals, ultimately boosting the segment growth.

The 3D printing segment is expected to register the highest CAGR of over 15.0% from 2021 to 2028. The 3D printing technology assists in manufacturing complex components with controllable functional and physical properties at every point. Additionally, it offers strength, quality, and speed throughout the manufacturing process, catering to a wide range of industries and applications. One of the primary applications of 3D printing in manufacturing is the production of spare parts.

End-use Insights

The automotive industry accounted for the largest revenue share of around 23.0% in 2020 and is anticipated to register the highest CAGR from 2021 to 2028. The major factors contributing to the segment growth include benefits such as asset efficiency, cost savings, quality, and sustainability offered by the smart factory solutions. Furthermore, the adoption and investments in the smart factory are expected to offer automotive manufacturers with competitive advantages such as better profitability, increased speed to market, product quality, and a stable labor force. The automation of entire production plants, testing and simulation, and consumer connectivity are some of the major touchpoints for smart manufacturing solutions in the automotive industry.

The aerospace and defense industry segment is anticipated to register a considerable CAGR of more than 13.0% from 2021 to 2028. The sector is expected to invest heavily in smart manufacturing solutions, focusing on product prototyping and supply chain visibility and optimization. Additionally, the adoption of additive manufacturing for product prototyping, simulation & test environments, and advanced planning and scheduling is expected to be the prime focus of the industry participants in the aerospace and defense sector. The integration of data from various stakeholders in the supply chain is of paramount importance to the defense industry and heavy investments in the same are expected to drive the segment growth in the coming years.

Regional Insights

The Asia Pacific region accounted for the largest market share of almost 36.0% in 2020. The region is also expected to emerge as the fastest-growing region over the forecast period. Countries in the region are continuously focusing on automating in-house manufacturing facilities and reducing dependency on other countries, for instance, India’s “Make in India” program. Implementation of smart manufacturing solutions helps manufacturers focus on streamlining their supply chains to enhance competitiveness, improve safety in the workplace, and to reduce cost. Japan is also emerging as the manufacturing hub for the production of factory automation solutions and is supplying them to other countries within the region, making such solutions affordable for developing countries such as India.

The market for smart manufacturing in MEA is expected to register the highest CAGR of over 15.0% from 2021 to 2028. Saudi Arabia is anticipated to emerge as one of the leading countries owing to the increasing government initiatives in new technologies. Vendors in the region are heavily investing in smart manufacturing technologies. For instance, Ducab, a manufacturer of energy cables, deployed smart manufacturing to transform the supply chain completely. The company aimed to collect data from equipment and incorporate it with supplier data to streamline the process, track in-transit inventory, and improve logistics, and subsequently minimize the cost and save time.

Key Companies & Market Share Insights

The market is highly competitive and is characterized by the presence of a large number of players from North America and Europe. Industry players are expected to indulge in expansion initiatives to gain regional market share and penetrate developing industries. Brand identity and technical experience, in addition to previous use cases in the particular industry, are expected to be the major leveraging factors for competitive advantage over the forecast period. The competitive rivalry is high and is expected to increase further in the coming years owing to very high switching costs and an increased implementation time. Research and development and a shift to software solutions are expected to be the prime focus of the market participants to gain a competitive edge. Some of the prominent players operating in the global smart manufacturing market are:

• Siemens

• General Electric

• Rockwell Automation, Inc.

• Schneider Electric

• Honeywell International Inc.

• Emerson Electric

• Fanuc

Smart Manufacturing Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and analyzes the latest market trends in each of the sub-segments from 2016 to 2028. For this study, Grand View Research has segmented the global smart manufacturing market report based on component, technology, end use, and region:

• Component Outlook (Revenue, USD Billion, 2016 - 2028)

  • Hardware

  • Software

  • Services

• Technology Outlook (Revenue, USD Billion, 2016 - 2028)

  • 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 - 2028)

  • Automotive

  • Aerospace & Defense

  • Chemicals & Materials

  • Healthcare

  • Industrial Equipment

  • Electronics

  • Food & Agriculture

  • Oil & Gas

  • Others

• Regional Outlook (Revenue, USD Billion, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • MEA