The Asia Pacific Smart Manufacturing Market is segmented By Enabling Technologies ( Industrial Control Systems, Industrial Robotics, Machine Vision Systems, Cloud, Analytics and Platforms, Cybersecurity, Sensors & Transmitters, Connectivity/Communication, and Other Field, Control and Safety Solutions), By End-user Industry (Automotive, Semiconductor, Oil and Gas, Chemical and Petrochemical, Pharmaceutical, Aerospace and Defense, Food and Beverages and Other End-user Industries) and By Country.
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Scope of the report
Key Market Trends
TABLE OF CONTENTS
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The Asia Pacific Smart Manufacturing Market is expected to register a CAGR of 11.2% over the forecast period from 2020 to 2025. Manufacturing is one of the most significant contributors to Asia-Pacific’s economy and is undergoing a rapid transformation. As the population ages, along with rising labor costs in Europe and North America, the legacy model based on inexpensive workers is no longer sustainable. Owing to such factors, low-end manufacturing firms are increasingly moving their operations to Southeast Asia to cut costs.
Industry 4.0 is the latest revolution in the manufacturing landscape where factories integrate production machines, wireless connectivity, and sensors and link them to a system platform ecosystem that oversees the whole production line process and executes decisions autonomously. With the help of smart manufacturing, manufacturers in the region can transform businesses and achieve significant value by leveraging the Industrial Internet of Things (IIoT), cloud, and analytics solutions.
Big data analytics can refine complicated processes and support new business models, like mass customization and product-as-a-service (which can be made possible by smart manufacturing) apart from the traditional operational models like “on-demand”; as big data analytics allows an enterprise to use smart manufacturing to shift from reactionary practices to predictive ones. The increase in the industrial 4.0 practices across various manufacturing industries, therefore, provides more scope for the acceptance of big data analytics in the region.
Manufacturing has emerged as one of the high-growth sectors in India. The ‘Make in India’ program places India on the world map as a manufacturing hub and provides global recognition to the Indian economy. Make in India to succeed, manufacturers in India need to manufacture more efficiently and deploy innovation to stay competitive. Smart manufacturing solutions can help to do that. Manufacturers can focus more on enhancing competitiveness by streamlining supply chains, reducing costs, and improving safety in the workplace. Simultaneously, solutions like robotics, analytics, and cybersecurity strengthen their ability to meet quality norms.
Further, the automated industrial economy has opened in Japan, and the development in Industrial version 4.0 is speeding up faster. Japan has emerged to become a manufacturing hub for factory automation products, supplying them to other regional markets in the Asia-Pacific region, making factory automation more affordable in the area. Products sourced from Japan are prone to lesser shipment costs and have better aftersales support networks in the region.
With the Made in China 2025 initiative allowing relocation manufacturing back to China, the Southeast Asian countries are under pressure to ascertain and minimize the risk of labor issues and Industry 4.0. This is currently impacting smart manufacturing development in the region. Moreover, the majority of the companies in the region are not familiar with the benefits of Industry 4.0 on productivity and growth. If adopted and implemented correctly, it has been estimated that Industry 4.0 has the potential to increase 30-40% of productivity.
Following the COVID-19 outbreak, supply chains in the Asia Pacific have experienced tremendous stress. Production and the distribution network have been frequently interrupted by factories in the region, closing on a considerable scale and transportation linkages being severed to contain the virus. With temporary production interruptions and longer lead times to receive essential raw materials and parts, manufacturing performance in the region over the outbreak period has taken a hit. With the COVID-19 impact, in the long-term future, it is expected that manufacturers operating in the region to adopt Industry 4.0 operating procedures to become more agile and mitigate production and distribution shortfalls should an event like this ever happen again.
Scope of the report
Smart manufacturing utilizes various solutions such as big data analytics, robotics, machine vision systems, sensors, and transmitters to refine complicated processes and manage supply chains. These solutions allow an enterprise to use smart manufacturing to shift from reactionary practices to predictive ones. This change targets improved efficiency of the process and performance of the product. Smart manufacturing is implemented across various end-user industries, including automotive, oil and gas, semiconductors, aerospace, food, and beverages.
Industrial Control Systems
Programmable Logic Controller (PLC)
Supervisory Controller and Data Acquisition (SCADA)
Distributed Control System (DCS)
Human Machine Interface (HMI)
Product Lifecycle Management (PLM)
Manufacturing Execution System (MES)
Machine Vision Systems
Cloud, Analytics and Platforms
Sensors & Transmitters
Other Field, Control and Safety Solutions
Oil and Gas
Chemical and Petrochemical
Aerospace and Defense
Food and Beverages
Other End-user Industries
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Key Market Trends
Oil and Gas is Expected to Hold Significant Share
The oil and gas end-user industry is one of the earliest pioneers of predictive maintenance due to the need for lowering the cost of maintenance while mitigating risks of environmental disasters. This is due to sensors that can now be easily installed into and onto machinery. These sensors can easily feed the data into specially developed predictive algorithms that can warn them about potential failures. Due to the increasing demand for energy in the long term, the oil and gas industry faces many challenges in its complete value chain, and there is a need for significant technology.
A lot of data is being generated in the oil and gas sector. A large part of this data consists of exploration, production, and reservoir data logs, such as well logs, seismic surveys, conventional and special core analyses, static and flowing pressure measurements, fluid analyses, pressure-transient tests, and periodic functional production tests, among others. Owing to such factors, there has been an enormous opportunity created for the vendors to offer a solution for data management and advanced analytical tools.
Vendors in the region have been offering solutions that allow the companies to use AI technologies, such as natural language processing and computer vision, to extract data from these documents automatically. Such demands of real-time analysis and visualization of data have driven for formulating partnerships with analytics solution providers. The ongoing shift to becoming smart is expected to present even more significant potential, given the strategic push by many companies to expand their downstream operations of the oil and gas value chain, especially petrochemicals.
In 2019, China produced around 191 million tons of oil and approximately 173 billion cubic meters of natural gas. Annual investment in upstream exploration and production was CNY 332 billion. Chinese authorities have called for efforts to expand crude oil and gas output to bolster the country’s energy security and support a national campaign to shift away from coal. China relies on imports for nearly 70% of crude oil and half its natural gas consumption, which is expected to boost the implementation of smart manufacturing in this sector.
In June 2019, Oil India decided to deploy AI solutions to fight against oil pilferage in some parts of the country where there has been a rising incidence of rampant oil thefts from the pipelines. Following this, Oil India is planning to transmit real-time data to oil and gas collecting stations for detailed analysis, thereby spotting any disruption immediately. Countries like China, India, Japan, and South Korea have one of the most active oil and downstream gas sector in the region, which together is responsible for over 78% of the oil refining capacity, with significant refineries deeply integrated with petrochemical production units, in the Asia Pacific region.
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China is Expected to Hold Major Share
China is an integral part of Asia's growing shift to intelligent applications. The Chinese Government has strengthened the design of smart manufacturing by implementing various schemes and demonstrations in developing standard systems. China aims to create 15 manufacturing innovation centers by 2020 and 40 by 2025. The areas of focus include automated machine tools & robotics, new advanced information technology, aerospace, and aeronautical equipment, maritime equipment and high-tech shipping, modern rail transport equipment, new-energy vehicles and equipment, power equipment, agricultural equipment, new materials, and biopharma and advanced medical products.
The Chinese Government has created a roadmap to become the leading AI superpower by 2030. Considering AI development and proliferation, the Government focuses on integrating AI technology in China's factories to harness and adopt the practices of Integrated intelligent systems, which includes networked vehicles, service robots, drones, video image identification systems, voice interaction system, smart sensors, neural network, and chips.
Many medium and large manufacturers in China are starting to equip data analytics to optimize factory operations, boost equipment utilization, product quality, and, at the same time, reduce energy consumption and production cost. With the latest supply-network management tools, factory operational managers have a more unobstructed view of raw materials and manufactured parts flowing through a manufacturing network. This can help them schedule manufacturing operations and product deliveries to reduce costs and improve efficiency. With the active use of data mining technology, engineers and technicians are gaining new insight into a machine failure to enhance reliability.
In October 2019, Honeywell launched its Smart Manufacturing Research Center in Shanghai, in a bid to further tap into the Chinese market by diversifying its investment and development in the country. The Smart Manufacturing Research Center will also serve in an advisory role for Chinese businesses and the Chinese Government, and facilitate collaborations with universities, research institutes, and nonprofit organizations to promote the country's high-quality development.
In September 2019, Ericsson implemented smart manufacturing capabilities as a SEK 500 million transformation of the company's existing factory in Nanjing, China, reached its conclusion. The automated factory stands among one of the most advanced manufacturing facilities in the industry. The expertise of ways of working with analytics, artificial intelligence, and machine learning tools have benefited from the investment by the company. Artificial Intelligence is now used to recognize components in the production line, increasing efficiency, accuracy, and quality.
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The Asia Pacific Smart Manufacturing Market is quite fragmented as there are numerous international companies such as ABB Ltd, Honeywell International Inc., Siemens AG, Schneider Electric and Rober Bosch offering various number solutions related to control systems, robotics, machine vision systems, and analytics to enhance the productivity of the manufacturing processes across the end-user verticals. The companies in the market are undergoing various partnerships and product innovations to increase their market share.
February 2020 - Honeywell and Tech Mahindra teamed up to build ‘Factories of the Future,’ leveraging industry-leading digital technologies. The two companies plan to capitalize on digital transformation, 5G, Industry 4.0, software capabilities, and engineering expertise to enable customers in the manufacturing industry to scale-up even faster. Both companies will aim to deliver world-class operations and performance management to facilitate manufacturing customers to expedite their growth and realize the value of Industry 4.0 technologies and solutions.
September 2019 - Siemens will build its most advanced factory for the production of distribution transformers in Guangzhou, China. The factory is expected to put into operation in 2021, will apply Industry 4.0 standard, and become a Siemens model factory in the global industry. The company even formed an open innovation ecosystem where governments, businesses, and academia work together to massively apply digital technologies such as digital power plant, industrial IoT, smart campus, and connected mobility.